Who is the biggest enemy of the free market system? The late Milton Friedman, one of the 20th century’s most prominent free market champions, had a surprising answer: the business community.
Economist Arnold Kling explains why support for markets and business are not the same thing:
Consider the following matrix:
Pro-Business Anti-Business Pro-Market Anti-Market The point is that there really are four separate categories, not just the two pro’s and the two anti’s. On health care reform and bank regulation, I would argue that the Obama Administration is trying to be pro-business and anti-market. The wonks do not trust markets at all, and they think they can do a better job of regulating them. But they are more than willing to keep big business interests happy.
An important point is that well-established businesses do not trust markets either. The last thing that a well-established business wants to see is a free market. What it wants is a regulated market that keeps competitors at bay. The people who benefit from free markets are small entrepreneurs and, above all, consumers.
My sense is that until the 1980s conservatives (as opposed to Republicans) tended to lean toward the pro-market/anti-business side. During the Reagan years, though, the pro-market and pro-business sides created a fusionism that paralleled the alliance of libertarians and conservatives. This went largely unchanged for decades until a rift began to appear during the 2008 presidential primary (Huckabee leaned pro-market, while Romney skewed pro-business, and McCain seemed not to know the difference) until the financial crisis and the bailouts began. Similarly, liberals were anti-market and (moderately) anti-business until the Clinton era. After the 2000s, the Democrats remained anti-market while becoming much more pro-business.
I suspect we’ll soon see a new realignment with conservatives (again, as opposed to Republicans) moving back to the pro-market and anti-business while the Democrats (as opposed to populist liberals) become more comfortable admitting they are pro-business and anti-market.
For many reasons, I believe it’s more important for Christians in America to be more pro-market (which is more conducive to freedom and virtue than it’s alternative) than to be either pro- or anti- business. When business is aligned with the interest of free markets, we should be pro-business; when business is aligned against free markets we should be anti-business.
Obviously, such a claim about what all Christians should do needs further explanation and a robust defense. That, of course, is a key part of the ongoing mission of the Acton Institute, so I hope to do that often in the near future. But a necessary prolegomena is to point out that being pro-market does not mean being pro-business and being anti-market does not require being anti-business. This is one of the most misunderstood connections in modern thinking about economics and public policy. Only by clearing up the general public’s misconception about this point can we have an informed debate and make progress toward a more free market system.
