Aug. 2--A few weeks ago, Wal-Mart raised some eyebrows when it came out in support of the so-called "employer mandate" provision in one of the health care overhauls being discussed in Congress. The employer mandate forces businesses to pay for their employees' health insurance -- and levies a hefty penalty (such as the 8 percent payroll tax proposed by House Democrats) if they don't.

Some pundits expressed confusion that the big-box retailer, long a target of the anti-corporate left, would support such a measure. Shrewd observers, however, were not surprised. They recall the company's support for a minimum wage hike in 2005.

Both instances reflect an ugly truth: Government attempts to regulate commerce -- whether they be wage controls, health insurance mandates, or various other commands -- almost always help big businesses at the expense of their smaller competitors. Why did Wal-Mart want a higher minimum wage? We suspect that it was at least in part because the company pays the vast majority of its employees more than the minimum, while many of Wal-Mart's smaller competitors (including the much-romanticized "mom and pop stores") employ a larger proportion of minimum-wage workers -- and will therefore face higher costs. Who gains a competitive advantage when the minimum wage increases? Wal-Mart.

The same logic applies to the employer mandate: Wal-Mart currently has higher health care costs than many of its competitors, so a mandate would raise the relative payroll costs for many other retailers. Once again, advantage Wal-Mart.

None of this is new in Washington. The recent bill passed by Congress granting the FDA power to regulate tobacco includes restrictions on advertising that many believe will essentially freeze Philip Morris' huge market share. Toy giant Mattel lobbied for draconian toy safety regulations last year (which were prompted by, among other things, high amounts of lead found in . . . Mattel products). The resulting legislation has been a disaster for small independent crafters, who have found the provisions extremely costly to comply with. Large corporations such as Mattel have had little trouble adjusting to the new rules.

The moral of these stories: Leftist crusaders decry corporate hegemony, but they never seem to realize that the best constraint on big business behaving badly is . . . the free market. In a fiercely competitive globalized economy, large businesses can wield only so much market power. One of the best ways for them to consolidate that power is to lobby the government -- either to give them an unfair advantage (through subsidies and tariffs) or to create large barriers to market entry (including onerous and expensive regulations). In a true free market, the group that holds the most power is consumers.

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