Markets in Everything and not Just in Theory

The main arguments for government intervention center around public goods and collective action problems.  These arguments are weakening.  Far from being the sole domain of bureaucracies, these are the areas with the most opportunity for innovation.  We see more of it every day, and there is more to come.

Scholars in the classical liberal tradition have argued on ethical and efficiency grounds for markets in everything.  Odd as it may at first strike us the commodification of everything from vital organs to votes allows for freer, fairer allocation and coordination and reduces waste.  Many people will debate the desirability and possibility of markets in everything.  These are interesting discussions but the great thing is no one needs to win them.  We can create markets in everything right now.

Consider AirBnB or Uber as a first step.  People have unused resources like a spare room or a car.  Technology reduces transaction costs associated with simultaneous coordination among thousands of people.  We can turn our unused resources into valuable commodities to buy and sell.  Take it a step further and consider what else we could do.  Why not solve collective action problems that plague community projects with Kickstarter or Groupon like mechanisms?  Want a new park in the neighborhood, setup the campaign and don’t break ground until enough people have voluntarily pledged.  Those who don’t will be easily seen and neighbors can try to convince them to join.  No one’s taxes or HOA dues go up across the board or against their will.  No simple majority can force everyone to their preferred allocation of resources.

There is nothing inherently noble about the political means of allocating resources and addressing collective action problems.  In fact, it comes with a whole heap of unique problems.  Opportunity exists all around us to move more and more processes out of arbitrary first-come-first-serve and political machinations and into the dynamic, voluntary marketplace.

In fact, the less of a market you see in a good, service, or industry, the greater the opportunity.  I launched Praxis because higher education had become more and more cartelized.  There’s not enough of a market.  I want to bring higher ed back into a more competitive market.  Health care, transportation, and finance are top candidates for major disruption.  They’ve become stagnant and further and further removed from the open market process.  That creates wedges of opportunity.  From the major to the mundane, technology allows us instant, decentralized communication and reduces transaction costs associated with large groups with diverse desires.  These means we can bring just about anything into the world of free exchange and enjoy all the advantages and flexibility of the price mechanism.

What can you bring to the market?  I’m excited to see what’s next.