The subprime crisis teaches us that neither private property nor the free market can exist without regulation. Markets are defined by a legal framework that sets minimum standards for social and economic relationships. Private property is possible because law allocates property and defines the rights of owners; property law also ensures that property rights are not exercised in ways that harm the property or personal rights of others or that undermine the fabric of social life or economic prosperity. Regulation is just another word for law and, as John Locke taught there, there is not liberty ... More

The subprime crisis teaches us that neither private property nor the free market can exist without regulation. Markets are defined by a legal framework that sets minimum standards for social and economic relationships. Private property is possible because law allocates property and defines the rights of owners; property law also ensures that property rights are not exercised in ways that harm the property or personal rights of others or that undermine the fabric of social life or economic prosperity. Regulation is just another word for law and, as John Locke taught there, there is not liberty without law. Regulation, far from taking away our freedom, is what makes it possible. There is no freedom without regulation. That means that libertarians want more regulation than we may think and that liberals like both markets and private property more than we think. The overlap in values and beliefs of liberals and conservatives is much greater than our current polarized political discourse suggests. If we reframe regulation as minimum standards for social and economic relationships in a free and democratic society, it becomes clear that the liberty we cherish is entwined with law. We therefore seek, not complete freedom of action, but democratic liberty.