≡ Menu

Markets Veto Power

In my most-recent Pittsburgh Tribune-Review column I argue that the combination of freedom to contract and to not contract renders silly most of the many assertions that employers have “power” over workers, and that large merchants have “power” over consumers.  Any such power that does exist in markets is nearly always the result of unjust special privileges, such as tariffs, granted by the state to favored groups.  Here’s a slice:

An essential component of a market economy is freedom of contract. Yet a key feature of freedom of contact is freedom not to contract — to say “no,” which protects each adult from being made worse off by those who offer to deal with him or her.

If I don’t like an automaker’s price for a car, I don’t buy that car. If I don’t like a job offer, I reject that offer. By rejecting these offers, I’m not made better off, but nor am I made worse off. My veto power requires merchants who want my business, or businesses that want me to work for them, to offer me deals that, in my judgment, improve my well-being. This veto power of mine, in other words, gives me power to protect myself from even the largest, most profitable firms — and it gives them incentives to work to improve my well-being by offering deals that I judge attractive.