In Defense of the Free Market

Recently I saw an interesting post about the Occupy Wall Street protests I saw. I have had mixed feelings about this movement. I was initially excited about a potential awakening of the masses where the government propped banks would finally be allowed to fail, the Federal Reserve System held accountable, and the people of our nation to finally have a chance to reverse the behemoth Statist tendencies of our government. To my dismay, it seems there is a majority of folks, according to the article, that have strong feelings about fixing these problems by encouraging more government. I decided to post this article on Google+ with this comment:

Strange, I wasn’t expecting this level of socialist/collectivist rhetoric from the #OWS folks. Or perhaps it’s always been there and I missed it? I was hoping it wouldn’t go this route.

A friend of mine replied with the following comment which immediately received praise. As a Austrian-Libertarian I accept that my views are generally less popular. Here it is:

Last time I checked we live in a socialist collective, I pay taxes that go to things I disagree with but I pay them because they also go towards things I do agree with. And if the government is so inept at its business how can it be said to be responsible for failure to regulate the unchecked greed of banks and corporations. An unregulated free market in it’s purest form would degenerate into a single corporation that controlled everything. Moderate regulation by non corporate entities is the only thing that allows us to harness the innate greed and self centered nature of humans in general for the overall progress of mankind. It’s not an all or nothing proposition. You can have a well regulated free market (with its bust and boom cycle) and still have an overall trend of prosperity and order. And yet it’s still OK to show compassion and love for your fellow man. To aid the sick, poor, and elderly is not communism it is altruism. To care about those less fortunate in hard times is not class warfare but empathy. All of these concepts can coexist together and people with such disparate world views can live together and benefit from that difference. E Pluribus Unum, more than just describing the original colonies forming one nation, better describes the people of the United States and their collection of ideas. Should there be a day when we all see things the same way we shall be a lesser nation for it. And should there ever be a day when people are not encouraged to express themselves freely we will cease to be United. It is not hard to wade in to a crowd of a thousand people and find a few people saying something you disagree with. Guilt by association has become a popular weapon but a system of economic checks and balances is not Marxism. And even if you disagree with the unwashed masses economic preferences it is unwise to disregard those who feel they have been wronged. Perception is reality.

Well written and I applaud any desire to discuss. I was somewhat irked by the accusation that I was somehow disregarding those who felt they have been wronged. If anything, I am fascinated and deeply invested in understanding the current economic, political, and social climates. In all fairness, though, I think my original comment may have come off a little dismissive – which it was. As I mentioned, I was disappointed that a seeming majority of folks joining this movement were, essentially, clueless. All the hatred the Tea Party received for advocating similar ideas (a desire to change a broken system of corporate and government symbiosis) but I would wager that most folks in this camp would be dismissive of the Tea Party folks even before it was co-opted by neo-cons, fascists, and other big government folks.

I thought about it for a while and replied with this:

You are using a different context for socialism and collectivism. At some rudimentary level we band together and taxes are imposed to achieve some majority decided goal. Yes, this is a social behavior. In the political context, though, this definition circumvents the nature of those realities. It is true that regardless of political system taxes are extracted from the populus to achieve some aim (except for some rare examples). However, under which pretext does it pertain? Do we assume that we offer strong individual sovereignty and allow communities and organization to thrive and create their own safety nets by order of voluntary arrangement? Or do we take the coercive nature of the State and impose this universally? Which is more efficient? Which is more adaptive to localities, cultures, ethnicities, etc? I believe the former. I would wager most others believe the latter. Regardless, I feel like we generally know what is meant by socialism/collectivism.

Government truly is so inept at its business. It constantly fails at delivering on the good intentions of a few (read some F. Bastiat). We cannot legislate away crime or gravity. We cannot legislate our way into prosperity and unselfishness. That really is the crux of it all. The two sides to this discussion agree there are problems. One side thinks government can solve everything and anything or at least accomplish most of its aims in time. The other side accepts that humanity comes with positive and negative traits and sets up a level playing field. However, how can we argue about the evils of men and then preach the merits of State control when it is composed of men?! Curious cartoon from 1912 (e).

I do not see any historical examples of this statement (unregulated free market becomes one world corporation) except in dystopian science fiction. Every time any large corporation (b) comes to dominate a particular sector it has consistently been devoured by its greed and the subsequent free market reaction in competition even before governments enacted laws regulating markets. The fact is that we see countless examples of the opposite.

Believing that non-corporate entities are the only thing that allows us to regulate greed and/or self-centered nature of humanity is contrived we can only achieve in our dreams. What you describe is fascism (c) (but really, all these isms all come from this notion that the State and its machinations are superior to the will and intentions of the individual. This may be true in some cases but this is a truth we simply have to accept). I will argue that the best “overall progress of mankind” is done by free individuals and free markets not by the “good” intentions of corrupt few. Contrary to what I think is popular belief, it was free markets (before the current bankster bastardization) that ended child labor (k).

A well regulated free market is an oxymoron. Government regulation, central banks, cartelized and subsidized monopolies are the primary reason for boom and bust cycles. Managed economies do not create prosperity or order. I can say that environmental issues, product safety; on and on – are accomplished through a strong enforcement of property rights. Business must be allowed to profit and fail. A free market is actually why we have the luxuries we enjoy today. Unfortunately, there has been a trend to slowly turn the markets to more State control which is the reasons for higher costs in health care and other social programs.

Aiding the less fortunate by means of coercion is not altruism (it shocks me that was even being suggested). It is great to show compassion and love to our fellows. It is a contradiction to assert that humanity is greedy and self-natured but then go on to insist legislators and bureaucrats will then best take and then redistribute help. However, throughout history we see countless non-profit organizations and people coming together and creating lodges (a), drives, and countless hours rebuilding and assisting those in need without the need for an official to make those decisions for us. I can go on and on giving examples of pre FEMA disaster relief through the like of the Red Cross, churches, and countless individuals.

Concepts can coexist surely and most definitely we would not want to be a nation of people who all believe and act the same. This is paramount to a free society. And in celebration I offer my criticisms of crowds of people who lack understanding of the murderous regimes of Stalin, Che, Mao, Pol Pot, and others which are flaunted by Marxist literature and cheers to the notion that Marx was correct in predicting capitalism’s failure. It is curious that our current economic system more closely resembles a fascism in its oligarchical leanings – some would call this crony capitalism. So yes, of course, we will have opposing and differing views.

To question the motives and ideologies of a movement especially when there are those that feel they have been wronged is essential. Countless times have we seen numerous legislations passed where simply the naming is used to evoke an emotional response (eg No Child Left Behind Act, P.A.T.R.I.O.T Act, ad naseum). It seems misinformation is rampant (f)(g) in this “less fortunate victims” but I would argue that although, again, we agree there is a problem the solutions are many. The mainstream media (such as Huff Post, NYT, CNN) started by barely reporting on these developments and as they have garnered more attention I feel we should be discussing things and hopefully coming to a set of actions that will truly benefit all of us rather than the few in power. I think things like the potentially brewing war with Iran(j), the pushing of the supra-sovereign financial market sales tax (i), and shift more debt on the tax payers (h). The last is truly the most disturbing as it pertains to our economic crisis. However, most folks are ambivalent to the facts or simply ignorant. I hope to remove the dust from the history books and start dialog.
To me it is frightening how a few economically disparaged few are beginning the scape goating of a minority. It reminds me of the Weimar Republic’s drive to print its way through war debt reparations which had horribly devastating repercussions on the global economy. However, that money printing was ignored. Instead, the bankers and business owners of a certain ethnicity were targeted.

I know my views are less popular so I’ve sprinkled some links from sites I frequent to back me up. Thanks.

(a) http://freenation.org/a/f12l3.html
(b) http://lewrockwell.com/woods/woods175.html
(c) http://www.lewrockwell.com/gregory/gregory239.html
(d) http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2011/09/Fed%20octopus.jpg
(e) http://www.facebook.com/photo.php?fbid=10150420351170802&set=a.10150140832250802.332879.207770190801&type=1&theater
(f) http://reason.com/blog/2011/10/18/poll-49-of-occupy-wall-street
(g) http://www.economicpolicyjournal.com/2011/10/are-clueless-occupy-wall-street.html
(h) http://www.zerohedge.com/contributed/federal-reserve-and-bank-america-initiate-coup-dump-hundreds-billions-dollars-losses-ame
(i) http://www.businessweek.com/news/2011-10-15/merkel-says-won-t-accept-u-s-balking-at-finance-transaction-tax.html
(j) http://theweek.com/article/index/220402/is-the-us-headed-for-war-with-iran
(k) http://atlanticsentinel.com/2011/01/did-government-end-child-labor/

Later another person hopped in. The praise was for the first poster but I was happy to see activity and discussion. In this second instance it seemed our biggest disagreement came regarding any notion of wealth redistribution (which includes any after basic tax collection to run essentials to subsidize business, folks, foreign aid, etc.). Eventually the question boiled down to this:

 Oh, I would definitely never suggest that wealth be redistributed; that would be completely ignoring the cause of the problem, not to mention a flagrant offense to personal freedom. That being said, all citizens should share a portion of the cost of running this country, which some of those rich “minority” guys are really effectively dodging.

I certainly think there should be a basic standard of living (including the things I mentioned) that should be obtainable by the average citizen, even those of us not gifted with intelligence and ambition. If the average member of any society can not provide those basic necessities for himself (healthcare to keep him from being sick, leave to enjoy life, and retirement to provide for himself when he is physically unable to), then that society is failing. Good health should not be reserved for those of extraordinary talent; a week to spend with your family should not be a reward for prodigy.

We can all see why the average citizen can not meet these standards; when you get hired at a company like Wal-mart, you get hired part time, with no benefits, no healthcare, no recourse. When the majority of jobs available to those without an exorbitantly priced education are provided by corporations like that what does the average man do?

To which I happily replied with this:

There is a massive correlation between the bankers and the Federal Reserve System which is a banking cartel which has access to print unlimited amounts of “money”. So, if your bank is in trouble, where do you get more money? Well, from your friends that control the output of the U.S. Treasury: The Federal Reserve. My point is that if this didn’t exist (the capacity to make up infinite amounts of money), then there would be a healthy does of “moral hazard” implied within the system. Banks would take less risk. Corporations would make less “money” and salaries/profits would be reasonable. Then the millionaires wouldn’t seem like they’re getting away with robbery (which in our opinion they are). In one of the articles I pointed out how BofA is dumping trillions of debt into federally insured holding companies. The Fed is encouraging this. What it means, in short, is that once again (as with TARP), you, I, everyone, and our kids will be saddled with debt payments to cover this theft. Their shares will go up in value, they make bonuses, and the treasury delivers a truck full of “money” to their vault so they can pay themselves out. It is simply outrageous. But see, the entire thing is government regulated and the Federal Reserve, although privately owned, is closely managed by the government. Why would the government want to audit or shut down its limitless credit on which we are making payments?

I am totally not facetious when I ask this, but I wonder how much of our belief that life would be teh suck before government came and rescued the world with Wilson (Fed and League) and FDR (New Deal, SS, etc) and the other cronies is propaganda programming delivered in State sponsored educational institutions. The wages, labor conditions, standard of living were highest in the world during largely unregulated business. Child labor vanished because children no longer had to work to help the family. Mothers started staying home. I think the climax was probably in the 1950s with a single earner with two kids and a spouse at home. Highest living standards in the world in a largely unregulated business environment where would money was based on a partial gold standard which prevented un-controlled spending and risk taking.

What about WW2, you ask? Most Keynesians (a la Paul Krugman from NYT) would have you believe that WW2 was a massive injection of labor and when it ended we would enter another depression with all that excess man power entering the work force. Did that happen? Heck no! People got busy. Had babies. Invented shit. Used all that time not blowing each other up rebuilding and manufacturing. The point is that the popular views in government support itself. The answer is that unregulated business was the norm for about a century and somehow we’ve been trained to believe that without government control it’d all come crashing down into 18 hour days in coal mines 8 days a week. The reason we had increasing standards of living is because people were free to innovate, make mistakes and fail, profit, expand, and work out problems that made them and the market lean money making machines giving everyone a chance in the nation a chance to try their hand.

I also listed a link to the idea of fraternities and lodges pre AMA days. People, free of government regulation, got together and created their own insurance programs for the community taking care of one another. Health care was less expansive even half a century ago and non-profit hospitals took in less fortunate folks and helped them. Why is healthcare more expensive (I rarely see people ask this question, only how to pay for it)? Series of regulations and cartlizations making market competition impossible. Bring on medicare and suddenly you have folks upping their premiums and costs to absorb the “free” government money. But, if you look at the number when something like Medicare was passed, it was hardly popular (something like 28% in a Gallup poll supported it circa 1962 [Washington Post]). Was it necessary? Was LBJ simply horribly unpopular and wanted to boost his numbers? Why was it passed then? Similar story goes for Social Security. On the former I’d look at the AMA’s heavy involvement with the insurance regulators.

Anyway, I’m not an economist. I am studying a lot of this stuff because it intrigues me. I have an obvious Libertarian slant which drives some nuts (looks at Dane). Thanks for joining. This is great!

It was a worth while exchange where I got a chance to share my thoughts and ideas about government, politics, economics, and philosophy. I have room to grow and learn. It is hard to discuss this sort of stuff without folks getting upset, I think. From what I’ve seen I think a vast majority of folks agree there are problem with our current broken system. However, I hope that with some of my posts here and there, articles shared, and stickers placed I can rub some of the thoughts regarding liberty around. Question everything. Second guess media. Second guess organizations. Don’t believe me. Do your own research. Discuss respectfully.

I try and give references whenever I can. Sometimes they sort of gravitate from a few particular sites I follow. This isn’t mainstream which may or may not be good. My father always said “go with the current like fish in a river”. His conservative view points in the presence of the supreme Communist State make sense. I hope that I can be one small piece to help avert an Orwellian existence for our future generations. I hope that one day if it ever comes to that I can be counted with those that sought truth.

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2 Responses to In Defense of the Free Market

  1. Crystal says:

    Your comments are not only intelligent, but they are considerate of others and full of humility. I applaud you for your tireless effort to educate those around us that mean well, but have no real understanding of the truly intricate workings of these kinds of economic issues. I think you’re missing a calling as an economist! This world would severely benefit from your voice.

  2. Evelyn says:

    Michael, I am so proud to know you and read what you have to say. I especially like the idea( which was at one time was fact) of families and communities helping each other. I remember theses times. It makes me sad to see now that people, young people, depend on government to hand them things and they expect it. We need to teach young ones to be compassionate, but learn how to do things on their own, to be compassionate in their lives also and to help when needed not when mandated. Sympathy, empathy and compassion.