Capitalism as Protectionism

In a new paper in the Cato Institute’s Policy Analysis, K. William Watson and Sallie James contend that American companies have increasingly used domestic “regulation as a way to disguise protectionist policy,” a growing problem that advantages U.S. companies at the expense of consumers. The authors counsel a skepticism toward “regulatory proposals backed by the target domestic industry,” warning of “red flags that the proposal is a product of privilege-seeking special interests disguised as altruistic consumer advocates.”

Market anarchists have long understood such mechanisms for limiting competition and thus systematically cheating consumers and workers/job-seekers. Discussing the issue over one hundred years ago, Benjamin Tucker asked, “Why are the capitalists so afraid of the logical extension of their own doctrines?” Championing the “free play for the economists’ boasted law of supply and demand,” Tucker applied Watson and James’ logic to the relationship between established firms and their domestic competitors. His argument is no less relevant today than it was in his time.

We ought to be just as mindful of regulatory protectionism as it exists within the United States’ own borders as we are of its manifestation on the global stage. Influential companies are unceasingly engaged in a competition for the control of and access to legal instruments that can hinder competition in their favor. But this is not the competition that market anarchists past or present have prescribed, instead insisting on less of this sort and more of the kind implicated by the law of equal freedom.

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory