“If the government would just step out of the way and unleash the power of the competitive market, we would have a much better economy.” That’s good political rhetoric. The current Republican administration and its cronies in the Republican Legislature keep repeating it as part of Governor Gianforte’s “Red Tape Reduction Initiative.” The trouble is, what Republicans get when they push to scrap regulations is often not what anyone wants.
The last time we heard that kind of rhetoric was during the 1997 legislature and the passage of the bill that deregulated the Montana Power Company. The result was the bankruptcy of the state’s largest electric utility and years of chaos and ever-rising electricity rates in Montana. The dams on Montana’s rivers were sold, the natural gas reserves dedicated to Montana’s citizens were sold, and businesses were closed across the state. Our electricity rates have increased from some of the lowest in the country to the highest in the Pacific Northwest. It was the largest economic disaster in Montana’s history.
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Efforts to deregulate were fueled by the greed of the Montana Power Company combined with ideological blinders carried by the Racicot administration and the Republican legislature. No one in the Capitol rooms had any idea what the Montana Power deregulation bill would do. They voted in favor because it was presented as pro-competitive and would therefore lead to lower prices. It was so easy for the politicians involved, free markets are good and regulation is bad. We’re still paying for their simplistic view of how the world (and the economy) works.
So here we are, nearly 30 years later, with a conservative Republican in the governor’s office and a legislature made up of some of the most far-right congressmen we’ve seen in decades. Once again we are faced with much rhetoric about the power of the free market being hampered by regulation.
But the irony of all this is that a “free market” cannot function without government regulation. Private companies need a level playing field for competition to take place. Bad actors need to be monitored (yes folks, there are greedy people out there willing to cheat to get ahead). When you go to an architect or accountant, you want to be sure that that person has the qualifications to do what they promise.
Someone has to be sure companies follow the rules, or bad actors have a huge advantage in the market.
Republicans seem to think corporations should be free to pursue their own interests without regard to the public. They forget that large corporations, left to their own devices, have a long history of betraying public trust and the community in general. From the Copper Kings to Enron and Martha Stewart’s insider trading to the subprime mortgage collapse, the examples of greed over ethics in the private business world are numerous and enduring.
Most of us recognize that our economy is far more complex than simple free-market capitalism. It is puzzling that large corporations are now seen as more virtuous than our public institutions. The economist John Maynard Keynes put it best: “Capitalism is the extraordinary belief that the meanest of men, from the meanest of motives, will somehow work for the good of all.” Helene Republicans would do well to heed those words before they set about dismantling regulations to protect the population.
Ken Toole is a board member of Big Sky 55+, a nonprofit group that organizes seniors in Montana. He is the former vice chairman of the Public Service Commission and past chairman of the Montana Senate Committee on Energy and Telecommunications.