Recent studies estimate that the federal regulatory burden has impaired the United States economy to the tune of almost $40 trillion, “act[ing] as a hidden tax on individuals.” Precluding new competitors and entrepreneurship, new regulations often favor established firms at the expense of both consumers and economic growth generally.
What’s more, left-wing revisionists such as Gabriel Kolko have convincingly argued that suffocating and overwhelming smaller competitors has too often been just the point of new regulations — or at the very least among their prime motivations. Far from high-minded concerns about consumer protection, big business has lobbied for higher regulatory barriers as a way to rid the markets of inconvenient pests in the form of smaller businesses.
Market anarchists thus contend that the state’s role in the economy has not been to rein in the avarice of errant corporate power, but rather to harm individuals and the overall economy for a favored few. We counsel a different kind of regulation to replace the arbitrary, centralized approach of the present.
True, free markets are without regulation by decree, emanating from a small group of self-styled experts in alphabet soup government agencies. But the rigors of competition nevertheless furnish their own kind of regulation, one more narrowly tailored to the forms of protection consumers actually want and need. Should we consider the way competition operates, it will prove no surprise that the spontaneously emerging regulations of freed markets better serve the ostensible aims of legitimate consumer safety.
If it seems to be too easy for we libertarians to assert that markets simply regulate themselves, consider that in fact it is competitors who are continually regulating each other. Doubtless in a free market these competitors could band together, voluntarily forming monopolistic trusts in order to squeeze consumers. But free and open competition sans coercive barriers to entry disincentives this at every turn, whereas the arbitrary power of central government agencies virtually guarantees that the politically connected will use agencies’ rule-making authority to destroy potential competitors and accordingly form cartels.
If coercive, anti-competitive monopolies are our fear — as indeed they ought to be — we might be especially hesitant to embrace still more centralized power, to trust important decisions to the few as opposed to distributing them through networks. Under a system of genuine freedom of competition, both information and economic power are more widely and even distributed as a result of constant testing and recalibration.
Individualist anarchists like Benjamin Tucker even thought that competition, fully realized and unrestricted, would be powerful enough to wipe out rent, interest and profit, sources of income regarded as not based on labor. Indeed, Tucker regarded himself as a socialist in a time before that the term came to be defined in such a way as to preclude champions of free markets.
Whether or not we agree with Tucker’s prediction, certainly a free, decentralized economy — or, more accurately, network of economies — would serve consumers better than the handful of corporate titans we have at present. US history, especially in the 20th century, seems clearly to demonstrate that concentrated governmental power actually aids and abets concentrated commercial power rather than curbing it.
Fewer restrictions and regulations would mean a more vigorous, sturdy U.S. economy and more opportunity for the most disadvantaged people in American society. Such is an agenda that both left and right, Democrats and Republicans, should want to get behind, and it is an agenda that the state and its courtiers will fight at every chance.