Business Mini-Malpractices


You probably know this'when you champion the free market, your critics often unleash ad hominems like, 'Hey you are just an apologist for big, greedy business, so shut up.' As if this amounted any kind of argument. (I suspect such retorts are meant to make one feel bad, that's all'a kind of punishment for disagreement!)

I need, however, to assure these critics now and then that I have absolutely no loyalty to any particular big business. Indeed, I have pointed out over my entire career how the welfare state is far more guilty of handing out subsidies and other favors to big business than to unwed mothers or the unemployed. I am quite in agreement with Adam Smith on this'people in business, no less so than those in other lines of work, often collude to plead for special favors from government.

Actually, that's a bit gratifying because it shows that Marx and his pals were rather na've to think that the bourgeoisie is aware of its rational self-interest and tries diligently to secure it by supporting the free market system. No, they aren't and they don't and there is abundant evidence of this throughout history and in our own time. I am willing to bet that the percentage of anti-free market thinking is nearly as great among people in business as it is among those in other lines of work, including education, art, science, farming or whatever. We just don't hear about it from people in business so much.

Just to show that I have zero favoritism toward business, let me recount a few observations about what for me are pretty good examples of at least minor business malpractices. Take my recently purchased nifty Hewlett Packard officejet printer/copier/fax machine. It works like a charm. Except for one interesting glitch. It gives notice of the need for new cartridges way before they are really needed. Just about three weeks ago this machine started to indicate such a need, only I decided to cancel the message and it has printed fine ever since, with no sign that it's running out of ink. So, what's up?

Of course, I do not know but I do suspect that there is something of a scam afoot here. Let's get all these hp printer users to shell out big bucks for cartridges'and they do cost an arm and a leg'even when they do not need them.

Nor is it only HP that perpetrates what seems to me very likely a scam. My previous Brother machine did the same thing. I was, thus, ready for the HP!

Now this is no big deal but when a gadget gets around the world in the numbers these machines do, the money collected under the false pretense that the ink is running out can amount to a hefty sum. So, sure, it is no big deal'there is other stuff like this going on, what with all those cereal and other boxes that look like they contain a huge amount of stuff, only it turns out they do not, being filled only to about 60% as you notice once you have opened them.

And there is, of course, a lot more. Whenever you call an airline and want a new reservation, most often you reach someone very friendly immediately. But if you push the number on your phone that should get you to someone to reconfirm or do some other business'in short, the company has nailed down your patronage already, so now it is quite costly to bolt and go elsewhere for the flight'you are likely to be on hold forever. Or at the airport'notice how those at the counter never look up to catch anyone's eye who may wish to ask a question or conduct some other business. And this is so not just with airlines: new business is first business, old business is business in the bag, so why extend the effort to be prompt, even courteous?

No, not everyone in the business world acts like this and there are, as I noted already, plenty of malpractices committed by members of other professions'as when your eye doctor refuses to answer any of your questions about an operation other than with condescending looks and dismissals, or your auto mechanic will not explain what's really wrong but insists you simply trust him. You know the bit.

So many people fret about Enron executives but I fret about this kind of stuff a lot more because it happens daily, everywhere. So, why then am I such an opponent of government regulation of business when I see all this malfeasance? Well, because (a) the government's regulations largely do not remedy much, only enable bureaucrats now to become the major and far more damaging perpetrators of malpractice; (b) people who come to expect the government to solve these problems in the market place will not get satisfaction but will still fail to prepare to cope, and (c) the institution of government regulation is, of course, rank prior restraint.

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Tibor R. Machan's picture
Columns on STR: 70

Tibor Machan is a professor of business ethics and Western Civilization at Chapman University in Orange, Calif., and recent author of Neither Left Nor Right: Selected Columns (Hoover Institution Press, 2004).  He is a research fellow at the Hoover Institution, Stanford University.