Business vs. Markets
By Arnold Kling
This post is in part inspired by the “sentence to ponder” quoted by Tyler Cowen.
Consider the following matrix:
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.
There are some people on the left who are anti-business as well as anti-market. But that more populist left tends to lose out in policy discussions.
On the Republican side of the aisle, you get some folks who are pro-market. But more often they, too, confuse pro-business with pro-market.
Pro-market and anti-business might seem like an odd combination. But those of us who oppose “too-regulated-to-fail” as a strategy for large financial firms and instead support making failure a viable option for any business might be put in that camp. Those of us who want to see a free-market health insurance system replace our jerry-rigged system of employer-provided plans and state-regulated individual plans (you cannot sell health insurance to individuals across state lines) also might be put in that camp.