Reply To: On the size of firms due to State activity


If your friend is saying that the overall extent of bigness of business in society is insensitive to government intervention because it merely shifts entrepreneurs from attending to their enterprises, in which case they would be bigger, to lobbying for intervention, in which case they would also be bigger, then I’d say he’s mistaken. The number of entrepreneurs in society is not fixed or even a fixed portion of the population, but responds to the configuration of people’s preferences and the objective features of the chosen techniques of production and management. Moreover, the self-selection process of the market means that the characteristics that make for superior entrepreneurs (anticipating consumer demands, etc.) and not the same as those that make for superior lobbyists (bribing, etc.).