Regulation, rent seeking, and business ethics

Christel Koop and John Meadowcroft

In the autumn of 1979, US car maker Ford was struggling to compete with cheaper imports from Japan and was considering asking the US government for protection from this unwelcome foreign competition. Ford’s chief economist at the time, William A. Niskanen, wrote a memo to the company’s executives arguing that Ford should maintain its historic commitment to free trade. He stated that if Ford should lobby the government, it should be for the removal of existing tariffs on steel, engines and other components that the company presently imported (Simison 1980). Niskanen warned that the government did not give away special favours for free, so any protection the ...

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