Last week I had a few posts on the conservative position on free markets. I thought the position had some real inconsistencies. I admit I hadn’t thought through the best way to state my objections, and the discussion seems to have continued on at Bill Polley’s place where I wrote this:
If the private sector is more efficient than the public sector, and I think we all could agree that most US laws and regulations are not relevant to EBay and the business of its buyers and sellers, why wouldn’t it make sense for an EBay to come around that was not subject to those laws, and in fact, set its own rules. Those rules would be only those parts of the law that would be beneficial to EBay and its users.
I assume a true conservative would feel that EBay can do a better job of determining what such rules would look like than the US government and would produce something better suited to its needs and the needs of its customers than the hodge podge that is the current body of US law. (We’re not talking about something excessively complex. A few good attorneys and a legal budget of $10K ought to do it. Even if I’m off by two orders of magnitude, we’re talking peanuts to EBay.)
Given how easy and inexpensive it would be to reach this happy state of somewhat less regulation, where the amount of “less” is defined by EBay and/or its users, one can only wonder why nobody is doing it.
Bill’s response is that institutions matter. EBay is willing to put up with US regulations because they get US institutions as part of the bargain. I agree with this, of course.
But I still have a few questions about the conservative position:
Are the institutions and the regulations separable? If not, then it doesn’t make any sense to say one is for less regulation but for stronger institutions. If yes, well, it should be possible to create those institutions elsewhere.