One under-appreciated aspect of the interaction between business and government is the way in which big business often collaborates with the big government. A case in point is the account in today's Wall Street Journal of how the parent of Philip Morris USA is welcoming legislation that would have the Food and Drug Administration regulate cigarettes. The Journal reports:
Passage of the tobacco legislation will mark a big victory for Altria Inc., parent of Philip Morris USA, because it includes new restrictions on advertising and packaging that will make it difficult for other companies to gain attention for their brands.
Just as the government's deals with General Motors and Chrysler may make things tougher for Tata and Tesla, a government deal on tobacco regulation will make it more difficult for anyone to attempt a new entry to the tobacco market or even to gain substantial market share. Anti-smoking advocates may say we don't want new entrants to the tobacco market. But cigarettes are just as deadly whether they are made by a big old company or a small new company. The big old companies are just in a better position to lobby for friendly government policies, whether they are subsidies or regulations, than are the new entrants or those sitting on the sidelines considering whether to get into the business.