Markets and Business: Understanding the Difference

The Koch Brothers.

It is a common canard among those on the left that libertarians are in the pocket of big business. Apparently, we want to end regulations so our corporate masters can run rough-shod over the rights of the underclasses and generally do all the evils they think big business get up to (no doubt involving much cigar smoking, whiskey swilling, and peasant hunting).

But if our views were so very popular with corporate overlords and robber barons, why is it that our political organizations see so little money from them? Sure, there are some rich folks like the Koch brothers who back libertarian advocacy groups and think tanks, but even they blanch at the thought of giving money to a Libertarian candidate. Even Rand Paul, who ran one of the most libertarian candidacies for the Republican nomination in decades, was denied anything close to the corporate support received by the likes of Jeb Bush and Marco Rubio.

Libertarian causes tend to operate in a separate ecosystem, only rarely getting their two cents into the actual policy discussion. And when they do, it tends only to be from the advisory position. Politicians may look to the Cato Institute or Hoover Institution for some information, but they rarely bring them into the serious business of policy development.

So why, if we are so obviously excluded from the great councils of power, are we constantly branded as shills for big business?

The answer lies in the left’s inability to distinguish between markets and business. To them, the whole dirty business of capitalism is tainted. Clearly, if businesses are what operate in markets, then surely they are essentially the same thing and libertarians must love them and hate the poor, right?


Markets are not the same as business, and being pro-markets does not make you pro-business. This is actually a core difference between the economic policies of libertarians and the two main parties. Both the Republicans and Democrats are pro-business in their own ways (as much as the Democrats do their best to hid this fact). The Republicans are certainly more overt, and market themselves as the part of business. This marketing has paid off and generally won the Republicans a comparative advantage in terms of support from most major industries.

Being pro-business involves working to make the lives of businesses easier. This can mean writing loopholes in the tax code, providing special favors to industries, protecting certain industries from unwanted competition, and throwing up other barriers to new entrants and disruptors. Businesses can use their institutional and incumbent power to make it harder for them to be dislodged. When that happens, markets are distorted. Thus being pro-business can frequently mean being anti-market.

This is why libertarians are not the darlings of big business. We support free and open markets, which means no special breaks, no special protections, no special privileges, and no special power over policy formation. Big business likes its cozy relationship with the existing power structure. Why would it ever want to throw its weight behind a movement that wants to take away its privileges?

Libertarianism at its core is about breaking down those barriers. We want the most dynamic economy possible, one in which every individual can compete in an open market. Politicians hate open markets in politics, and industry leaders hate open markets in commerce. In the game of self-interest, which life ultimately is, giving such power to elites is always a danger.

As long as we stand against the entrenchment of favored interests and powers, we will never get the backing of big business. We need to make that distinction much clearer. If we do, we might find a lot more converts to the cause.

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John Engle

John Engle is a merchant banker and author living in the Chicago area. His company, Almington Capital, invests in both early-stage venture capital and in public equities. His writing has been featured in a number of academic journals, as well as the blogs of the Heartland Institute, Grassroot Institute, and Tenth Amendment Center. A graduate of Trinity College Dublin, Ireland and the University of Oxford, John’s first book, Trinity Student Pranks: A History of Mischief and Mayhem, was published in September 2013.