Free markets in libertarian society

One interesting question comes up whenever anyone critically analyzes the Election of 2016, and the appeal of Donald J. Trump. That is: can we really have free markets by removing most or all regulations and changing the regulatory apparatus? In fact many who call themselves libertarians make the same complaint Marxists make – about Big Business and its special privileges and staying power. We saw that, for instance, in Big Business Day in 1980, and in a famous essay that appeared in Consumer Reports at about the same time. Leftists made the complaint that markets are not free because Big Business can buy legislative, executive, or judicial favor to shut out small competitors.

So the question naturally arises:

Can we have free markets in a libertarian or limited-government system?

Of course we can. Free markets are what it’s all about.

But here’s the confusing part. To paraphrase Nathaniel Branden (“The Benefits and Hazards of the Philosophy of Ayn Rand”): we mean a free free market. That means one in which not only do you not have to worry about the government tripping you up every time you want to make a move, but neither does anyone else. No special privileges, no special protections against your competitors, and no such category as “too big to fail.”

This isn’t about Big Business. Nor does business have any special virtue, nor rate any special consideration, just for being big. (Or small, either.)

In libertarian free markets, you have to be nimble. And you have to realize that, when a business model is over it is over. Whether it’s horses and buggies or even Internal Combustion Engine vehicles, free markets change and pass some things by. So don’t ask for any laws to protect a business model that is failing. Move on to something else, catch the wave, and ride it – or it will swamp you.

Instructive examples

Elon Musk understands this. (It seems to have taken him awhile, but he has learned.) The General Motors (Government Motors) company, in contrast, does not. Jeff Bezos thinks he can be the next oligarch and have the law keep him there. The challenge for anyone evaluating libertarian philosophy and policy is to learn how to distinguish among the three. Leftists politicians make no such distinctions – because they want to “in-source” all productive activity. Some on the right fall into the collectivist “public policy” trap. So you’ll find them demanding “subsidies” for this or that.

Libertarianism is about the individual, and about letting the market, not any government panel, select the worthy. The ladder of success becomes easier to climb but more difficult to hang onto.