Decentralizing Markets Is More Important Than “Freeing” Them

Instead of focusing on whether a market is “free” or not, we need to start thinking about the degree to which a market remains centralized or decentralized. The feud between capitalism and socialism boils down to the role of centralized powers in a sustainable economy. Socialism tends to embrace centralization while capitalism fights to “free the markets,” which many capitalists see as a form of decentralization but often has no such effect because the freedom of markets allows for the freedom to corrupt markets through regulatory capture.

To the extent that consumers can only buy what businesses produce, and that businesses can only (legally) produce what governments will allow, the freedom of markets can only be a half-truth. We often mistake the freedom to do business with the relative freedom of the individuals involved in doing business. If freedom is power and absolute power corrupts absolutely then why should we believe that the individuals lucky enough to be freed by capitalism first won’t become as corrupt as any centralized socialist power centers? Power lends freedom but more importantly, power requires responsibility.

A sustainable economy requires maintenance, and that responsibility falls on all of us proportional to the power we have within it. Decentralized systems afford us a sort of luxury in that we don’t have to worry as much about startup costs and gaining a foothold in an industry because once we understand the incentives that align different economic systems and figure out how to reproduce them in a decentralized manner the institutions supporting the foundations of the industry will adopt them or perish. It’s not about subversion; just creating secure, legal systems tapped into the “free” market that have a decentralizing effect.