The laugh track did emerge as the result of decisions made by private parties—entrepreneurs, entertainers, and engineers—in the pursuit of popularity and profit; no government agency imposed it on the television industry. But when advocates of free enterprise celebrate the blessings of free-market capitalism, competition, and the profit motive, we have in mind voluntary exchanges in a commercial context of secure private property, sound money, and little or no coercive regulation from the state. Recent history offers us no examples of unhampered markets, but some enterprises are certainly more hampered than others, and radio and television constitute one of the most regulated industries in the American economy.
Would the laugh track have existed in a free market? Almost certainly. But it took the uniformity imposed by the television cartel to let it dominate so thoroughly, giving artists few options within the industry—and leaving audiences little choice other than the off button.
So it was outside competition that drove back the laugh track. Artists had resisted and critics had complained, but until the networks perceived a threat to the bottom line, they stuck with the process they trusted; and until large audiences had a real alternative, they stuck with the programming of the major networks.
Contrary to the popular wisdom, the capitalist pursuit of the bottom line does not promote the lowest common denominator. Competition drives diversity (and vice versa). Cartels, like the one Hoover created in the broadcast media, create homogeneity.