I have never been a Richard Branson groupie, but I must say for once I am appreciative of his efforts. Branson has helped to make crystal clear the process by which governments take control of the economy. The story comes to us via the Mises Economics blog, and starts this way: According to Branson:
"The big oil companies are making extortionate profits out of the current oil
price," he announced, in his most calculating, populist style.
How anyone who runs the Virgin Megastores can complain about someone else's high pricing is beyond me, but lets let him run a little further:
"The biggest problem with the oil price is the lack of refinery capacity. There
is enough oil for everyone in the world, but the refineries are just not there."
And they are not there because...governments do not allow oil companies to build new refineries. The government having created the problem, the solution would seem to be for the government to repeal the offending restrictions that caused the problem. But here is where we get to the great tool of statism: The problem created by the government is blamed on private enterprise and "market failure" and portrayed as necessitating... more government intervention:
"There has been talk of a windfall tax on big oil companies. Perhaps the
Government should use that money to invest in refinery infrastructure."
Of course, the big oil companies would invest those windfall profits in refining capacity on their own had they been allowed by government, but lets ignore that messy detail. Ahh, but here is the best part. Not only does the government now get to invest in refineries, but it gets to do it by channeling the money to the political supporters (i.e. Branson) of those in power, thus cementing their power and control.
According to the paper, Britain's favourite "entrepreneur" aims to put $100
million behind his latest scheme to build an oil refinery for airline fuel. Yes,
the Bearded Wonder is said to be about to launch a new company called - you
guessed it! - "Virgin Oil" within four or five months and is "seeking to attract
funding from other airlines and the Government...."
But, not content with this, our man from the tropical paradise has scented an
easier mark, for Sir Richard has seemingly exploited the crass celebrity-worship
of our New Labour masters, while also playing up to our ineffable Chancellor's
ever present desire to meddle in the markets.
For those of you who have held up Branson as some archetype of entrepreneurship: Stop it. Here you see a man who is attempting to finance his entry into an industry by getting the government to take money by force from the current competitors in that industry and to give it to him to finance his startup. I have always suspected Branson of being from the Orrin Boyle school of business and this just proves it.
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