Governments can create free markets. This sounds counterintuitive, but there was a time when the Republican Party enacted legislation and produced regulation to protect free markets from themselves. When was this mythic time when parties weren’t ruled by dogma? The Progressive Era during the 1900s featured a coalescence of parties wherein President Roosevelt crafted laws that prevented corporations from acting in predatory ways. These then-new statutes enhanced and protected free markets rather than undermining them. Government intervention is not necessarily the opposite of free markets; rather, it can save free markets from their auto-cannibalistic tendencies. Contemporary political discourse has forgotten this lesson to ill effect; it would serve us well to dismantle this false binary between government intervention and free markets.

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A Davidson Parable: Last Thanksgiving, my brother and I gorged ourselves on guacamole out of a Jeb! bowl (which was in vogue at the time*). Our prodigious (or horrifying) guac consumption eventually attracted the attention of our cousin, Tim, who came over and told us that we needed a free market intervention so that he could enjoy some. But is that what really needed to happen? Or had my brother and I created a monopoly that shackled the rest of the world with its sheer force? If this was the case, then antitrust laws would be appropriate. To speak in platitudes, it’s a matter of perspective. My cousin saw the issue as one of sprawling, unchecked state control, while from our vantage point, the problem lay in our private consolidation of power. One more platitude: Any system can become oppressive when it expands beyond control.

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One common claim within socialist and anti-capitalist discourse is that capitalism only cares about profit. This is part of a larger attempt of these parties to claim a monopoly on morality. The connotation of the word “profit” is crucial here; it is a pecuniary, material word. When socialists discuss their belief system, they highlight abstract, normative values such as equality rather than anchor it to material good. However, capitalism does have normative values — growth, for instance. Promoting growth and redistribution are equally moral goals. Capitalists would do well by themselves to remember that and use growth as a lens when making policy decisions or within more everyday political discussions.

There is a second narrative that claims capitalism is antithetical to social welfare. Capitalism has a focus on growth rather than equality, which, at first glance, doesn’t seem to align with the collective good. However, the primary driver of this growth is competition between businesses. Can this competition create social good? The United States’ private sector has been a leader in medical advances for much of modern history. Unlike other Organisation for Economic Co-operation and Development nations that have socialized medicine, we have given individual businesses the higher position. These companies have competed for greater profit, which has continually advanced our medical knowledge and saved lives. 

This is not a blanket defense of our medical system. The incentive structure of medical research businesses has changed and now there is a much greater focus on paying out to shareholders than there is on groundbreaking research. The fact that the United States has more citizens uninsured than any other OECD country is unacceptable. Martin Shkreli’s — and by extension the pharmaceutical industry’s — ability to raise the price of a life-saving HIV drug 5,000 percent overnight should not be tolerated.

All things considered, the broader business model of acquiring copyrights and patents but not developing them in a meaningful way is one of our system’s most egregious failings. By not essentializing the government’s role in a capitalist country as either regulating and curtailing free markets or deregulating and encouraging free markets, we can have a more meaningful conversation about how to restore competition and equality of opportunity in America.

*Disclaimer: My family is neither bougie enough nor ironic enough to own a $75 Jeb! guacamole bowl.

Roland Davidson can be reached at mhenryda@umich.edu. 

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