17 Jun Why We Need Truly Free Markets
Hanging over the Oval Office fireplace is a portrait of Franklin D. Roosevelt—a pointed reminder of the Biden administration’s grandiose ambitions. In the past calendar year, Congress passed three of the largest congressional bills in U.S. history. Add to that the murmurings of student loan forgiveness, an expensive healthcare system that may be further subsidized, and a proposed “family plan,” and the result is a federal government “solving” the problems of our time in ways we’ve rarely seen. Liberals frame their policies as the antidote to what they argue is a “capitalist system” of exploitation, and conservatives are quick to label such programs as “socialist.” In truth, these policies represent not capitalism as a system of free exchange, but the ultimate form of crony capitalism—the explicit exchange of favors between business and government, which takes power and money from the people and centralizes it in the hands of a few elites. Today’s Left equates the two because it offers not a return to a free economy, but just a different form of elite domination.
The real conflict of our time, then, ought to be understood as the struggle for localized and virtuous free markets against a corrupt political-economic regime. That ought to unite Americans in the defense of freedom.
Almost since its modern inception, the Left has fought to redefine capitalism as a system that enriches the few, allowing them to exploit the rest in outrageous and dehumanizing ways. No doubt, there is a kernel of truth to be found in this critique. Wages seen relative stagnation for over 50 years, students are no longer able to pay their way through college with work, Americans pay for the most expensive healthcare in the world, and families have been separated and scattered across the country in search of marginally better opportunities.
The billionaire class continues to skirt the virtues of responsibility, care, and real investment in their fellow citizens. Consider how Elon Musk and Jeff Bezos do business: they have lobbied their way to the top of their industries, eliminated barriers of entry for themselves, such as tax, while leaving them in place for others, which functionally works to eliminate competition.
Amazon functions as a good representative example of this corruption. They continue to grow unchallenged as the government has eliminated their risk. Amazon’s zealous pursuit of tax avoidance at all levels resulted in an effective tax rate of -1.2% in 2018, 1.2% in 2019, and 9.4% in 2020. In 2018, Amazon purchased the doorbell camera company Ring. Today we know that they grant local law enforcement access requests without warrants, effectively bypassing constitutional and statutory protections. Before breaking ground for their 2025 open date of HQ2, they were promised over $1 billion in incentives by Arlington, Virginia. Amazon’s model is causing already wealthy cities to become richer by extracting money from rural communities who would otherwise shop local than sign up for 2-day free shipping. This move to centralize commerce robs individuals of choice, exacerbates existing inequalities, deflates standards of living, and makes it impossible for small businesses to compete with them.
This is a failure of representative government to act in the interests of the people. “There is a reason,” said Senator Jim DeMint in an interview last year, “that seven of the richest counties in America are in or around Washington, D.C. This is where the power comes.” Using public funds to serve the interests of a relative few over the actual public distorts the market’s incentives: In 2014, Samuel Gregg explained, “the focus is no longer upon prospering through creating, refining, and offering products and services at competitive prices. Instead, economic success depends upon people’s ability to harness government power to stack the economic deck in their favor. . . . All that matters . . . is closeness to state power.” When control is centralized, whether at the level of the federal government or of a multinational corporation, both citizens and stockholders lose power.
This closeness to state power is pursued at the expense of market demands across local communities. Conceptually, as the size of the federal government expands, it encourages businesses to abandon their place in a “risk for reward” framework within the free market. The government replaces this with a “reward and we will insulate risk” framework—at the expense of working people. In the case of green energy, for instance, government requirements to abandon carbon do not just represent burgeoning subsidies for solar, wind, and electric, but a takeover of the energy industry with the intent to expand Democratic political-economic partnerships. This is all done under the pretext of saving planet earth. But this order does not benefit working people, it only enriches elites.
The Left has rather successfully established this premise: crony capitalism is capitalism. Conservatives, as defenders of capitalism, are saddled with the blame for the consequences of rampant cronyism, monopoly power, and corruption. This kind of bait-and-switch results less in an argument and more in an aggressive meme war, currently being won by the Left.
Amazon wielding its power is the perfect example of what cronyism produces. The Left draws a false equivalence between cronyism and capitalism in order to offer centralized solutions to a problem they helped create from the start. The conservative response should be to ensure power is returned to communities, not re-conceptualized as greater state ownership of goods and services. As Danny Caine, owner of the independent The Raven Book Store in Lawrence, Kansas says, the most direct route to defeating Amazon includes shopping local, canceling your Amazon account, and avoiding Amazon-affiliated brands. However, this individualizes a problem that was codified into law by elites. Returning to a free market system also requires dismantling this country’s matrix of regulations that were designed not with public safety in mind, but the enrichment of those engaged in the corrupt political-economic regime. If this all sounds difficult, it is. Cronyism seeks to undermine and prevent a return to free markets.
There is an opportunity to create alliances. The working Left is not against profit and one’s ability to be enterprising. Across ideological divisions, working-class people oppose big tech handouts, corporations paying a zero-tax rate, and political action committees, which have legitimized dark money contributions across elections. These are hardly anti-capitalist positions, and their widespread acceptance by those on the working Left explains why blanket accusations of “socialist” do not ring true for them.
As Americans, we must reconnect to American culture. Championing free and virtuous enterprise can unite us around a common purpose and ensure a prosperous United States for generations to come. Championing market-driven creativity is only possible when the greatest amount of people have access to the market. The working Left is right when they say today’s ordering of the world is doing more harm than good. However, it’s not capitalism we should be against, but the centralization of power that elites of all stripes continue to support. Let’s offer a better way. Advocating for localized solutions must not be code for doing nothing. Rather, it must be a real strategy to empower people. When this is made clear, we will discover we have allies in the most unexpected places and will lead communities into greater prosperity.
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