The Free Market and Innovation

Throughout history, innovators have been criticized and mocked by their contemporaries. They have been accused of insanity and fraud. They have been scorned and ostracized. But when they have been free, they have been able to demonstrate the truth of their vision. When they have been free, they have been able to prove their critics wrong.

Freedom—the absence of coercion—is necessary for innovation. Without freedom, entrenched ideas and practices cannot be challenged. Without freedom, the new and different cannot be introduced into the market. Consider Uber as an example.

Wherever it has gone, Uber has met with resistance from taxi monopolies. In city after city, established companies attempt to use their political influence to prohibit Uber from operating. But when Uber has been allowed to operate, their service has been embraced by consumers. Individuals have judged the service worthy of patronage.

The free market means the freedom to produce and trade without interference. It means that innovators, such as Uber, can offer its services without controls or restrictions. It means that consumers can voluntarily use that service or refrain from doing so. It means that both producers and consumers are free to act on their own judgment.

Ironically, the cronyism advocated by taxi companies is justified on the grounds of protecting the public. Yet, that very same public has embraced Uber. The established taxi companies do not want individuals—whether it is Uber drivers or Uber customers—to act on their own judgment. They want to use government coercion to impose their standards on the rest of the community.

While Uber is winning most of its battles with local legislators, it is an exception. Countless other innovators are beat into submission and never get the opportunity to demonstrate the truth of their visions. Their feet are tied with the red tape of regulations, and they can’t take the steps necessary to move mankind forward.