Amidst all the gnashing of teeth and stomping of feet from American conservatives and morons, it's good to see a most sensible (and conservative) offering on health care reform and Sunday's vote.

I've been thinking recently about the often interchangeable use of the terms 'pro-market' and 'pro-business', which are not at all the same thing. For sure, the genius of enterprise driven by market incentives is undoubtedly a good thing, far more efficient than any socially planned direction of resources. But we need to remember that firms are ways of organising labour and capital away from the market. The market essentially starts where the firm ends. Within a firm, plenty of activities go on that could also take place in a market place. For example, instead of the creation of careers, with rules about promotion prospects and pay scales, labour could be hired on a day-to-day basis from the competitive job market, in the same way other inputs into production are bought as and when needed. The reason that firms internalise market processes is for reasons of cost reduction and profit maximisation, given a certain degree of foresight.

But in the same way that the relatively benign idea of creating careers reduces competition in the labour market for certain jobs, firms can reduce competition in other ways for the same goals of increasing profits. There are a whole raft of anti-competitive practices which firms may (and frequently do) engaged in, from legal ones, such as mergers and acquisitions (which replaces a market relationshiop between a supplier and a firm with a relationship that now takes places inside of the firm) to illegal ones, such as price-fixing (agreements between firms to rise prices about the 'market' prices) and predatory pricing (where large, cash-rich firms lower prices for a while to force smaller weaker firms out of the market). The point is, doing these things are in the interest of business. They lead to higher profits. Also, they are generally less immediately costly than other forms of activity which may create profits and benefit society (such as innovating new products or production processes).

So there is a difference between wanting to remove regulations which may stop markets working well and competition being impeded and wanting to remove regulations which impede business, because often, such regulations make competition and markets function better, not worse. Remember that, next time someone talks about a pro-business agenda.