A few weeks ago, writing in the Wall Street Journal, Iain Murray of the Competitive Enterprise Institute wrote that free marketeers have taken social conservatives for granted. He wrote, in part, “The free-market coalition is in urgent need of repair. If enough conservatives join progressives in seeing free trade as a threat to their values, America could end up with protectionist policies for the foreseeable future.”
I think Mr. Murray is right. I share his embrace of the free market. But I am sympathetic to right-leaning concerns about much of corporate America. While I think free market supporters should not cheer on “creative destruction” when local businesses collapse due to free trade, I think they do have a case to sell social conservatives on the benefits of free market creative destruction.
The chief problem of social conservatives, from my vantage point as someone active in evangelical circles and the social conservative movement, centers less on worries about job loss and more on progressives using corporations to censor and punish conservatives. Banks, technology companies, and other major corporations right now seem complicit in censoring conservatives, Christians, gun manufacturers, and other groups the left hates. Conservatives routinely see, for example, Twitter uses its power to punish conservatives in ways it never uses its power against progressives.
Conservatives see banks refusing to do business with gun manufacturers and intuitively understand banks should be free to do business with those they choose, but also understand banks are doing this because of progressive concerns and would never bend so easily for conservatives. Should banks that refuse to do business with lawful enterprises be given FDIC insurance?
Conservatives see Fortune 500 companies threaten states like Georgia and Texas for advancing religious liberty legislation and protections for faith based adoption agencies. Corporations have free speech rights too, but when they reliably are used to advance leftwing causes even in conservative states, it is not hard to understand why conservatives might no longer be faithfully attached to a free market that benefits those companies. If corporations are going to reliably side with the left, they can hardly expect conservatives to just praise the system that enriches these corporations into powerhouses that can use their influence to steer social policy.
Then there is the other issue for which I have no answer, but think conservatives must give consideration. American antitrust law has long been premised on the idea that giving consumers cheaper prices is a good thing. The government is loathed to break up companies that drive down prices. But is it really a good thing that Amazon can drive down prices to the extent it can then prohibit innovation? Cheapest is not always best, but Amazon’s marketplace and its willful habit of turning a blind eye to cheap counterfeits on its website, actually prevents creative destruction in the free market. To the extent the average consumer benefits from cheap Chinese products delivered in twenty-four hours, he loses out on access to superior quality and innovation.
Several years ago, the Obama Administration sided with Amazon against Apple and book publishers over electronic books. Apple agreed to sell electronic books for higher prices than Amazon. Amazon used its clout to stop Apple, understanding that publishers would give preferential book releases to Apple. That sounds like a great deal for consumers, but Amazon inarguably then limited publishers’ abilities to innovate in electronic books and also has continued to leverage its ability to undercut the market to stifle competition.
There needs to be some recognition that, in the supply and demand curve of the digital age, tech companies who profit from clicks can use their leverage to create ceilings on prices because of their size. They do so by limiting innovative competitors through patent laws, venture capital, size, and also keeping consumer costs exceedingly low. Consumers potentially benefit in the store in which they shop, but lose out in the stores and offices in which they work.
Google now lets companies place ads above searches to target those searches. Recently, a software company placed an ad on Google tied to searches of its software. It had to because otherwise people would see their competitors ranked hired in search than their software, even though consumers were searching for their software by its name. I do not have all the answers on this front, but free marketeers need to put some thought into antitrust from the standpoint of companies using scale to stifle creative destruction.
Lastly, the free marketeers need to point out that creative destruction can never happen if the tech giants and other corporations are allowed to draft the laws and rules. Congress, in trying to regulate Facebook, will draft laws and rules focused on Facebook. But the very laws designed to regulate Facebook necessarily consider Facebook the default. That will make it harder for competitors to even have a chance to become a default social media platform. Free marketeers and conservatives already agree that companies seeking to carve out exceptions for themselves in the tax code, laws, and other regulations actually degrades the free market and keeps it from working. Government should stop picking winners and losers and everyone should acknowledge crony capitalism is wrong, but also growing in this country under both political parties.
All that said, however, if corporations continue to embrace wokeness nothing else will matter. Leveraging their capital, lobbyists, and access against conservative values and interests will just cause more conservatives to abandon their support of free markets in favor of legislative and regulatory revenge. We will all be worse off when that happens and not enough people will care.