"Why have conservatives been in favor of free markets historically? And I would posit the following:
The critical argument behind free markets is that markets devolve decisionmaking to the people closest to the activities involved, and those people have the most knowledge and understanding of what they are doing. The closer you are to what you are dealing with, the more likely you are to know what you are doing. And the further away you are from those particular interactions on the ground, the more likely you are to get it wrong.
And so conservatism in the 20th century had a very powerful critique, from Hayek to Oakeshott, of the insanity of governments and of central authorities dictating to large, complex, organic, dynamic groups of people what was the right way to order their economies or societies.
Why? Because one individual, one expert, is often wrong. Not only that; when people become certain that they are right, they can create great damage to the fabric of society. This was the essence of Burke’s critique of the French Revolution: You are messing with things you do not understand. French society is too complex for one human mind, however brilliant, to master.
Michael Oakeshott had a great metaphor for this particular issue. He called it governing by the book. When Oakeshott spoke of “the book,” he was speaking primarily of the 1940s, ‘50s, and ‘60s, of the great era of liberal triumphalism: We have figured it all out. We know how to make society wealthy. We will abolish poverty. We will be rid of war. We have figured it all out at Harvard, and we are just going to implement it all upon the world.
Oakeshott said no at a time when it was very unpopular and difficult to say no. But he said no for a very simple and powerful purpose. He said: If you are governing a society by a book, and you are actually having to govern as you are reading and understanding and writing that book, every now and again you are going to have to look up from the book just to make sure that people are behaving according to plan. And very soon after you have written that book and you have your idea of what the world should be like, you will look up and realize there are people misbehaving. They are not following the rules in the book. If you are going to govern them, you are going to have to keep looking up from the book just to keep them all in line. And eventually you are going to be looking up from the book so often that there will come a moment when you will have to close the book."