James writes that “(2) being in favor of markets does not mean that one favors everything that businesses engage in to enhance their profitability.” This is clearly right. Adam Smith, famously, argued against mercantilist policies that enhanced profits for (some) businesses. Today, of course, we talk a lot about protectionist policies that do the same. There are, in fact, a variety of regulatory policies that do this. Current states engage in what we can call promotionist acts—acts meant to promote the interests of some subset of those within the system (usually business interests). So, here is a list of types of promotionist policies. What do people think of the list? In particular, do I leave anything out that I shouldn’t?
- protectionism: domestically promoting domestic interests against foreign competitors (e.g., import tariffs)
- internal promotionism: domestically promoting the interests of particular domestic business interests against others (e.g., municipal support for sports teams and monopoly grants to cable companies)
- mercantalism: promoting the interests of domestic business interests non-domestically (e.g., agricultural subsidies for exports)
- reverse mercantalism: domestically promoting the interests of foreign business interests (e.g., grants to foreign companies to open factories locally; think of municipalities helping foreign companies to open factories and hire local workers)
- internationalism: using international governance structures (like the IMF and WTO) to promote the interests of international business interests (no current example available, but during the 2002-2003 steel tariff debacle, the idea was floated to have the WTO collect revenues on U.S. tariffs on European steel as well as on the retaliatory European tariffs on American goods that would have resulted and then to use those proceeds to help rebuild the international steel industry).