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“Free market” ≠ “pro-business”

January 26, 2011

Art Carden has a fantastic blog on Forbes from last September that I missed until today discussing the false equivalence of “free market” with “pro-business.”  The entire article is worth reading, but the essence is in Carden’s quotation from The Rational Optimist by Matt Ridley:

I hold no brief for large corporations, whose inefficiencies, complacencies, and anti-competitive tendencies often drive me as crazy as the next man.  Like Milton Friedman, I notice that ‘business corporations in general are not defenders of free enterprise.  On the contrary, they are one of the chief sources of danger.’  They are addicted to corporate welfare, they love regulations that erect barriers to entry to their small competitors, they yearn for monopoly and they grow flabby and inefficient with age.

The most lamentable by-product of fusionism is the “rhetorical conflation of ‘pro-business’ and ‘free market'” that Carden addresses.  Libertarians should not be shills for corporations or any large company. Criticism should be aimed at corporations when they extort tax loopholes and benefits as much as unions when they restrict non-union workers in the labor market.  Corporations are great when they lower costs; they’re terrible when they receive subsidies and lobby for competition restriction.

When corporations are insulated from loss and failure, the threat of oligopoly arises and inefficiency is inevitable.  Instead of defending economic freedom for a corporation that’s anti-market in thought and deed, libertarians should criticize the sympathy for corporatism and demand market competition.  If not, liberals and socialists cannot be blamed for lacking allegiance to the market and severing economic from social freedom.

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