Commentary

Should Populists Praise Big Companies?

By Edward L. Hudgins
April 21, 2000
It should be enough to say that since Microsoft is the property of Bill Gates and its other owners, they may do with the company as they please, including setting terms for the use and sale of its products. Yet critics maintain that such a large company is a threat to smaller competitors and therefore the government ought to restrict or even break up the company. But the size of Microsoft, which started with a handful of workers and now employs 30,000, is in fact crucial to why it deserves the support of all individuals who call themselves populists.

Edmund Burke’s defense of large property holdings is most appropriate to this case. In 1790 the great British political thinker was referring to property in the form of huge, inherited estates when he said, “it never can be safe … unless it be, out of all proportion, predominant in the representation.” Otherwise, “it is not rightly protected.” Of course, during the century prior to Burke’s words a rising commercial class had been limiting the powers of kings by means of political and constitutional safeguards. Soon that class, with its newly won freedom, would initiate the industrial revolution, creating wealth that dwarfed that of old aristocrats.

Burke justified massive holdings on the grounds that “the characteristic essence of property … is to be unequal. The great masses therefore which excite envy, and tempt rapacity, must be put out of the possibility of danger. Then they form a natural rampart about the lesser properties in all their gradations.”

Burke understood three important truths about property. First, property rights are important not only for the rich but also for those who hold small property and for innovators on the road to wealth. Second, property provokes jealousy, from both covetous mobs and political elites who see their power challenged. And third, holders of large property are best able to protect general property rights, which in turn protects small holders and those in the process of making new fortunes.

The lesson of Burke’s principles in today’s world is clear: If the federal government can crush Bill Gates, it can crush any of us, making none of us safe. The checks on political power established in Burke’s time are being eroded in our own. The U.S. Constitution requires that federal laws be passed by Congress. Yet in past decades Congress has delegated broad, open-ended powers to unelected bureaucrats in federal agencies who burden people with regulations but who are not accountable to the people.

Today political elites can use government power to crush any interests or enterprises not to their liking, in spite of any law that might protect them. The tobacco industry in all likelihood could have prevailed in court against the government, but it might have gone bankrupt in the process and thus was forced to give in. Gun manufacturers now face a similar assault.

Why should average citizens care about the fates of huge, unpopular industries? Because thousands of citizens on a daily basis face similar abuses from federal bureaucrats who, for example, bar citizens from building or farming on their own property because, dry though it is, it is technically a “wetland,” or who force struggling entrepreneurs to offer employee benefits that they cannot afford, driving those entrepreneurs out of business. Small-scale entrepreneurs and property holders are frequently unable to defend themselves against governments with unlimited resources, which are extracted from us through taxes. As Burke observed, property’s “defensive power is weakened as it is diffused.”

That is why the rich can do us all a true service by defending their rights, because they are ours rights as well. Unfortunately, as Paul Weaver documents in The Suicidal Corporation, many businessmen are too willing to compromise with government, sometimes out of short-term expediency, other times to secure government favors. It is interesting that 10 years ago Microsoft had no Washington office, while today it spends $4.7 million annually on lobbying to fight for its survival. It is not the size of corporate bank accounts but rather political power that corrupts civil society.

Bill Gates’ business is a blessing to Americans. The incredible wealth created by him and his colleagues includes the half-a-trillion-dollar value of Microsoft, the value of all the software it has ever sold, and the benefits in time and money saved from the billions of uses of that software. If Gates wishes to make one more gift to the American people, he can fight vigorously against his government persecutors. When he fights for his freedom, he is fighting for our freedom as well.

Edward L. Hudgins is the director of regulatory studies at the Cato Institute.