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Some Common Sense about a Free Market

Submitted by Ken Watts on Fri, 10/21/2011 - 16:31

The occupiers of Wall Street, and of other public areas around our nation, are highlighting a doctrinal schism within our national soul.

Not all doctrines are religious.

There are political, and economic doctrines, too—and many of those are accepted on faith, as well.

The doctrine in question is the absolute and unquestioning belief that the only solution to any and every economic problem is the free market—by which the true believers mean a laissez faire market: a market with no government intervention.

  • If health costs are too high it’s because the market isn’t free enough.
  • If income is unfairly distributed it’s because the free market hasn’t had a chance to work.
  • If unemployment is too high, it’s because we haven’t allowed “market forces” to do their job.

Like most doctrines accepted on blind faith, this one begins to fall apart the moment it’s examined closely.

It is, in fact, impossible to have a free market, or anything resembling a modern market at all without government intervention.

The very idea of a market, and especially a Capitalist market, is rooted in a very technical, legal concept of ownership.

There is nothing the least bit natural about ownership in this sense.

Imagine yourself as one of your own ancestors—a hunter-gatherer, living in a small band of fellow hunter-gatherers who work together to make their living from the forest.

What, in this natural state, does ownership mean?

  • It might mean that you have a special right to the use of that bow and those arrows that you either crafted yourself or traded some other possession for.
  • It might mean that you have a special claim to a hut which you live in, or to the moccasins you wear.

It certainly wouldn’t mean:

  • that you had a right to keep farmers in another part of the world from planting a particular strain of wheat, or
  • that you had the right to keep anyone from living in a hut that you had never visited, miles from where you yourself lived, or
  • that you had the right to charge people you never met a fee for using an atm which you “owned”.

Most of what the word “own” currently means is a function of government regulation.

It’s government regulations, and government force, which make it possible for a bank to throw a family from their home.

It’s government law which creates the currency that all modern trade depends upon.

It’s government regulation, and government enforcement, which makes those contracts capitalists live by binding.

If trade is the warp of every modern market, government is the woof.

The entire fabric would fall to pieces if government intervention were eliminated.

So it’s really impossible to have a market free of government intervention.

But that’s only the first flaw in the “free market” cult’s world-view.

Next: The Innate Instability of "free" Markets...