The big difference between being pro-market and pro-business
There’s a rhetorical rift building between conservatives and classical liberals over what, if anything, to do about big business.
While this debate requires setting aside the populism that’s replaced old-line conservative thought in recent years, how does such a difference of opinion – with one side increasingly sounding like Democrats and the other caricatured as country club Republicans – get resolved?
Iain Murray writes that resolving the dispute begins with a close look at what classical liberals actually believe about markets, business and government. It begins with the over-riding principle that classical liberals are pro-market, not pro-business. But it builds from there:
…Adam Smith is our guide. He noted that, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
In other words, businesses are selfish, perhaps even greedy. However, the market turns those sins to virtuous results. We do get our dinner because of them, and market discipline prevents the sins from being too much of a problem. When regulation gets in the way, market discipline breaks down. For instance, that discipline gives us good customer service, but in a jurisdiction where tips are banned, the incentive for better service goes away.
This suspicion of business, combined with the recognition of the beneficial effects of the market economy, is why most classical liberals describe themselves as pro-market, not pro-business. We might celebrate some of the great advances Amazon has brought us in terms of bundled services, quick delivery, and lower transaction costs, but we would have no problem with Amazon being outcompeted into oblivion.
The bottom line: turning to government, via tariffs, regulation, anti-trust, taxation, etc. is a one-way ticket to bigger government and less freedom. The far better approach:
The invisible hand beats the ink-stained hand of the bureaucrat every time.
Indeed it does.