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Beltway Confidential

BlackBerry’s fall, and why big business hates the free market

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Beltway Confidential,Business,Timothy P. Carney,Analysis,The New York Times,Free Market

Do you wonder why big business often lobbies for more regulation? Why the champions of any given industry are the most willing to embrace big government?

One reason: they want to slow down the workings of the free market, because the free market raises up the lowly and casts down the mighty — which is no good if you’re the mighty.

Joe Nocera at the New York Times tells the story of Wang computers, of BlackBerry, and of:

thousands of other once-dominant companies that stubbornly clung to what they thought they were instead of what they needed to be — the maker of the BlackBerry has become an object lesson in the vagaries of capitalism.

Markets change. Customers change. Competitors come and go. Regulation is the antidote to these “vagaries.”

Mattel, the largest toy manufacturer in the U.S. supported federal regulations that rewarded size punishing smaller businesses. It’s the same thing in all sorts of industries — large food producers like food regulations that keep out new entrants and disallow alternative business models.

Taxi cabs and restaurants have lobbied to block new ways of selling people rides or food.

If you’re an old-fashioned D.C. tour guide, you could adapt, collapse — or lobby to keep out innovations in tour guides. There are a thousand examples like this.

Nocera’s article shows why the free market is scariest for the biggest businesses >>

Was BlackBerry’s fall from grace inevitable? When you look at the history of dominant companies — starting with General Motors — it is easy enough to conclude yes. There are companies that occasionally manage to reinvent themselves. They are nimble and ruthless, willing to disrupt their own business model because they can sense a threat on the horizon. But they’re the exception.

Wang Laboratories is the rule. And so is BlackBerry.

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