By John Hood
RALEIGH — When conservatives advocate lower taxes and less regulation, their critics often retort that we’re just advancing the interest of business.
That’s either a misunderstanding or a purposeful mischaracterization. I have nothing against the business sector — some of my best friends are business executives, to paraphrase the old rationalization — but what I and my colleagues are actually defending is free enterprise.
To be pro-enterprise is not necessarily the same thing as to be pro-business, particularly if the latter is defined as encompassing any policy that might benefit a specific firm or industry. As the original pro-enterpriser, Adam Smith, put it in his Wealth of Nations: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Progressives sometimes misquote Smith’s passage as an argument for regulation. But his argument wasn’t that the inevitable collusion of business interests required a strong central government to police. Rather, Smith observed that because there is a natural inclination for economic actors to make use of whatever means might be available to give themselves an artificial advantage in the marketplace, governments should minimize the availability of such means.
Indeed, Smith followed up his warning about the potential for business conspiracies against the public by arguing against regulations or subsidy programs that allowed businesses to keep out competitors, or that aligned their interests with larger rather than smaller government.
Keeping merchants from talking to each other would be impossible “by any law which either could be executed, or would be consistent with liberty and justice,” he wrote. Instead, policymakers should protect the public interest by, for example, reducing trade barriers that protect domestic producers at the expense of consumers.
Modern-day conservatives apply Adam Smith’s insight across a variety of policy matters. On trade, we oppose the escalating tariff war between the United States and its trading partners in Europe, Asia, and the Americas, and reject as ill-advised and ill-fated the Trump administration’s stated “strategy” of imposing protectionist taxes to try to convince other countries to become less protectionist.
The concept also applies to state and local issues. Conservatives champion reforms of occupational licensing, hospital regulation, and scope-of-practice rules because we want to see more choice, competition, and innovation in these sectors. That will benefit both consumers and new entrants, even though it may well not serve the interest of existing providers.
We oppose special tax carve-outs for individual businesses or industries, even as we advocate lower tax burdens for all enterprises, large and small. That’s not a “pro-business” (or “anti-business”) position. It reflects our conviction that free enterprise is the primary driver of job creation, income gains, and social progress.
While governments do make some key investments in capital assets that facilitate growth, such as infrastructure, the vast majority of investment is private. It is very much in the general public’s interest that investors aren’t discouraged by excessive taxes or regulations from investing, and don’t have their investments distorted by targeted incentives.
In the long run, sustained gains in living standards — in how much we receive in take-home pay, and what goods and services we can purchase with it — are possible only if our labor gets increasingly productive. Capital investment is one way that happens. According to a recent study by several Iowa State University and business economists, the states that levy higher marginal tax rates on property, sales, and income earned from investment (through either personal taxes on capital gains and dividends or corporate taxes upstream of that) tend to have lower rates of output, wages, and personal income per person than states with lower, flatter, and more neutral tax rates.
When conservatives advocate smaller government, then, we don’t do it because we are “pro-business.” We do it because we are pro-progress. When government stays in its proper lane, some businesses may actually be hurt. But most of them, and most of us, are better off.
John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).
Today’s Conservative Defense of “Free Enterprise” Is a Lie
Conservatives claim they defend “free enterprise,” not big business. In theory, that sounds principled.
In practice, it’s false.
Adam Smith warned against concentrated power — not only in government but in business.
Today’s conservatives selectively quote Smith while ignoring that true free markets require guardrails to prevent monopolies, collusion, and corporate domination.
Deregulation without enforcement simply allows the largest players to crush competition, capture markets, and rig the system in their favor.
If conservatives truly defended free enterprise, they would break up monopolies, enforce antitrust laws, and prevent corporate welfare.
Instead, they slash consumer protections, underfund regulators, hand out subsidies to oil and gas giants, and carve special privileges for industries that bankroll their campaigns.
They serve concentrated wealth — not the free market, and certainly not the public.
Even the claim that conservatives oppose tariffs is hollow.
The Trump-era trade wars — cheered by the GOP — devastated farmers, raised consumer prices, and isolated America economically.
Economic freedom was abandoned the moment it became politically inconvenient.
At the state level, runaway legislatures are dismantling democracy in real time.
Laws are rewritten overnight to suppress voting, entrench political control, and protect the wealthy.
Basic support for working families — food assistance, housing, healthcare — is slashed while corporate giveaways grow.
America is being remade into a two-class system: those who have, and those who serve.
Now, they are turning their focus to public education.
Conservatives are draining public schools of funding and rerouting taxpayer dollars to private religious institutions under the banner of “school choice.”
At the same time, they are pushing state-sponsored Christianity into public classrooms — directly violating the First Amendment’s prohibition on government establishment of religion.
Students already have the right to privately pray, worship, and observe their faith individually — that is protected under the Constitution.
But public institutions cannot become pulpits for a single ideology.
Freedom of religion in America means freedom for all, not dominance by one.
And it goes further.
They are now pushing to dismantle the Department of Education itself — stripping away the last federal guardrails that protect students’ constitutional rights.
Without national oversight, states could openly impose religious doctrine, rewrite history, and discriminate against students based on ideology or identity.
Dismantling public education isn’t about “local control.”
It’s about clearing the path for unchecked political and cultural domination — beginning in the classroom.
Politicians now openly change election laws when they lose.
Districts are gerrymandered into rigged maps.
Voter suppression is rebranded as “election integrity.”
This is not democracy.
It’s engineered oligarchy.
Meanwhile, Donald Trump — the architect of this decay — projects his crimes onto others, fabricating endless lies about stolen elections and “dark forces.”
The only dark force is Trump himself, hollowing out American trust, truth, and institutions for personal survival.
This is not a debate about taxes or regulation.
It’s not about small government versus big government.
It’s about whether America remains a democracy at all.
This is not hyperbole. It is the reality unfolding in real time.
Today’s conservative movement has not forgotten Adam Smith’s warnings.
They have simply chosen to ignore them — because concentrated wealth, cultural domination, and permanent political power are now their true objectives.