Is the "free market" REALLY free?

[Mik]

I see now. Good points.

[vmays]

One point  regarding voting for Ds and Rs.  It's off subject but the string seems to have slowly migrated off subject anyway.

The point is this (and I keep pounding on it in every campaign):  Voting for the lesser of two evils is still voting for evil.

The general population seems to understand when you put it that way.

[vern]

If anything is lost here, I believe it goes to the issues that generated the original post.

The perceived failures of a "free market" to provide for any relief to human suffering-- hunger, disease, etc.-- is an honest criticism of capitalism.  And this criticism has been the inspiration for the Left for almost 2 centuries now, which leads to the concept of government-run everything.

The failure of conservatism to provide free-market alternatives to the Left has been the downfall of libertarian ideas in the US, from my perspective.  Rand makes this a moral argument, that altruism is the inherent evil that leads to human sacrifice, etc., and that capitalism will keep everyone alive who deserves to be alive.

I'm a staunch defender of free markets.  We are free, or we are not.  And I will agree with Rand to the extent that there is no moral excuse to justify slavery.  But conservatism isn't the answer, unless the answer is simply No.

There is a "moral" source of government funding, so don't hit me with that argument.  I don't believe in stealing anything from anyone.  But if we are NOT anarchists, or if we can evolve our ideas beyond it, then we recognize a responsibility for society to protect its members.  We do this in the name of our "rights".

In other words--- Yes, a "free market" is REALLY free, but I recognize its limits to relieve human suffering.  I can agree with a government function to preserve our lives and liberties if we can finance those functions without violating the very rights of the people we claim to protect.  I think it can be done (at least on paper).

[Mik]

The issues of human suffering can be approached form a couple different directions. Would a libertarian government choose to tackle them from the perspective of society or of the individual? Free markets deal with allocation of scarce resources, not necessarily addressing all issues, particularly moral issues, of society.

When we talk about individual choice, generally people do not choose to go hungry or become sick. What are the responses we can take if we see these problems within our society? We could act as individuals or we could have the government act to allocate resources to a specific area. Is is better for government to provide health care or is it better for individuals to choose their course of action? Is it better for government to fund medical research or private institutions? Is it better for government to provide food or for individuals to exchange for it voluntarily? 

This does not mean governments need to be completely out of the picture. Food stamps and a health care safety net have been mentioned. When we don't have free markets, like in health care today, the results can be even worse that having a fully government-run program, which is why such a program looks good to so many today. I don't think anyone would argue that government provision of everyone's food would be a good idea, because comparatively the market in food production and distribution is freer, not free, but freer.   

Are the markets really free? Generally no, some are freer than others but that is nothing that cannot be remedied with a bunch of Libertarian elected officials, or at least a bunch of elected officials who act like libertarians.

[vern]

The problem of helping the poor, etc. is simple.

If every person who thought the government should be taking care of the poor was to open their OWN damn wallet, then there would be plenty of funding to care for the poor.

Same with education...  And national defense...  And infrastructure...

But people don't want to open THEIR wallets.  They want to steal it from someone else's.

God damn hypocrites - every last one of them.

That's a great idea Klapton.  I wish I owned everything--- all the land, all the energy resources.  How did Corporations come to own everything that allows me to help myself?  If we ended all taxes TODAY, what do I have?  A tiny plot of land connected to a grid, and I need the Grid to survive.  What right does anyone have to the Allegheny National Forest?  Can I live there?  Who's gonna stop me?  That coal under Clarion County--- who owned all that?  Too late to figure all that out now, it's all gone.  Let's tear up Honduras now.  And if they don't like it, call them Socialists and shoot them.

Privatizing all human services?  When a coalition of corporations and Private Charities gets together and volunteers to resolve the horrors of poverty and disease, I'll believe that Volunteerism will work.  Meanwhile, I'm concerned about what right anybody has to, say, Wyoming, but instead forced to live within this Feudal system of land and tort laws.

.... just keepin the conversation Flavored!

[Mik]

Let's assume that the government gets all of it's revenue in a perfectly just and non-coercive manner. There is still a limited supply of funds, and potential efforts beyond the basic functions of government are virtually limitless. How much would you spend to find a cure for cancer, AIDS, eliminate hunger, remediate pollution, or care for the sick?

Guns or butter?

[vern]

That's a great question Mick.  I've never gotten that far in the conversation

The concept "balanced budget" comes to mind.  If the titanic is sinking, we're gonna lose some people, for sure.  If we're on the good ship Lolipop, I think we can do better.  As to the items you mentioned, some of that relates to Emergency Services, Defense and Infrastructure, all questions I've tried to raise looking for clues to an answer.

Honestly Mick, have you ever heard this line of argument before, even in the geolibertarian circles?  Chomsky wants state run cooperatives or something, so he's out.  Walden doesn't work, or Benjamin Tucker, or Robert Pool, or so many other writings I've come across.  Dan Sullivan had the best article I've seen since Roy Childs wrote his Open Letter to Ayn Rand way back when.  I don't have answers yet, sorry.

Hopefully I have friends though.  Klapton is a good example-- heart is definitely in the right place.  And many, many others here in the LPPa.  With rare exception I find that libertarians are good people with honest concerns, and I'm glad for the opportunity here to challenge my opinions.

[Mik]

I should have added defend the nation to the previous list so that guns or butter made sense.

Government is not subject to the same mechanisms as a free market, so any use of government beyond the basic securing of rights must be done very, very carefully. Use of government to address social needs should be a last resort, not a first step. Providing food stamps for those in need is very different from the government providing food. A basic health care safety net for those in need is very different from the government providing health care.

As we have been over, there are some cases where government action may be more justifiable than others, cases of natural monopolies, public goods, protecting the commons from negative externalities, etc. If we are going to use government to address social ills, there must be a way to measure when the influence of government is too great.

I think there are a couple ways to measure if or when the influence is too great. One is when free market is adversely impacted by the government presence, i.e. if food production were to be impacted by the use of food stamps. Another way would be an adverse reaction of social activity, i.e. if people start planning their lives around government services rather than planning to avoid the need to use them. Food stamps may be an examples of government interference in a good way, whereas farm subsidies may be an example of interference in a bad way.

Clearly people plan their lives around social security and medicare, which doesn't need to be. We have a military that is disproportionate to any threat facing us. Those would be instances where government has gone too far, and funding those things is a needless drain on the rest of society.

[vern]

I totally agree.

[Mik]

Maybe things would be better if a free market really was a place where you could get stuff for free.

[Dan Sullivan]

A free market is one that is free of privilege, not one that is free of laws and regulations. Of course, regulations that arbitrarily benefit one party to the advantage of another are privileges.

An excellent analysis of this issue is found in Henry George's classic work, Protection or Free Trade (1886), http://mises.org/etexts/freetrade.pdf, especially chapter 26, "True Free Trade."

This book is probably the definitive treatise on the illogic of protectionism, and many of the arguments free traders make today originated in this book. It's greatest flaw is that it doesn't define true free trade until chapter 26, and, although it argues quite well against protectionism, the first twenty chapters seem to be arguing for superficially free trade.

The reason for this flaw in presentation is that George and the progressives were bitterly attacked by the socialists. The socialists had lost all the other battles, and had been thrown out of the United Labor Party for their disruptive behavior. Protectionism was the only issue on which working people agreed more with the socialists than with the progressives.

Incidentally, the progressive movement grew out of the radical elements that had formed the Republican Party. They were for small government and the elimination of privilege. Their values are best captured in the motto of the Free Soil Party, the largest of the minor parties to merge into the Republican Party. That motto was, "Free Land, Free Trade, Free men." Its main planks were a right to homestead land (and opposition to massive railroad grants), an abolition of tariffs and other taxes on trade, and the abolition of slavery. They wanted none of the European paternalism that the socialists were pushing.

Anyhow, as a result of George giving the protectionists no quarter for the first 20 chapters, conservatives tend to read those chapters with great zeal and then lose interest as the book shifts to attacking privilege. Neoliberals, on the other hand, never get through the first part of the book.

I therefore advise liberals to start reading at chapter 20, and implore conservatives to finish the book and get to the deeper questions. Without doing so, the issue will never be resolved.

I also recommend this passage from Albert Jay Nock, founder and first editor of The Freeman and author of Our Enemy, The State. It captures the essential difference between a true free market and the right-wing caricature of a free market.

<sub>So long as the State stands as an impersonal mechanism which can confer an economic advantage at the mere touch of a button, men will seek by all sorts of ways to get at the button, because law-made property is acquired with less exertion than labour-made property.  It is easier to push the button and get some form of State-created monopoly like a land-title, a tariff, concession or franchise, and pocket the proceeds, than it is to accumulate the same by work.  Thus a political theory that admits any positive intervention by the State upon the individual has always this natural law to reckon with...

At the time our government was set up, a century and a half ago, some political thinkers, notably Franklin, had perceived the incidence of this law.  Their idea was that it should be no function of the State to intervene upon society's economic life in a positive way, but only negatively as occasion required, to punish fraud and to safeguard the general régime of contract.  Aside from this, the State's only function should be that of safeguarding the lives and liberties of its citizens.

Contemporary British liberalism had the same idea; it advocated a rigid policy of State abstention.  Liberalism's career was remarkable in presenting a most instructive object-lesson to those who study it in the light of natural law.  Its programme missed one point, admitted one exception; and the consequences of this imperfection forced liberalism in the end to turn squarely around on its basic principle, and become godfather to the most elaborate series of positive interventions ever conceived in England.

This imperfect policy of non-intervention, or laissez-faire, led straight to a most hideous and dreadful economic exploitation; starvation wages, slum dwelling, killing hours, pauperism, coffin-ships, child-labour -- nothing like it had ever been seen in modern times... People began to say, if this is what State abstention comes to, let us have some State intervention.

But the state had intervened; that was the whole trouble.  The State had established one monopoly, -- the landlord's monopoly of economic rent, -- thereby shutting off great hordes of people from free access to the only source of human subsistence, and driving them into factories to work for whatever Mr. Gradgrind and Mr. Bottles chose to give them.  The land of England, while by no means nearly all actually occupied, was all legally occupied; and this State-created monopoly enabled landlords to satisfied their needs and desires with little exertion or none, but it also removed the land from competition with industry in the labor market, thus creating a huge, constant and exigent labour-surplus.

Franklin saw this clearly; he used Turgôt's language almost word for word to show that the "labour-problem" qua labour-problem, really does not exist -- it is purely a problem of State intervention, State-created monopoly.  He said:

Manufactures are founded in poverty.  It is the number of poor without land in a country, and who must work for others at low wages or starve, that enables undertakers [i.e., enterprisers] to carry on a manufacture....

But no man who can have a piece of land of his own, sufficient by his labour to subsist his family in plenty, is poor enough to be a manufacturer and work for a master.

But liberalism did not see this, never saw it; and the consequence was that in the end it was forced by political necessity to sponsor and ever-lengthening, ever-widening programme of regulations, supervisions, exemptions, subsidies, pensions -- every measure of positive State interference, almost, that one could think of.

When the state has granted one privilege, its character is permanently established, and natural law does not permit it to stop with the creation of one privilege, but forces it to go on creating others.  Once admit a single positive intervention "to help business'" as our euphemism goes, and one class or group after another will accumulate political power in order to command further interventions; and these interventions will persist in force and frequency until they culminate in the decay and disappearance of the society that invokes it.

Such is the grim testimony borne by the history of six civilizations, now vanished, to the validity of the law that man tends always to satisfy his needs and desires with the least possible exertion.  We ought to be quite clear about this, as a matter of understanding the course of our present governmental policy.  Some of us incline to regard the New Deal as something out of the run of our national history and unrelated to it, whereas it is exactly what the run of our history must inevitably have led up to.

One need only shift a switch in the New York Central's yard some three inches to determine whether a train shall go to Boston or to Chicago.  We shifted the switch a hundred and fifty years ago and set the national train going toward the Chicago of hundred-per-cent Statism, with our old friend natural law furnishing abundant steam.  The new deal means merely that we are somewhere near South Bend, Indiana, and going strong; and if anyone knows how to reverse that train and head it toward Boston without an awful catastrophe, he is just the man that a good many of us would like to see.

The American state at the outset took over the British principle of giving landlords a monopoly of economic rent.  That shifted the switch; it established the State's character as a purveyor of privilege.  Then financial speculators sought a privilege, and Hamilton, with his "corrupt squadron in Congress," as Mr. Jefferson called them, arranged it.  Then bankers, then industrialists; Hamilton also arranged that.  Then, as the century went on, innumerable industrial subgroups, and subclasses of special interest, were heard from, and were accommodated.  Then farmers, artisans, ex-soldiers, promoters of public utilities, began to accumulate political power with a view toward privilege.  Now, since the advent of universal suffrage, we are seeing the curious spectacle of the "unemployed" automatically transformed into the strongest kind of pressure-group; their numerical strength and consequent voting-power compelled Mr. Roosevelt to embrace the extraordinary doctrine that the State owes its citizens a living -- an expedient little noticed at the time, I believe, but profoundly interesting to the student of historical continuity.

Moreover,... when the State confers a privilege, natural law impels the beneficiary to work it for all it is worth; and therefore the State must at once initiate a whole series of positive interventions to safeguard, control, and regulate that privilege.  A steady grist of "social" legislation must be ground; bureaus, boards and commissions must be set up, each with its elaborate mechanism; and thus bureaucracy comes into being.  As the distribution of privilege goes on, the spawning of these regulative and supervisory agencies also goes on; and the result is a continuous enhancement of State power and a progressive weakening of social power, until, as in Rome after the Antonines, social power is quite extinguished -- the individual lives, moves, and has his being only for the governmental machine, and society exists only in the service of the State.  Meanwhile, at every step in this process, natural law is pushing interested persons, groups and factions on to get clandestine control of these supervisory agencies and use them for their own advantage; and thus a rapid general corruption sets in, for which no cure has ever yet been found, and from which no recovery has ever yet been made.</sub>

_{-- Free Speech and Plain Language February 1934, "The God's Lookout," p. 320-324}

[vern]

Thanks so much for that link to the book, Dan.  Really interesting stuff.