Wall Street Journal Editorial Runs From Its Free-Market Principles

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“Free people and free markets.” For over 130 years, this was the principle that guided the editorial board of the Wall Street Journal.

Until March 9. That evening, the Journal posted “Now Comes the Oil Shock,” in which it called for the United States government to protect American oil producers by pressuring Saudi Arabia to end its price war with Russia. It also called for Saudi to resume indirectly fixing the price of crude oil at an artificially high level through a new production quota agreement with Russia and the other Organization of Petroleum Exporting Countries.

On March 31, like Britney Spears (“Oops! I Did It Again”), the Journal posted “Pain in the Oil Patch,” in which it took the same position.

How exactly is support for production quota agreements by a cartel of foreign governments that set prices at artificially high levels remotely compatible with advocacy for free markets?

If this policy is right for the oil industry, does the Journal support similar cartels, production quotas, and price-fixing for the auto industry? The steel industry? The textile industry? The semiconductor industry? And every other American industry?

To put it another way, does the Journal now support a national industrial policy that would have the government adopt policies to favor particular businesses and industries that it deems “winners” at the expense of other companies, industries, and consumers?

Will the Journal next advocate for a new version of the New Deal’s National Recovery Administration that used price-fixing and industry codes to limit competition and benefit selected businesses at the expense of consumers and competitors?

The Journal’s position is all the more shocking because in recent weeks it has posted several editorials proposing a very different policy to aid the economy and industry in dealing with the economic harm caused by the coronavirus pandemic: extensions of credit to essentially all businesses. A policy of very broad extensions of credit has its costs and benefits, but at least it would involve neither market-distorting price-fixing, nor picking “winners” among businesses and industries at the expense of others.

The Journal has long been an indispensable warrior for free markets in the policy arena. If the editorial page has now crossed over the policy divide to support national industrial policy, the cause of free markets will suffer and the nation and the world will be poorer.

David M. Simon is a lawyer in Chicago. The views expressed in this article are his own and not those of the law firm with which he is affiliated. For more, please see www.dmswritings.com

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