Oren Cass

FREE MARKETS, NOT FREE TRADE

If we want capitalism to deliver broad-based, rising prosperity in America, then we must have a well-theorized understanding of the conditions under which it will succeed. A model focused on ensuring that wealthy people can earn the greatest possible return on their capital is not capitalism; it’s oligarchy, and its track record is quite poor. Capitalism works for capital, labor, and consumers when all are indispensable to each other’s goals and each gains from their achievement. Interdependence is what translates the pursuit of private profit into public benefit. 

An indispensable element for maintaining this interdependence is the bounding of the market, so that the various economic actors have no alternative to each other. In a bounded market, economic analysis and legal treatment of activity depends on whether it occurs within the boundary, across it, or beyond it. That boundary might hypothetically take any form, but in practice it will be a physical boundary, typically a national one. By contrast, globalization and its underlying theory make the goal a boundless market, in which borders have as little relevance as possible to economic transactions.