Economy

Free Markets ... Really

A new conservative organization aims to right the wrongs of supposedly unfettered markets.

Robin Smith · Feb. 24, 2020

A new group is causing a bit of a stir among talkingheads, columnists, and policy wonks on the Right. American Compass, a new organization set to supposedly reclaim the conservative mantle of capitalism that aims to serve all Americans from the supposed wild west of libertarian free markets, announced its founding last week. It features folks associated with Sens. Marco Rubio and Mitt Romney, along with the Heritage Foundation’s PAC and Hillsdale College, among other notable policy wells.

The group’s argument is simply that the economy under President Donald Trump is being run by free-market fundamentalism and is leaving many behind.

Yet to accept the premise of the American Compass folks, one would have to believe that federal, state, and local governments are pretty much hands-off in their approach to markets. Clearly, that’s just not so. Governments at all three levels routinely pick winners and losers, which always ends up yielding more regulation. That in turn creates imbalance and the redistribution of wealth, which permits bad behavior among individuals who, in completely free markets, would instead stand responsible for behavior and choices.

Sounding a great deal like social justice lite, American Compass Executive Director Oren Cass declares, “Conservative economics will take seriously the effects of social and market forces on each other. It will concern itself with the pernicious effects that the high level of economic inequality can have on the social fabric, the market’s functioning and people’s well-being.”

Instead of focusing on this new group that will get big money, write papers, and posit a new intellectual approach to markets, what if conservatives just addressed the perverted incentives and the constructs of a market that still picks winners and losers?

Let’s take a look.

A growing number of Americans are not embracing socialism because of the failure of capitalism or the mythically unfettered free market. Socialism is popularized in theory because much of America’s economy is influenced by corporatism and cronyism posing as capitalism.

Socialism is an economy of wealth redistribution void of merit or responsibility with concentrated power in the hands of the governing elite overseeing said redistribution. Cronyism is a framework of business where success results from government picking winners and losers with targeted tax breaks or protection laws that either prohibit competition or assist in erecting barriers to competition. Corporatism merges aspects of capitalism and socialism without the complete destruction of private-property rights, but it essentially protects big companies from free-market forces for some identified “public good” that typically serves the well-connected interests of the governing elite over the consumer or other competing interests.

It is not “free-market capitalism” to allow banking, health systems, big tech, and all things big to find protections from competition and distortions of market forces under the premise of a “public good” when the government selectivity protects certain interests and not the power of the individual consumer.

Critics of capitalism are angered with misbehaving capitalists. Bad actors give any effort, cause, or endeavor a bad name. The greedy, the immoral, and the corrupt who operate behind the guise of free markets but are predatory or exploitive give capitalism a bad name. Hence, laws and regulations are put in place to deal with the bad actors and, thus, change the market influence and forces. As William F. Buckley Jr. often quoted, “The trouble with socialism is socialism. The trouble with capitalism is capitalists.” The solution isn’t to fight the straw man of supposedly unfettered markets.

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