The Free Market’s Regulatory Model

Noting that “[t]he House passed a spending bill last month that would prohibit funding for EPA climate rules through the end of September,” The Hill’s Andrew Restuccia observed that the state’s budget infighting has impacts for the environment. Restuccia particularizes Washington’s policy debate about environmental regulation, contrasting Republicans and Democrats and depicting a fiery volley of accusations between politicians and bureaucrats.

The assumption, always taken for granted by Beltway insiders of good repute, is that DC’s political “inside baseball” actually means something, that the outcomes of mainstream debates on the margins can be game changers. And the larger premises of statism more generally — that in any case, regardless of the details, there’s some role for coercive authority — overhang all the terms of the debate.

Big Business, we are frequently advised, is the enemy of our natural biosphere, forever seeking new ways to sidestep its responsibilities to the environment and dirty it at will. This assumption is, in the main, difficult to contest, its evidentiary support inescapably confronting anyone paying even the least attention. This popularly understood fact, however, is attended by another assumption regarding the relationship between power and the natural world: That the state is the great taming influence on the evil corporation.

As historian Gabriel Kolko demonstrated in The Triumph of Conservatism, absolutely nothing in political life could be further from the truth. “[T]he federal government,” writes Kolko, “rather than being a source of negative opposition, always represented a source of economic gain” for Big Business. The state, in conflict with the widely-accepted story we get from “respected” outlets, allowed corporate powerhouses to “solve their economic problems by centralization.”

It doctored the economic system, introducing cartelizing regulations, to displace any trace of free market forces that — if genuinely left to themselves — would tend to shake the giant companies at their substrata. In her study of the French free market radicals, Joanna Kitchin similarly identified their view of the free market as a system that “prevents excessive enrichment due to monopolies” and “diffuses very widely the profits of industry.”

It is against this egalitarian, voluntary program of unconstrained trade that the state acts. Its regulations promote titan-sized business enterprises (indeed, make them possible), handicapping the economy in favor of the “large-scale proprietorship” that Ludwig von Mises stressed “could not be kept together” without violent state intervention. Companies sitting on huge tracts of land acquired through state coercion will, as a matter of course, tend to leave it in ruins and treat it as a dumpster.

And companies that are, due to the lack of competitive pressures, unwieldy in their largeness are inherently accident-prone, because their size is unnatural as a departure from the tendencies of real free markets. We shouldn’t be surprised, then, when, as noted by The Examiner’s Timothy P. Carney, “big utilities are itching for greenhouse-gas constraints.” When climate bills are “heartily supported” by those odious polluter corporations, it’s not some strange anomaly, but a standard feature of Washington’s collaborative effort against the kinds of businesses — small, clean and efficient — that a real free market would bring forth.

Murray Rothbard argued that state intervention allows powerful players “to evade the restrictions of free markets.” The environmental regulations that we need to create a cleaner, more habitable environment for life proceed from the market, not the violence of the state, which serves power and aids irresponsibility. The “regulations” of arbitrary force are rendered useless by the forces of free competition that constantly adjust and correct the scale of businesses to “force” them into accountability without the use of violence.

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The Anatomy of Escape
Organization Theory