However, the fact of the matter is that capitalists are rarely in favor of free markets. Rather, those with an interest in generating excess returns from their business investments are more likely to seek monopolies or oligopolies. Effective competition is looked upon as a threat, not a benefit.

Adam Smith, the godfather of free markets, published The Wealth of Nations in 1776. Of course, that year was also the date of the Declaration of Independence, another document speaking to the ideals of the Enlightenment. The former posited the benefits of the “invisible hand” which allowed that many individuals acting in their own self-interest would result in a benefit for all.

The latter promoted an idea of freedom that, while not exactly comparable, reflects the same spirit, the key to both being that individuals acting on their own would result in a much better outcome than the old order of mercantilism and monarchy.

Historically, those extolling the virtues of free markets in advancing prosperity hailed from the right side of the political spectrum, while those on the left focused on the supposed evils of unequal income and wealth. More recently, both political extremes have suggested programs that will distort markets in their preferred direction.

As I started listing the distortions, I discovered that the scorecard from each side was remarkably even. President Trump has proposed a 10% interest rate cap on credit cards; Mayor Mamdani wants to freeze rent in certain NYC apartments.

Tariffs and the immigration crackdown have caused upheaval in manufacturing, creating winners and losers that free markets didn’t. The proposed wealth tax in California and increased rates on high earners in New York have caused an exodus from those states to income tax-free Florida.

Direct intervention is currently a tool of the Administration simply because the left doesn’t have power. This includes a cut of profits on Nvidia’s chip sales to China and an ownership stake in Intel. However, I would point out that the Biden Administration kicked off Industrial Policy during their time in office.

Where then can we look to find unfettered markets?

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One might be tempted to look to sports betting or the prediction markets. Unfortunately, the former have been tainted by point shaving scandals while the latter delivered a windfall to a prescient punter who predicted that Maduro would not remain in office just before the US extracted him.

That event prompted one commentator to suggest that inside information should be allowed because it offered a better prediction of what would occur. I hardly have to point out that manipulation is the exact opposite of the wisdom of the masses.

With little support for the idea of free markets, investing has become an exercise in finding those companies that can best profit from the current landscape. Warren Buffet popularized the idea of a “moat” around a company’s business as protection of its profits. So, we are confronted by, perhaps, the most successful capitalist of all time basing his investment philosophy on undermining free markets.

The sad fact is that free markets are really the best way to organize an economy for the benefit of the many versus the few. The so-called “K-shaped” economy where the wealthy, buoyed by stock market wealth, account for the lion’s share of consumption while the rest of the country labors to make ends meet is a perfect example of how free markets have been subverted. Note that the pillars of AI represent a laundry list of companies with near monopoly positions: Nvidia, Google, Microsoft, Amazon, Meta.

I’m afraid that the right in the form of the Trump Administration is more in favor of putting a thumb on the scale than it is in letting markets function. The left is, and always has been, opposed to letting free markets operate because they incorrectly assumed that capitalism’s faults are due to freedom rather than control.

The Gilded Age, which encompassed the last decade of the 1800s and the early part of the 20th century, also exhibited free markets under assault. The reaction at that time was muckraking journalism and the enactment of anti-trust regulation.

This pushback against monopolies and market manipulation was eventually successful. I believe that we may be at the point where a reprise is necessary to create the environment for a more democratic economy.