I propose that we dispense with the rhetorical conflation of “pro-business” and “free market.” Or at the very least we should understand the difference between the two. One of the key features of a free market is that it is a system of profit and loss. The “free” part of “free market” means free entry and exit. In a market economy, you are free to earn and enjoy enormous profits as your just reward for taking the world as you found it and producing some kind of new good or service that makes the world a better place. In economists’ parlance, you earn profits by creating wealth.

At the same time, you are free to enjoy enormous losses as your just punishment for taking the world as you found it and producing something that actually makes it a worse place. In other words, you earn losses when you destroy wealth and waste resources.

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Consider the following scenarios and ask what the “pro business” and “free market” outcomes would be:

1.  A private company wants a patch of ground on which to build a hotel, a grocery store, a shopping center, or an office building. The “pro-business” solution is to seize the land via eminent domain and claim that the increased tax revenue is a public benefit (if increased tax revenue is going to be our standard, why don’t we compel labor force participation and make everyone sell their property to special interests?). The free market solution says “if the owner will sell to you, it’s yours, but don’t expect to be able to get government officials with guns to go get it for you.”

2.  A private company is struggling to make ends meet. It manufactures a product that no one wants to buy. The “pro-business” solution is to raise taxes and give the proceeds to the company or lend the proceeds to them at a reduced interest rate. The “free market” solution says “either get better at what you’re doing, or get out of the way of those who can.”

3.  A private company faces competition from foreign producers. The “pro-business” solution is to regulate or tax foreign products to make them more costly relative to the domestic product. The “free market” solution says “get better at what you’re doing, or relinquish the resources under your control to those who can better serve consumers.”

Do free-market solutions sound harsh? Perhaps. Is it cruel to leave the fate of a business up to the vicissitudes of market competition? I don’t think so. In a free market, people compete to see who can best secure others’ cooperation. Government, on the other hand, works by the threat of violence. If we’re going to use government to protect a business, we can only do it by threatening violence against its potential competitors.