Political words get thrown around until they mean nothing. Here is what they mean, in plain English, with real examples from WA and Australia. We describe each idea fairly, then show how it works out in practice. If you think we got one wrong, tell us.
Jump to: Capitalism | Crony capitalism | Regulatory capture | Neoliberalism | Libertarianism | Classical liberalism | Non-aggression principle | Socialism | Mixed economy | Nanny state
Capitalism (free markets)
People own property and trade with each other by choice. Prices come from buyers and sellers, not from a minister. Businesses that serve customers well grow; ones that don’t, shrink or close. Nobody is forced to buy, sell or work for anyone in particular.
WA example: Until 2012, larger Perth shops were banned from opening on Sundays. From 26 August 2012 they were allowed to open 11am to 5pm, and opening stayed each shop’s own choice. (WA Government, 2012)
Crony capitalism (corporatism)
Businesses get ahead by being close to government rather than by serving customers. Think bailouts, special deals, grants to friends and rules written to suit insiders. It is often blamed on free markets, but it is the opposite: the government picks winners and the taxpayer carries the risk.
WA example: In the 1980s “WA Inc” era, the state government became deeply involved in private business deals, including support for the rescue of the merchant bank Rothwells. A Royal Commission examined those dealings and reported in 1992. (Royal Commission into Commercial Activities of Government reports (1992), AustLII)
The cost to you: in a February 1995 media statement, the Court Government released State Treasury figures putting the losses from WA Inc dealings at over $1,515 million, which it said had cost each WA family at least $3,540. That did not include the $30 million cost of the Royal Commission itself. (WA Government media statement, 5 February 1995) When government plays business with public money, the public pays for the losses.
Regulatory capture
When a regulator ends up serving the industry it is meant to oversee. Big existing firms can afford the lawyers and lobbyists, so the rules drift towards protecting them and keeping newcomers out. The result is higher prices and less choice for everyone else.
Australian example: pharmacy location and ownership rules limit where a new chemist can open and who can own one. The Productivity Commission has said these restrictions “are clearly more about protecting the vested interests of incumbent pharmacists than about promoting consumers’ interests”. (Productivity Commission, Efficiency in Health, 2015)
WA example: for 70 years, the WA Government restricted competition in the potato market through the Potato Marketing Corporation, and WA was the last state with a regulated potato industry. (WA Government, 2016) The state’s own Economic Regulation Authority recommended scrapping it, expecting lower prices and more choice for consumers. (Economic Regulation Authority, Microeconomic Reform Inquiry Final Report, 2014) Ending it still cost taxpayers a $14 million adjustment package for growers. (WA Government, 2016)
Neoliberalism
A label, mostly used by critics and often as a catch-all, for the market reforms of the 1980s and 1990s: floating the dollar, selling government businesses, cutting tariffs and contracting out services. People use it to mean very different things, so it often confuses more than it explains. Used loosely, it lets critics blame “markets” for problems that government made. Its defenders credit those reforms with decades of Australian growth.
How it differs from libertarianism: those reforms were run by governments that kept tax, spending and regulation high, and often swapped a public monopoly for a protected private one. Libertarians want smaller government and open competition, not just a change of owner.
Libertarianism
The idea that you own your life. Adults should be free to live, work, trade and speak as they choose, as long as they don’t harm others or take their stuff. Government should be small, do a few things well, and leave the rest to people, families, businesses and community groups.
Why it works: nobody knows your life better than you do. When people keep what they earn and make their own choices, they solve problems faster and closer to home than any department in Perth or Canberra can. Freedom isn’t a gamble on human nature; it is respect for it.
Classical liberalism
The older tradition libertarianism grew from: free speech, the rule of law, property rights, free trade and limits on government power. In Australia, “liberal” still carries some of this meaning, though parties using the name don’t always follow it. Libertarians see themselves as carrying that tradition in full.
Non-aggression principle
No one should start force or fraud against another person or their property. Defending yourself is fine; starting it is not. Libertarians apply the same rule to governments: a law is backed by force, so it should have a very good reason. Most people already live by this rule every day. We simply ask the government to live by it too.
Socialism
The idea that the community, usually through the state, should own or control the main means of production and share out what is made. Its supporters say it means fairness and an end to exploitation; many today mean democratic socialism, with big public services inside a market economy.
The record: whoever controls production controls people, and central planners can’t know what millions of people want. Venezuela shows what happens when the state runs the economy and runs it badly. The IMF says “economic mismanagement accelerated and amplified” a collapse in which real GDP shrank by more than 75 percent between 2013 and 2021, “the single largest economic collapse for a non-conflict country in almost half a century”. About 7 million people, 23 percent of the population, had left by August 2022. (IMF, 2022)
The better way: Libertarians argue that free exchange lifts living standards without anyone being forced. Even the World Bank and WTO, hardly libertarian outfits, found that “the expansion of international trade has been essential to development and poverty reduction.” (World Bank and WTO, 2015) And the free-market Fraser Institute’s Economic Freedom of the World index finds that in the freest quarter of countries, average incomes are 6.9 times higher and people live 14 years longer than in the least free quarter. (Fraser Institute, Economic Freedom of the World: 2026 Annual Report)
The mixed economy (what Australia actually is)
Australia is not a free market. It is a mix of private business with heavy government spending, tax and regulation.
- Commonwealth government payments were forecast at 26.9% of GDP for 2025–26 (MYEFO), before counting state and local government. (MYEFO 2025–26)
- The number of Commonwealth Acts and legislative instruments grew from 3,974 in 2000 to about 9,600 in 2024. (AICD / Mandala, 2025)
- The Productivity Commission says the “ever-growing thicket of rules and regulations” is “significantly limiting productivity growth”, and has recommended reforms targeting a $10bn cut in regulatory burden. (PC interim report; PC final report)
So when someone blames “the free market” for a problem, it is worth asking: which free market? The more of the economy government runs, the less sense it makes to blame freedom for what goes wrong. Every dollar government spends is a dollar someone earned, and every new rule is a cost that small businesses and families carry first.
Nanny state
When government treats adults like children, making choices for them about what they eat, drink, buy, or when they can shop, “for their own good”. The costs land on ordinary people: higher prices, less choice, and fines for doing things that harm no one.
WA example: Outside Perth, the default rule is still that larger general retail shops must close on Sundays and public holidays. Towns have to apply to the State for approval to trade longer, and many have. Why should a family in a country town need the State’s say-so to buy groceries on a Sunday? (Consumer Protection WA: Retail trading hours; Consumer Protection WA: Regional trading hours variations)
The better way
Freedom works, and it is fairer. Fewer rules, written plainly. Spending that has to justify itself. No special deals for the well connected. And trust in adults to run their own lives.