During a recent competition law symposium in Washington, Gale Slater, who led antitrust efforts during the Trump administration, emphasized the importance of keeping the marketplace accessible for new competitors and innovations. This statement seems particularly timely. Many politicians, across party lines, seem to think it’s the government’s responsibility to generate economic outcomes instead of allowing consumers to make their own choices. This perspective risks misunderstanding the dynamism of markets and can often exacerbate the very issues regulators intend to address.
Interestingly, both Republicans and Democrats seem to embrace “industrial policy” when it aligns with their political goals. They might label it as leadership, but it often resembles another guise of central planning.
Nepotism can manifest in various ways—through subsidies for preferred industries, tax incentives for well-connected companies, or even litigation aimed at successful firms.
Take, for example, the Biden Justice Department’s recent action involving Visa. The administration expressed “concerns” about Visa’s dominance in a market already populated with numerous competitors like Mastercard, PayPal, and various fintech startups. Rather than safeguarding consumers, this legal action aimed to penalize a company for outperforming its rivals in a competitive landscape.
This isn’t really about protecting competition—it’s about manipulating it. Such government actions can distort motivation, erode trust, and shift consumer choice toward bureaucratic bias.
Consumers always pay the price
When regulators overreach, it’s consumers who bear the costs. Each dollar spent by companies to defend against baseless lawsuits is a dollar not invested in innovation. Subsidies favoring politically connected businesses create an uneven playing field against smaller competitors. New policies can delay necessary experimentation that keeps markets alive.
Those in power often claim they are “protecting competition.” Yet, genuine competition doesn’t require government intervention. What the government needs to do is step back. Entrepreneurs are the ones who establish new rivals, and it’s consumers—not bureaucrats—who determine market winners. The invisible hand of the market is a far more effective regulator than any government lawyer.
A free market thrives on minimal interference
The appropriate role for government should be quite limited: preventing fraud, enforcing contracts, and safeguarding property. This is a long way from deciding which companies are “too profitable,” which mergers are “too large,” or which sectors deserve special treatment. When regulators start playing the game, they effectively cease their role as impartial referees.
This tendency crosses party lines. Both parties have adopted some form of “industrial policy” that appears more aligned with their political agendas. They may call it leadership, but it ultimately restricts both consumers and businesses.
Ending the cycle of favoritism
The simplest and most effective step forward? Washington should stop punishing success while rewarding allies. It should allow consumers and entrepreneurs—rather than bureaucrats and lobbyists—to determine who thrives and who falls.
American prosperity is rooted in free competition and the voluntary arrangements between individuals, not in heavy-handed government oversight. Crony capitalism is effectively a form of socialism, resulting in similar stagnation and corruption.
President Trump’s administration grasped that true prosperity stems from freedom rather than favoritism. If politicians genuinely value fairness, they should embrace the tougher choice: stepping back.
