It’s the 1800s all over again: Free enterprise never really existed before now

Posted on May 13, 2016 by Rick Falkvinge
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In the years 1791 to about 1850, laws were passed that abolished trade guilds as the permission-givers to run a business. But as we speak of “permissionless innovation” today, and see how these “permissionless” businesses often violate old regulations, we realize that the requirement for a permit to run a business never went away: the government just seized the permission issuance for itself.

Before so-called free enterprise laws, businesses were regulated by trade guilds. These were effectively industry associations (“guilds”) setting the rules for every business wanting to be part of a particular industry, and you had to adhere to the guild’s rules, or you would not be allowed to run a business at all. This typically meant tightly controlled prices and competition within the guild, and businesses were typically what we would call artisan today – a single person or a small family of craftspeople.

Spreading from the Chapelier Law of the French Revolution in 1791, the trade guilds were stripped of all their power, and “free enterprise” established – the freedom to run a business without asking permission to do so, freedom to compete freely, set your own prices, offer whatever service was attractive, et cetera. Or so people said, anyway. Specifically, so the government said, the governments who passed these laws. The laws gradually spread through the then-Western world, having mostly completed the abolishment of trade guilds everywhere by 1850.

This concept of “free enterprise” meant that you no longer had to do as the trade guild commanded, hand over customers to competitors as per the guild’s orders, charge per the guild’s tariffs, et cetera. On the surface, it looks good. Indeed, business flourished.

However, today, we can observe that “permissionless innovation” exists, in the sense that it’s a term that carries some sort of meaning. But if we don’t need permission in the first place to run a business and invent and compete, according to these laws, how can it be a thing to run permissionlessly?

Permissionless enterprise – free enterprise – was an illusion all along. You just needed somebody else’s permission: the government’s. Before you had it – have it – you’re not allowed to run a business. The whole “free enterprise” thing was an illusion all along.

The examples of organizations that have run permissionlessly and run afoul of something are legio – from known brands like Uber and The Pirate Bay to many, many small startups that never got as known. The common factor is that they built something without asking permission, provided a useful and popular service to a lot of people, and were labeled criminals for it.

What we can observe today is that we are still just as required to obtain permission to run a business as we were in the trade guild era. The effect of the “free enterprise” laws passed from 1791 onward was primarily that we had to ask the government’s permission for everything instead of the trade guild’s.

So with people choosing to run “permissionlessly”, we’ve finally arrived at an era of free enterprise, something governments claimed we had established in 1850 through the Western world. But today, it’s not free enterprise because we aren’t asking trade guilds for permission (as opposed to governments); today, it’s free enterprise because we’re not asking permission at all anymore. The difference is stark. Also, the governments are all up in arms about it.

This matters a lot to privacy and the free Internet.

When you’re looking at governments today, their actions all over the world are to introduce censorship, bottlenecks, traceability, surveillance, messenger liability, as well as barriers to publication, anonymity, and private correspondence. Only the excuses differ. What people in general are therefore doing – must be doing – is to protect the internet against governments. People are doing this in all forms: as private individuals, as informal networks, and as businesses.

And obviously, you’re not going to get the government’s permission to protect the Internet against the government.

Therefore, we’ve finally arrived at an era of the free enterprise. But we haven’t done so with the help of legislators. In fact, legislators are going to fight actual free enterprise in the name of their permissioned so-called “free enterprise”, which really just means a requirement to ask the government’s permission.

But as long as we don’t do that, we can still stand up the NSA, the FRA, GCHQ, and all the others who are trying to destroy privacy and other liberties. And we need to do so without asking permission. For the first time, we really do have free enterprise, and it turns out to be vital for liberty.

Privacy really is your own responsibility.

About Rick Falkvinge

Rick is Head of Privacy at Private Internet Access. He is also the founder of the first Pirate Party and is a political evangelist, traveling around Europe and the world to talk and write about ideas of a sensible information policy. Additionally, he has a tech entrepreneur background and loves good whisky and fast motorcycles.

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  1. Alec Bobmail Dumas Anon Fetty

    What works on Internet cannot work (maybe sadly) in the real world. Goverments and big corporations must recognize that now.

    4 years ago
  2. Jonny B-H

    Keep doing what you’re doing, and tell us how to get involved too.

    4 years ago
  3. Roger Ver

    “you’re not going to get the government’s permission to protect the Internet against the government.” is such a great point that most people don’t seem to realize.

    4 years ago
    1. Falkvinge

      Thanks, Roger!

      4 years ago