Five Indispensible Principles of Market Freedom

FEE.org article by Jeffrey Tucker:

Some people like to distinguish between capitalism and crony capitalism. For example, many American retailers these days are hoping for an increase in tariffs and import quotas in a way that will protect their products against foreign competition. That is, they want to use government power to guarantee their profits. It seems to me that this is better described as pure cronyism. Leave the capitalism part out of it.

If a term elucidates an idea with accuracy, great. If it causes confusion, change it. Language is constantly evolving. No particular arrangement of letters embeds an immutable meaning. And what is at stake in this debate about market freedom (or capitalism or laissez faire or the free market) is of profound importance. 

It’s the substance, not the words, we should care about.

Here are five core elements to this idea of market freedom, or whatever you want to call it. It is my short summary of the classical liberal vision of the free society and its functioning, which isn’t just about economics, but the whole of life itself. Call it capitalism if you want to.

I. Volition. Markets are about human choice at every level of society. These choices extend to every sector and every individual. You can choose your work. No one can force you into labor. At the same time, you can’t impose yourself on any employer. No one can force you to buy anything, but neither can you force someone to sell to you. Choice means agreement between all those parties to the exchange.

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II. Ownership. In a world of infinite abundance, there would be no need for ownership. But as long as we live in the material world, there will be potential conflicts over scarce resources. These conflicts can be resolved through fighting over things or through the recognition of property rights. If we prefer peace over war, volition over violence, productivity over poverty, all scarce resources -- without exception -- need private owners.

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III. Cooperation. Volition and ownership grant the right to anyone to live in a state of pure autarky. On the other hand, that won’t get you very far. You will be poor, and your life will be short. People need people to obtain a better life. We trade to our mutual betterment. We cooperate in work. We develop every form of association with each other: commercial, familial, fraternal, and religious. The lives of all of us are improved by our capacity to cooperate in some form with other people.

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IV. Learning. No one is born into this world knowing much of anything. We learn from our parents and teachers, but more importantly, we learn from the infinite bits of information that come to us every instant of the day all throughout our lives. We observe success and failure in others, and we are free to accept or reject these lessons as we see fit. In a free society, we are free to emulate others, accumulate and apply wisdom, read and absorb ideas, and extract information from any source to adapt for our own uses.

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V. Competition. When people think of capitalism, competition is perhaps the first idea that comes to mind. But the idea is widely misunderstood. It doesn’t mean that there must be several suppliers of every good or service, or that there must be a certain number of producers of anything. It means only that there should be no legal (coercive) limits on the ways in which we are permitted to serve each other. And there really are infinite ways in which this can take place.  [read more]

Good article. One principle could be added: Ethics. A business shouldn’t lie about its product or service or even lie about its competitors product or service. It’s all about reputation. If a business loses that, it loses everything especially its customers. It shouldn’t also bribe government to gain an advantage over its competitors especially small business competitors that don’t have the resources to bribe the ruling class. This crony capitalism is what gives capitalism a bad name.