Free markets


The term “free market” is misleading. It sounds like good old American liberty, but what it really means is a market without any rules, regulations, or consumer protections. It’s like a highway system with no speed limits, no lane markings, and no laws against running over pedestrians and bicyclists. Hey, it’s a free highway: if you got run over, it’s your own fault for being in the wrong place.

“Free,” in this context, means the biggest, most heavily-armored vehicles can drive however they like without regard for how much damage they do to everyone else. Kind of like how the too-big-to-fail banks caused a catastrophic economic crisis under George W. Bush, and were “punished” by having to haul away billions of taxpayer dollars in bailout money. But it’s not a perfect analogy. For the free highway to be more like the free market, the really big road monsters would have to get free armor and fuel at taxpayer expense, so they could continue to dominate the highways (and any territory in between the highways, if it happened to be a convenient shortcut).

“Free markets” aren’t free. Someone is paying for them, either directly in the form of government subsidies and bailouts, or indirectly, in the form of the burdens imposed on the general public by the fiscal irresponsibility of the free market profiteers. It is, in fact, the exact opposite of the ideals of what “American liberty” is supposed to represent.

So you’ll forgive me if I’m unimpressed by the supposedly magical powers a “free” market is supposed to have. Highway safety laws not only protect drivers from each other, they also make it more efficient to get from one place to another, precisely because the restrictions help prevent drivers from plowing into each other and causing traffic-snarling pileups. Just like the economy runs better when financial regulations prevent greedy bankers from causing economic collapse for personal gain.

Comments

  1. says

    OK, I’ll fess up that I work in highway maintenance.

    Anywhere you find an otherwise excellent stretch of carriageway/road surface incongruously torn up, you will find the likes of a BMW X5/6 , Merc 63 or Range Rover parked on the adjoining drive way.

    Heavy 4 wheel drive cars in low gears are murder for road surfaces.

    In the UK they pay a higher but not proportionately higher road duty, but our local community taxes pay for the repairs.

    Their owners are usually the first to phone in a complaint about the inexplicable “dangerous”* potholes outside their houses.

    *read “unsightly and inconvenient”

    Rant over šŸ™‚

      • Numenaster says

        I would bet that in a residential neighborhood it’s reversed, since semis don’t go through them at all and delivery trucks are occasional. And it’s residential neighborhoods that Danny was talking about.

  2. CJO, egregious by any standard says

    Functioning markets are never “free” in the propagandistic way the right uses that term. They are instruments of the state. Markets have always been instruments of states. They may have ancillary benefits for the participants and the citizenry at large, and these are what “free market” advocates in modern times extoll as their virtues, but their essential function is to concentrate resources and/or* liquid currency in sufficient local concentrations to feed, equip, and pay armies. Given that, it’s interesting to note that the rise of the “global market” has been mirrored by the global reach of the US military.

    *They predate money by a few thousand years

    • Nick Gotts says

      How are you defining “market”? Are you saying there are no markets in non-state social systems?

  3. lorn says

    Regulations are typically not so much about keeping businesses from running into each other so much as letting people know what is expected of them. Knowing what is expected of the business, and what is expected from th customer, is a huge benefit because it lends a certain amount of predictability to the process. Businessmen love predictability.

    A pet peeve of mine is when “free markets” are linked to “capitalism”, as in free market capitalism, as if this was one thing and internally consistent. The two concepts are not consistent.

  4. bmiller says

    Regulations are ALSO about establishing barriers to entry for new firms to enter a market segment. Even if they do have important other purposes, regulatory capture is an inevitable part of any system.

    Thank Goodness the State of California protects me, the consumer, from the perils of unregulated hair salons!

      • John Morales says

        More abstractly, the difference between (a) enterprises being motivated to avoid certain practices because they may lead to loss of custom or lawsuits that cost more than the profit gained and (b) being motivated to avoid those practices because they are lawfully proscribed is significant.

        It seems perverse to me for public policy to aspire to (a) rather than to (b).

        (It helps the few profit at the expense of the many, so it’s got that going for it)

      • John Morales says

        Addendum: From a purely monetary perspective, lawsuits that cost less than the profit gained are just part of the overhead.

  5. 3kramer says

    I’m a little late, but thanks anyway for this post. I think this falls very much within free thought an would like to see more clear writing on “economic” matters. In fact you could argue that economic injustice is the root cause of both religion and the patriarchy. Or at least the (mostly) men who crave ever more wealth have always used the patriarchy to divide hearts and religion to conquer minds. “Economics” is also rife with fallacies and bias that could be blown away by free thought. More posts about this please.

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