One potent argument for free markets is that they make individual liberty and autonomy possible. To use an example from Milton Friedman’s 1962 book Capitalism and Freedom, it is unlikely that both the Wall Street Journal and the Daily Worker would have equal access to newsprint if paper were allocated by government instead of markets. Same for other means of communication. But is it true that free markets always work in the impersonal, non-discriminatory way implied by this argument?

One problem is the following. If society is populated by meddlers—busybodies who are intent on interfering with other people’s preferences and choices—even free markets may fail to respond to some individual preferences. Businesses could be led, by their own self-interest, to obey the meddlers’ mob for fear of being commercially “canceled” (see my Econlog post “The Political Firm”).

We get a taste of this possibility not only with the social networks but also with Zoom’s conferencing service, as documented by the Wall Street Journal (“Zoom Video Tackles Tricky Role of Policing Its Service,” November 3, 2020):

Zoom said users may not use its service to break the law, promote violence, display nudity or commit other infractions. … In cases where Zoom has taken action and blocked a public event, the company has said it acted once it became aware of a virtual gathering that would transgress its rule or local laws. … Zoom in September blocked the use of its service for a webinar at San Francisco State University. The meeting was due to feature Leila Khaled, a member of the Popular Front for the Liberation of Palestine, which the U.S. government has designated a terrorist organization. … Zoom also blocked a series of follow-up Zoom webinars in October organized, in part, by a pro-Palestinian group in conjunction with staff at several U.S. and overseas universities to address what they said was censorship by the company. … The Council on Foreign Relations in September held a virtual meeting with Iran’s foreign minister. The minister was sanctioned by the U.S. last year, so the meeting would have violated Zoom’s rules. It allowed the meeting to take place after the think tank showed it had approval from the U.S. government for a prior meeting with the minister.

This case suggests many reflections. This is another example showing how a government’s “international sanctions” are in fact bans against its own subjects (see my posts “New Sanctions Against Americans” and “American Sanctions: Why Foreigners Obey”). Note that American spies may not be happy, for what is a better way to learn about threats to “national security” than to let the authors of the threats discuss them openly?

To justify its discrimination against some customers, Zoom invokes “local laws,” as it does in China. But it is not only laws that count; the meddlers’ mob and wokism are visible behind “nudity” and “other infractions.” A century or two ago, if not more recently, Zoom’s services might not have been made available for meetings of individuals among the despised minorities of the times. Which brings us back to our original question: Can free markets help solve the social-meddling problem? The question is particularly pregnant since we cannot undermine the property rights of private owners of medias or other companies without dire future consequences.

Against the claim that free markets cannot prevent meddling by opinion mobs, a counter-argument is that as long as market entry is not forbidden by law, entrepreneurs with minority tastes or simply armed with naked self-interest will come to the rescue of socially oppressed people. At the limit, even if the state enforces the meddling mob’s tastes, smuggling and black markets (including their virtual forms) will offer needed alternatives. As Étienne de la Boétie would say, private vices are public virtues, the limit being in behaviors that are unanimously (or perhaps nearly unanimously) rejected such as murder and theft.

It is true that when private entrepreneurs cater to minority tastes and values, the beneficiaries may have to pay a supplement for that. Alternatives to Zoom may not, for a while, be as cost-effective. People discriminated against under McCarthyism might have found themselves in lower-paying jobs (another Friedman example) than they would otherwise have. Another way to see this is that if a large number of people show a “taste for meddling” (analogous to Gary Becker‘s “taste for discrimination“), that is, if we live in a society of meddlers, free markets will not completely eliminate the handicap of individuals who don’t share the preferences of the meddling majority. Entrepreneurs must choose between the cost for them of shunning the untouchables and the cost of “canceling” by the meddlers.

However, for the social eccentrics or pariahs–whoever they are as discriminatory fashions come and go–the cost of satisfying their preferences is still higher if, instead of social pressures, they face government bans and punishments. Markets are not perfect but political processes are even more imperfect. Overcoming private discrimination is not necessarily easy but fighting official discrimination (called “apartheid” in race relations) is more difficult. It is surprising how many people think that the government will protect minorities against majority prejudice while, during nearly all of mankind’s history, political authorities have amplified mob prejudice instead.

Economic theory suggests that a society of meddlers, like ours looks like, cannot be as economically efficient as a society of free-minded individuals and free enterprise. The reason is that economic efficiency is defined in terms of the satisfaction of individual preferences.