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The Harder Question Tucker Carlson Raises for Conservatives

Tucker Carlson criticized the “free market system” in his much-discussed Fox News commentary earlier this month. Numerous commentators came immediately to the defense of the “free market system,” criticizing Carlson in return. The sides lined up predictably. More libertarian and libertarian-leaning free market conservatives versus more populist/traditionalist free market critics. By choosing up sides so quickly, conservatives continue to miss vital conversations about the nature of the U.S. (and world economy) and how conservatives, whether libertarian-leaning or not, should respond to it.

Something assumed in Carlson’s commentary, and the responses, is this: Does the U.S. have a free market economy? Or more nuanced, just how free is the U.S. economy and how does that matter when considering policy recommendations?

While Carlson said he was talking about free markets, but it is unclear he was actually discussing problems with the markets themselves, but rather an perennial challenge from the state.

Conservatives have long recognized the existence of rent-seeking and crony capitalism. Carlson criticized a legal regime that, he suggested, allows companies to repudiate earned pension commitments, adopts tax systems that discriminate in favor of capital owners and against labor, supports government activity “to make the world safe for banking” and the creation of a “finance-based economy.” We can argue about how Carlson styled each of these policy issues, but none is obviously required by free-market commitments. All can plausibly be accounted for as outcomes of rent-seeking, which is the antithesis of a free market economy rather than its exemplar.

And at that, Carlson only scratched the surface of ways that America’s current economic system fails the free market test. Do we believe state and national regulatory regimes are neutral with respect to the interests of large capital interests? Even if they are, might even a “neutral” regulatory regime deter free market entry? For example, might the cost of complying with otherwise neutral regulatory requirements impose costs that deter market entry for new firms? Let’s say the cost of paperwork for regulatory compliance in a market is $100,000 a year. That’s a drop in the bucket to large, already-existing businesses. But those costs can deter the entry of new, small businesses; businesses that without the compliance expense might otherwise start, grow and compete with existing businesses.

This possibility has at least two implications, one rhetorical and one substantive. Rhetorically, perhaps it is time for conservatives and libertarians again to insist on the distinction between “capitalism” and “free markets.” To wit, identify “capitalism,” as the name suggests, as an economic system created to serve the interests of capital. “Market systems,” in contrast, create prisoner dilemma-like incentive structures to channel the interests of capital owners (and those of other factor owners) to serve social interests more broadly. This is why, as Adam Smith observed, capital owners seek to replace the markets’ invisible hands with the visible hand of collusion. To Adam Smith’s collusion we can add today’s many incentives for rent seeking.

The tougher issue is the substantive implications for conservatives and libertarians if one were to grant that rent seeking and crony capitalism have been endemic throughout large parts of the American economy. The problem is this: Simply repealing rent-seeking policies would not necessarily reestablish the status quo ante of a free market system: One could believe businesses with real market power would never have arisen initially in a free market system while at the same time believing that capital accumulation that occurred in the past as a result of rent seeking would not be eliminated simply by repealing rent seeking policies and allowing markets to continue without further intervention from that point. The distribution of capital is different in economic systems that never accommodated rent seeking in the first place relative to economic systems that accommodated rent seeking but then, after allowing rents to be accumulated, eliminated the rent-seeking policy infrastructure.

Consider an analogy: It’s one thing to prohibit, and thereby deter, robberies in the first instance. It’s another matter entirely for a system that privileged some set of legal robberies for an extended period of time to then extend criminal statutes to cover the once privileged thefts. The new legal regime forbids new robberies going forward but does nothing to address the effects of earlier robberies.

John Locke’s discussion of injustice at the hands of a conqueror is pertinent here, we need only substitute “privileged by the crown” to apply his thoughts to rent seeking:

Should a robber break into my house, and with a dagger at my throat make me seal deeds to convey my estate to him, would this give him any title? Just such a title, by his sword, has an unjust conqueror, who forces me into submission. The injury and the crime is equal, whether committed by the wearer of a crown, or some petty villain. The title of the offender, and the number of his followers, make no difference in the offence, unless it be to aggravate it. The only difference is, great robbers punish little ones, to keep them in their obedience . . .

One can dismiss Carlson’s criticisms of the “free market system” because much of his criticism criticizes outcomes that result from impositions on the free market system. But that’s the easy way out. Let’s wave the nominal question of whether he characterizes a truly free market and instead ask whether Carlson is accurately characterizing the U.S. economy. One can concede the ills Carlson identifies without conceding that the “free market” caused those ills.

If, however, one believes the ills Carlson identifies result mainly from abuse of government power by capital owners (and others), it is nonetheless little more than utopian fancy to think merely repealing rent-seeking policies would reestablish the status quo ante as if privileged abuse of power in favor of capital never existed at all.

Justice might require implementation of policies to rectify the earlier injustices. Such rectifying interventions would be required by conservative or libertarian free-market principles rather than opposed by them. The implications of that possibility is a road much less traveled on the political right.

Reader Discussion

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on January 23, 2019 at 09:36:30 am

Too bad there was no citation to the Locke quote. I suspect Lock was not talking about "free markets," whatever they are - Rogers doesn't offer a definition, but rather, fresh from his involvement with the Rye House Plot, Locke was re-phrasing the old call to again throw off the "Norman Yoke" that was popular in the 1640s.

Rogers' further suggestion that claw backs or reparations may be in order is just bizarre under the American legal system where it is clear that a thief cannot pass good title to stolen property but is equally clear that bills of attainder and ex post facto aimed at punishing conduct that was legal at the time taken are forbidden.

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EK
on January 23, 2019 at 10:55:47 am

Locke was wrong that a holder of property with a defective title cannot deliver good title to a buyer. It is an ancient principle of common law that a purchaser for value without notice of the defect takes title to land free of the defect, and this principle has been persistent because it has ever been considered just. A purchaser in market overt, e.g. anywhere in the City of London, takes good title to personal property.

It is impossible to rectify earlier injustices in general without committing further injustices.

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Foxhuntingman
on January 23, 2019 at 12:36:30 pm

Foxhuntingkman above makes a good point. See my response to Professor Rogers for more on that. I focus on how nasty the solutions would be and on how they actually can't be carried out because the original policies created deadweight loss.

Also I challenge Professor Rogers on his understanding of corporate taxes.

See: https://www.econlib.org/the-harder-question-i-raise-for-james-r-rogers/

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David R. Henderson
on January 23, 2019 at 14:29:55 pm

Well said!

One may also consider including in the "short" list of governmental interventions those favors bestowed by the government upon certain favored NGO's which under the guise of *rectifying* past corporate malfeasance serve to impose additional costs upon BOTH the favored cronies and the poor unsuspecting rest of the citizenry.

Think Lawfare and "Consent Decrees"; think Massachussetts v EPA, etc etc

untangling this knot is beyond our capability, and dare I say, our will.

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gabe
on January 24, 2019 at 02:34:34 am

Justice might require implementation of policies to rectify the earlier injustices. Such rectifying interventions would be required by conservative or libertarian free-market principles rather than opposed by them. The implications of that possibility is a road much less traveled on the political right.

"Perhaps it is best to view some patterned principles of distributive justice as rough rules of thumb meant to approximate the general results of applying the principle of rectification of injustice. For example, lacking much historical information, and assuming (1) that victims of injustice generally do worse than they otherwise would and (2) that those from the least well-off group in the society have the highest probabilities of being the (descendants of) victims of the most serious injustice who are owed compensation by those who benefited from the injustices (assumed to be those better off, though sometimes the perpetrators will be others in the worst-off group), then a rough rule of thumb for rectifying injustices might seem to be the following: organize society so as to maximize the position of whatever group ends up least well-off in the society…. In the absence of … a treatment [of the principle of rectification] applied to a particular society, one cannot use the analysis and theory presented here to condemn any particular scheme of transfer payments, unless it is clear that no consideration of rectification of injustice would apply to justify it. Although to introduce socialism as the punishment for our sins would be to go too far, past injustices might be so great as to make necessary in the short run a more extensive state in order to rectify them.,"

Robert Nozick, Anarchy, State, and Utopia, at 231.

"[A]n equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind [in France], legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree is a politic measure, and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation. If we do not the fundamental right to labour the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state."

Thomas Jefferson, Letter to James Madison (October 28, 1785)

"I have always said that I am in favor of a minimum income for every person in the country."

Hayek on Hayek: An Autobiographical Dialogue by F. A. Hayek. See also Thomas More's Utopia (1516), advocating—perhaps satirically—social insurance and the abolition of private property.

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nobody.really
on January 24, 2019 at 11:57:55 am

It's clear Jefferson had read and understood Winstanley's complaints.

Hayek was too besotted by British high whiggism to be useful.

Nozick, as you present him, is simply a statist. Only ideologues, the naïve and philosophers think justice is anything more than the the judicial process itself.

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EK
on January 24, 2019 at 12:07:36 pm

In the US, a holder in due course of commercial paper is not treat the same as a receiver of stolen property.

Is it true that in the UK a good faith buyer for value of stolen personal can take good title from the thief?

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EK
on January 24, 2019 at 12:29:18 pm

What else should one expect from Hayek anyway as he was an "open borders" type who thought that nation states were atavistic. I suppose this aspect of Hayek's libertarian thinking comports well with his "libertarian" sense of justice and his pronounced tendency to conflate material well being (economic status / standing) with liberty and the "full life."

Hey, not unlike the *pundidiots* at National Review for whom the primary measure of national success is GNP.

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gabe
on January 30, 2019 at 05:47:13 am

[…] Criticisms such as Tucker Carlson’s suggest that American politicians, at the behest of elite economic interests, allow economic transitions to reflect lower-cost production overseas so quickly and abruptly that they cause unnecessary economic and social harm. Because this pain concentrates in lower socioeconomic strata, the argument goes, American political and economic elites do not care. Additionally, elites use the ostensible ideology of the autonomous market as an excuse to justify the neglect. […]

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Is There a Viable Conservative Alternative to Markets?
on February 07, 2019 at 06:49:32 am

[…] and even economic policies. In his controversial January 2, 2019 monologue (covered on L&L here and here), Carlson declared that “culture and economics are inseparably intertwined.” He […]

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Escaping Our Ship of Fools

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.