Wall Street Journal editor Matthew Hennessey has aptly critiqued Vice-President JD Vance’s assertion that the market is merely “a tool, but it is not the purpose of American politics.” (“JD Vance Is Wrong: The Market Isn’t a ‘Tool,” Wall Street Journal, May 26, 2025). Hennessey contends that markets represent the natural way humans engage in trade and exchange without coercion:
The essence of a market lies in simple exchanges: I provide this, and you provide that. It is the act of trading that constitutes a market—free from faith, slogans, or physical locations. Wherever individuals convene to trade, a market exists…
Markets utilize the principles of supply and demand to coordinate economic interactions among individuals and businesses. They enable the voluntary exchange of goods and services, serving as mechanisms for shared prosperity grounded in freedom from coercion.
While Hennessey’s points hold considerable truth, they overlook a crucial philosophical argument rooted in economics that justifies the market’s existence. When individuals engage in trade, they do so with the aim of fulfilling their own preferences, whether they acknowledge it or not. Their individual pursuits—be it charity, community, or personal ambition—reflect their subjective interpretations of purpose. They do not act in pursuit of the “purpose of American politics,” unless, of course, they have fallen prey to the naïve allure of democratic idealism, or, to quote Adam Smith, become one of those “insidious and crafty animal[s], vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs” (The Wealth of Nations, Book IV, Chapter 2).
Contemporary classical libertarianism, even in its more tempered forms, is more radical than Mr. Hennessey’s defense might imply. Consider two prominent examples.
Friedrich Hayek, the 1973 Nobel laureate in economics, posited that in a truly free society, individuals are at liberty to pursue their own ends without the state imposing collective objectives that might infringe upon personal aspirations. In a self-regulating social order, there is no collective purpose; the state, apart from necessary taxation, should only establish general, abstract rules to prevent certain means that would undermine the benefits of individual freedom. For instance, while the state may legally prohibit murder and theft in accordance with the rule of law, it must not dictate an individual’s specific vocation (at least, as Hayek would assert, during peacetime, lest we open a Pandora’s box). The “public good” is fundamentally about creating rules that facilitate the pursuit of individual objectives by all members of society.
(Hayek’s ideas are thoroughly detailed in his work Law, Legislation, and Liberty, which I have reviewed on Econlib: Rules and Order, The Mirage of Social Justice, and The Political Order of a Free People.)
However, can a free society be established or sustained without imposing this goal—namely, the collective pursuit of purpose—upon individuals? James Buchanan, awarded the Nobel Prize in economics in 1986, sought to answer this very question. He aimed to develop a rational justification that transcended Hayek’s reliance on the traditional rules that have evolved through Western civilization. Buchanan’s social-contractarian approach emphasizes that a rational individual would resist being regimented to serve a collective goal that could potentially exploit him. Instead, he would only accept a set of rules chosen unanimously, granting him a veto power. The state is then tasked with enforcing these rules, ensuring they benefit every individual, while remaining constitutionally bound to avoid becoming a tool for the exploitation of some.
(Buchanan and his co-authors have elaborated on these ideas in seminal works such as The Calculus of Consent; Geoffrey Brennan and James Buchanan’s The Reason of Rules; and Buchanan’s The Limits of Liberty—ranging from the most technical to the most accessible.)
The radical essence of classical liberalism stands in stark contrast to the economic misunderstandings propagated by the crafty political creatures in power, irrespective of their alignment, be it right or left, and their accompanying factions.
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Our collective goal is the other way
