Corporate "Scandal," or Political Corruption?

In Another Black Eye for J&J, the NJ Star-Ledger used news reports of a case of alleged fraud by Johnson &Johnson to launch a broadside against big business. After citing numerous companies hit with fines for alleged "scandals," the editors wrote:

More and more, we’re watching the erosion of corporate citizenship — the boardroom’s willingness to victimize consumers in search of ever-larger mounds of cash. Corporate behavior has grown shameful. 

What is the nature of this "shameful" corporate behavior? The editors conflate two diametrically opposed types of "corporate crimes." I left the following comments: 

Are there instances of fraud in the corporate world? Of course. 

But, these pale into insignificance compared to the political corruption of the economy. Almost every instance  of corporate "scandal" listed here are actually instances of the political abuse of power victimizing business. 

• Selling unapproved drugs? The government has no right to forbid the sale of drugs to willing consumers in the first place. These companies paid fines for exercising their rights.
• Wal-Mart was a victim of extortion from Mexican politicians who had no right to stop it from opening stores and doing business with willing consumers. Wal-Mart paid "bribes" for the privilege of exercising its rights.
• The banks have been almost uniformly vilified for a crisis engineered and facilitated from Washington, and forced on the mortgage banking industry. 
• Even BP's well catastrophe, for which its fines are justified, was at least partially the result of perverse incentives created by Washington politicians that legally limited the liability of deep-water drillers to "encourage" Gulf oil exploration. (BTW, Menendez and Lautenberg voted for the liability limits.)

The government's job is to protect individual rights, which includes remediating breech of contract and prosecuting fraud. By all means, the government should vigorously do its job in this regard.

But individual rights includes the rights of businessmen and consumers to contract and trade voluntarily to mutual advantage. Most of the banks, most pharmaceutical companies, Wal-Mart, and many other companies such as those prosecuted under the anti-trust laws (like Apple and Google) are not villains: They are victims of a government that corrupts the economy by interfering in the freedom of production and trade.

President Obama said in his inauguration speech that we need not discuss the meaning of liberty or the proper role of government. He's wrong. That's exactly what we should be doing. 

Related reading:

Antitrust Prosecution of Apple is Rotten

The BP Gulf Disaster: the Proximate vs. the Ultimate Cause

Wal-Mart's Mexican "Bribery" is Really Political Extortion