Conversations with Murray Rothbard: Why Do We Need Permission to Work?

Rosario has just legalized Uber and DiDi. The Council approved the new regulation by 18 votes to 10 and allowed the platforms to operate as private transportation services, without a minimum fare. But behind the discussion about apps, taxis, and licenses lies a much more fundamental question: if a passenger wants to pay a driver to take them and the driver agrees to do so, why do they need prior authorization from someone who is not part of the exchange?

This was the topic I “discussed” again with Murray Rothbard. Because for him, the market was not primarily a place or an institution designed by the government. It was a network of voluntary exchanges between people.

—Professor Rothbard, Rosario has just legalized Uber and DiDi. Is this good news?

—I would start by asking why they were prohibited. We have a passenger who wants to travel, a driver willing to take them, and a price that both agree on. Who is being forced to participate?

—No one. But transporting passengers can affect their safety.

—Then punish those who deceive, breach a contract, or harm another person. That is different from assuming that every person is incapable of providing a service until the government authorizes them.

—What is the difference?

—One thing is to hold someone accountable for the harm they cause. Another is to prohibit them from engaging in a peaceful activity unless they obtain permission first.

—But licenses can also guarantee certain standards.

—They can set requirements. The question is who should decide those standards. In “Man, Economy, and State with Power and Market,” I explained that free competition means free entry: anyone should be able to produce in the field they choose and buy, sell, and transform their property without coercive interference.

—And how does the passenger know if they can trust the driver?

—As they make countless decisions in the market: information, reputation, experience, and competition. The platforms have also added mechanisms that were previously much more costly: driver identity, trip records, and ratings from other users.

—Their critics would say that the consumer can make mistakes.

—Naturally. A public official determining who is authorized can also make mistakes. The difference is that in the market, different consumers can choose different providers and different criteria. Mandatory regulation replaces those decisions with a single political decision.

—But traditional taxis had to comply for years with requirements that the apps did not meet. Wouldn’t that be unfair competition?

—If an activity is burdened with unnecessary restrictions, the solution is not to impose them on the new competitor as well. It is to ask which of those restrictions should be eliminated.

—So the problem goes far beyond Uber.

—Of course. In “Man, Economy, and State with Power and Market,” I distinguished two fundamental forms of social relationship: voluntary and coercive. When two people peacefully engage in an exchange, the market principle operates. When a third party uses force to prevent or condition it, we have introduced the coercive principle.

—Does that mean anyone should be able to do any job without any responsibility?

—No. Freedom does not mean immunity from fraud, breach of contract, or harm caused to others. It means that the absence of a state permit does not by itself make a peaceful activity illegitimate.

—What would then be the question left by the case of Rosario?

—Before asking what requirements the government should impose to allow us to work, I would ask something simpler: if two adults want to voluntarily engage in an exchange that does not harm anyone, why should they need permission from a third party?

—Thank you very much, professor. We’ll continue next week.