Carrier, The Art of the Deal and the Real Meaning of Capitalism

Carrier, the heating and air-conditioner company that announced Tuesday it had agreed to keep 1,000 jobs in the United States after talks with President-elect Donald Trump, elaborated Wednesday, saying it had been offered state “incentives” to stay.

The company did not specify on what the incentives were, but such deals with state and local governments typically include tax breaks the governments believe will be offset by the additions to the workforce brought by the company.

Late Wednesday, a former Indiana official told Politico that the deal was about lucrative federal contracts.

The agreement includes $700,000 in state tax breaks offered by the Indiana Economic Development Corporation, a quasi-public entity that doesn’t require legislative approval for its deals.

Free markets are the answer. Free markets are economically viable because they leave companies and customers alone to determine what best suits their needs. Free markets are morally superior because companies take the hits for their mistakes, when not pleasing customers, and companies reap the profits, even billions, for their success and achievement. Economic freedom also respects the rights of consumers to determine and trade for their needs without economic interference from the government. Capitalism includes deals and agreements, and so much more. At the root, it means freedom in one of everyday life’s most important areas, the economic arena.

Anything government does to interfere in the economy thwarts the rights and judgments of both business owners and customers. If people would not make certain decisions without government regulation, taxation and pull, then what business do politicians have forcing them? And if people would make these decisions anyway, then why do we need the government to interfere at all?

The United States has a market, but it’s not a free market, especially in big business. America has profit-making companies and largely willing customers who trade with or purchase from those companies. But America does not, by and large, have a free market any longer. There are too many taxes, too many regulations and too many government contracts, subsidies and favors to describe our economy as a free market. The problem existed well before Obama and Obama’s two terms made it all much worse.

Throughout his campaign, Donald Trump decried the loss of jobs in America to other countries. But it’s not the location of companies and jobs that matters the most; it’s the ability of the companies to make the decisions most likely to reap them a profit. Profits happen when businesses do good work and are pleasing customers. Government only has a role in cases of fraud, theft or the violation of contracts.

If a company believes it can best serve the interests of its profit and customers by moving locations outside of the country, then this is a company’s right. It doesn’t necessarily hurt America, because Carrier and these other companies are still American companies. Their ability to make a greater profit keeps more money in the American economy than otherwise would be there. Other businesses with whom Carrier does business would suffer if Carrier became less profitable and went out of business, something moving jobs to a cheaper location is intended to help.

The main reason companies like Carrier move facilities out of the country is because labor is cheaper, and taxes and regulation are less burdensome. The answer is not Donald Trump any more than Obama’s socialism or economic fascism, whereby government rules decisions that should have been left to the market. The answer is simply a free market. Anything Donald Trump and Congress can do in the next 2-4 years to make the market more free, less taxed and less regulated than it used to be will be a good thing. This, and this alone, will grow the economy.

The art of the deal? It depends on what you mean by a deal. If a deal means greater economic freedom, including less taxation and regulation, then we’re moving in the right direction. The more government gets the hell out of the way, including reductions in taxes and regulations and doing away with corporate favors and subsidies, the better off America will be.