Editor Note: Three years ago, Randall Holcombe, the DeVoe Moore Professor of Economics at Florida State University, published an important essay in the Cato Journal, “Political Capitalism.” MasterResource is pleased to republish his summary as Part I of our four-part series. The lineup is political capitalism (today), contra-capitalism (tomorrow), and business-history scholarship (Wednesday and Thursday). Professor Holcombe’s contribution is also timely given the recent rent-seeking-friendly $1.3 billion, Republican/Democrat, 2,322-page Consolidated Appropriations Act of 2018.

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“While political capitalism as an economic system has barely been recognized, the building blocks that form a theoretical foundation for political capitalism are firmly in place and well-accepted. In political science and sociology, the ideas of elite domination and biased pluralism are mainstream concepts that are a fundamental part of political capitalism.”

“R Street continues to live the lie of ‘engag[ing] in policy research and outreach to promote free markets and limited, effective government.’ Pricing carbon dioxide, replete with global tariffs (‘border adjustments’) and tax differentials (‘equity adjustments’), coupled with a government-forced transformation to (not so) ‘clean’ political energies, has nothing to do with classical liberalism, energy freedom, free markets, or limited-and-effective government.”

It had to happen.

With its Left Progressive donors, R Street Institute was going to march down the statist road as one initiative got replaced with another.

Founded in 2012 with climate-alarmist/Left money, R Street tried to shed into new free-market skin by pitching a seemingly soft proposal to substitute new/better government intervention for worse/existing intervention. Specifically, replace existing climate regulation with carbon-dioxide (CO2) tax-and-dividend. That was during the Obama era, assumed to turn into the Hillary era.…

“The two greatest enemies of free enterprise in the United States … have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.”

– Milton Friedman. “Which Way for Capitalism?” Reason, May 1977, p. 21.

“To put it plainly, T. Boone Pickens is out to save America.”

– Carl Pope (Sierra Club). Quoted in Dean Calbreath, “Pickens Pitches Plans to Shift U.S. Away From Oil,” San Diego Union Tribune, June 25, 2008.

They are not against capitalism. They can be very charismatic, in the know, and mainstream. They may be industry leaders. They are always politically correct and receive good press. And they can, often do, pledge allegiance in the abstract to the American way of free enterprise.…

“If I wanted to kill [tax subsidies], the thing to do is for Exxon Mobil to go and invest heavily in [wind and solar] and then Congress would immediately cancel the tax subsidy. Actually what they would do is they would just cancel it for us…. So we are not going to go into investments that are dependent on a government providing a tax system to make them viable.”

– Rex Tillerson, Quoted in Russell Gold, “Exxon Mobil: We Like Renewable Energy Subsidies. Wink, Wink.” Wall Street Journal (March 6, 2009).

Last week at MasterResource, I posted on current US Secretary of State Rex Tillerson’s 2013 views on climate science in light of consumer energy needs. He referenced the pause in increasing global temperatures in light of rising concentrations of greenhouse gas concentrations.…