Senate Minority Leader Mitch McConnell softened his tone on comments he made earlier this week regarding corporate America jumping feet first into politics. After issuing a warning based on the recent actions of Coca-Cola, Delta Airlines, and Major League Baseball, McConnell backtracked:
Senate Minority Leader Mitch McConnell (R-Ky.) on Wednesday backed off his stern warning that companies such as Major League Baseball, Delta and Coca-Cola should stay out of high-profile political fights after they criticized Georgia’s new election law.
“I didn’t say that very artfully yesterday. They’re certainly entitled to be involved in politics. They are. My principal complaint is they didn’t read the darn bill,” McConnell said Wednesday at a press conference in Paducah, Kentucky.
Backpedaling is a mistake. Large American corporations are rent-seeking at this point, looking to be left alone by the government. They do not care if taxes are raised on them or about a minimum wage hike. They can absorb both, and it will be unmanageable for small to medium-sized competitors. Recent events are not about large corporations paying for lobbyists or making political donations. It is about them taking sides and punishing a state identified with one political party, the one to which McConnell belongs.
As long as the Elizabeth Warren wing doesn’t wing out as far as breaking up the large corporations, corporate America will continue to side with Democrats who believe in more regulation and more government oversight. They can afford the compliance staff and will pass on any significant price increases to their customers. When the Biden administration threatens to increase corporate taxes, this hurts any emerging competitors more than it hurts Starbucks, Amazon, or Simon & Schuster. McConnell knows this.
Many on the Right are talking about the emergence of a parallel market for goods and services. Examples would include Black Rifle Coffee or Patriot Mobile, which often advertise on conservative podcasts. These emerging competitors that appeal to people on the right can be quickly squashed by increased taxes, more regulation, and the coming Environmental, Government, and Social (ESG) scores. Not to mention the fact that Big Tech companies can drown out their messages in the current digital environment, where platform providers can cut off the shows they advertise on a whim.
The most shocking recent example of this was what happened to the social media platform Parler. Not only was it booted from the app stores, but numerous other services also cut the company off, including its server hosts, e-mail services, and even attorneys. Supposedly this happened because the January 6, 2021, riot at the U.S. Capitol was organized on the platform, and this violated the Terms of Service (TOS) for various vendors. Later analyses showed more Capitol riot organization happened on other, larger platforms. If Apple, Google, and Amazon Web Services applied their TOS evenhandedly, other apps would have been dropped from the app stores and web services. They were not, and Parler has not returned despite assertions, it contacted the FBI about some of the content on the platform ahead of the riot.
The acceleration of digital censorship, threats of private industry requiring vaccine passports, and the ridiculous, uninformed reactions of corporations to election integrity laws seem to be causing cracks in the free-market religion on the Right. The mantra “A private company can do whatever it wants” seems to be fading, primarily because none of these oligopolies function in a free market, and we have seen them take obvious, concerted action. It will fade faster as individuals understand the reality of financial institutions using ESG scores to deny or modify investments, purchases, and the availability of financing.
This shift explains at least part of the national conservative commentariat’s support for Florida Governor Ron DeSantis. Something about the way large corporations are behaving is rubbing him the wrong way. DeSantis has been a national leader in addressing COVID-19 while maintaining individual freedom. On some level, he also realizes that large corporations are infringing on the free speech and free association rights the Constitution guarantees for average Americans. He has vowed to take on the tech companies in suppressing speech and more recently, he drew a line in the sand regarding vaccine passports in Florida.
Justice Clarence Thomas is also shifting. In a recent concurrence declaring a case about former President Donald Trump blocking people on Twitter moot, he argued that the contention that Trump’s Twitter account was a public forum was overshadowed by those who had control over that account:
Any control Mr. Trump exercised over the account greatly paled in comparison to Twitter’s authority, dictated in its terms of service, to remove the account “at any time for any or no reason.” Twitter exercised its authority to do exactly that. Because unbridled control of the account resided in the hands of a private party, First Amendment doctrine may not have applied to respondents’ complaint of stifled speech.
Thomas went further to observe that legislatures will eventually need to wrestle with the question of where these companies fit under the description of a common carrier or public accommodation. Conservatives need to think about these questions, too. Internet Service Providers (ISPs) lay fiber to carry information, which seems like a valid comparison to Ma Bell. Server farms have hardware and send code to carry information all over the world. Does the mechanism of information transfer matter? Cell phones are common carriers even though they use cell towers rather than traditional phone lines. Why are only voice and text covered, not e-mail, social media, and digital communications more generally?
Does the technology used to share information matter as much as the underlying purpose of the service? What will the free-market religion adherents say when their consumer choices or investment patterns limit their access to financing or insurance? Instead of “Build your own Twitter,” will they say, “Build your own fiber network”? How about “Build your own Goldman Sachs” or “Build your own commercial insurance provider” when our country’s largest financial institutions cut off these services for individuals and legal businesses that don’t or can’t conform to the subjective ESG standards they set.
President Trump finalized a rule in the Office of the Comptroller of Currency on his way out the door requiring quantitative metrics proving the risks that lead them to deny services to potential clients. As Reason notes:
This regulation was meant to shield politically unpopular but otherwise legal companies from banking discrimination, following Operation Chokepoint, a program initiated by President Barack Obama’s Justice Department. While ostensibly designed to combat fraud, in practice, Reason writers have observed, it empowered the government to target unfavorable industries, such as payday lending and pornography, by “coercing private businesses in an attempt to centrally engineer the American marketplace based on its own politically biased moral judgments.”
President Biden suspended the rule allowing banks to discriminate on the same politically biased moral judgments. Not only may they discriminate against the oil and gas industry, gun and ammunition manufacturers, and other businesses, but this expansion will eventually apply to individuals.
Ultimately, conservatives will have to decide if we can build a parallel civilization in short order. If not, free-market absolutism is about to collide with a market increasingly governed by the radical Left’s political morals. DeSantis and Thomas can see the beginning of the limits this will place on individual liberty. Conservative Inc., including McConnell, needs to figure out that the government must protect our God-given rights in the same way they have a duty not to infringe upon them.