Microsoft has apparently shut down the blog of a Chinese journalist named Zhao Jing (aka Michael Anti) that was hosted on its MSN Spaces blog service because of subject matter critical of the authoritarian Chinese government. Former TV reporter Rebecca MacKinnon has posted the details on her blog. Included with her analysis is this fascinating insight:

Can we say, snakepit? It’s actually not uncommon in China for people in one company to actively “tattle” on their rivals and get them into political trouble in order to gain a competitive business advantage. I saw it happen several times in the media and entertainment worlds when I was living and working in Beijing. This is one reason the communist party will stick around longer than many outsiders think. Businesses get greedy and try to manipulate the authoritarian system to their advantage, rather than working together to make the whole thing more fair, accountable, and transparent. Microsoft clearly isn’t taking the high road either.

Liberals are correct when they attack big business and corporations for their corruption. Businesses that will do anything they think they can get away with to win are often the rule rather than the exception.

As a solution, liberals often work to establish more government regulation of business. However, they often don’t take into account the dynamic demonstrated by Ms. MacKinnon’s observations of business in authoritarian China: When you give the government far-reaching power to control business, the corrupt corporations will soon turn their efforts toward manipulating those in government to create laws that can be manipulated to the benefit of their company. In other words, they use the government as a club with which to bludgeon their competition.

So in an effort to curb corporate corruption through government regulation we often move the corporate battlefield into government; We may change the dynamics of how corrupt businesses compete, but we do not remove the corruption, we just change how they operate and the arena in which they battle.

I believe that this dynamic was also operational in the breaking Jack Abramoff scandal. Glenn Reynolds of instapundit provides this insightful thought :

The real source of corruption is government power. When the government can make or break businesses, businesses will try to influence it. If you want cleaner government, you need to limit what, and how, government affects people’s lives.

Though I don’t have any specific examples, I am aware of rumors of companies basically writing bills to be presented in congress to their own specifications and then having them submitted by corrupt politicians, verbatim.

I am also aware of stories of large corporations who have lobbied to have their own products made illegal because their patents are about to expire and they don’t want any competition once the product is no longer under patent. They spend the period during which the patent is active developing an alternative, then they patent the new alternative so that no one else can produce it. Then they work to make their former product illegal.

These are just stories, but they seem plausible to me.

This is one of the reasons why I tend to oppose treaties like the Kyoto Protocol . While I am in favor of protecting the environment, I worry that the regulations only provide another tool with which big businesses can attack each other and invite people like Jack Abramoff to focus their considerable talents toward manipulating and corrupting the system to their own benefit. For all I know the Kyoto Protocol is just another manipulation by some big corporations to keep their competition down.

At the same time, I oppose the kind of libertarianism that would remove all government power to regulate. The same corporations who will twist government regulation to their own use, would wreak equal havoc if left completely unregulated.

It is a difficult problem for which I don’t have a good solution.