Science fiction writer David Brin wrote recently society works best when there is competition—competition in the marketplace to make the best products at the lowest price, competition in elections to see which politician can best serve the aims of the public, competition between scientists to make new discoveries and argue for new theories, and competition between lawyers to make sure all sides of a case get a fair hearing.
That is a great ideal. The problem is to make it work as intended.
A society such as he describes is something new in history. Most complex civilizations in history were organized from the top down—with government monopolies, hereditary monarchs, religion (or political) dogma and no such thing as impartial law.
Jonathan Rauch in his 1992 book, The Outnation: A Search for the Soul of Modern Japan, noted the contrast between the USA and hierarchical Japan:
It was [John] Locke, followed by Adam Smith and others, who first built the theory of liberal social mechanisms – public processes, like voting or trading or performing experiments, in which no one gets special personal authority (no kings, no dictators, no high priests or oracles) and no one in particular gets to control the outcome. In the liberal scheme of things, no matter who you are, your vote is just a vote, your dollar is just a dollar, and your experiment had better work when anyone else tries it. Moreover, there is no last election, last trade, or last hypothesis. America is John Locke’s country.
The problem is how to create the conditions in which competition works for the benefit of society. As Brin noted, the kind of competition he described can take place only within a legal governmental framework that gives protection against fraud and force. To say that rules and regulations are incompatible with the free market is the same as saying that referees are incompatible with basketball.
Rules and regulations do not work unless a majority are willing to obey them. Unenforceable laws are not merely useless, they are harmful. Laws are no substitute for a basic ethic of honesty and fair play.