"The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!" ~ Ludwig von Mises
Relieving 'Laissez-Faire Fright': Making the Free Market Less Fearsome
December 14, 2007
I would imagine that a great number of market anarchists/voluntaryists view education as the primary means of bringing about a stateless and voluntary society. It must be said, though, that there are numerous impediments coupled with this approach. Education involves making people realise that businesses should possess the right to discriminate based on any reason, or that taxation is immoral, or why all drugs should be legal. Naturally, the man in the street views such things in a distasteful fashion, given the statist brainwashing and indoctrination that nearly all people in Western society undergo. One prime obstacle associated with the educational method is explaining that the free market is not as cutthroat and fearsome as it may seem.
Too many people in contemporary society view the free market in a negative light and quite possibly even fear it. Surely as voluntaryists/market anarchists, our role should be to allay the fears of the average Joe concerning laissez-faire capitalism. In this piece, I would like to examine why everyday people feel intimidated by the free market and present some solutions in reference to making them 'see the light.'
Western Pop Culture and the free market
In all likelihood, it is true that Western pop culture tends to look down on and scorn the free market. Reasons for this include:
1 ' The Environment
Since the 1980s, there has been greater public awareness of environmental issues. This is probably attributable to the discovery of the hole in the ozone layer and the continual controversy surrounding the cause of global warming. Even still, many believe that the free market was responsible for the degradation of the environment to its present state. It must be said that 'the many' in this instance are wrong. Often, the greatest polluters are governments. In the USA , the federal government is the biggest polluter by some margin. In the former Soviet Union , the communist regime caused a great deal of environmental degradation. Free market forces did not cause Chernobyl , did they?
Environmentalists often believe large and intrusive government is the key to saving the environment. Indeed, the core of Green political ideology is that the state must play a central role in averting detrimental impacts on the environment. However, Greens generally neglect the free market as a means of aiding in protecting the environment. With the use of well-protected and defined property rights, areas of scientific importance or outstanding natural beauty can be preserved for present and future generations to enjoy.
Imagine if a private company owned Yellowstone National Park or the Grand Canyon . Would they be negligent in maintaining the upkeep of these places? It is possible that they could be. Nevertheless, the price and value of these places would depreciate if they were abused. Therefore, the owners would be at a loss when attempting to sell them to other parties. In addition, would you buy property or land which was not well maintained? Perhaps not. Think of when you have been house hunting in your lifetime and you may relate with my point.
2 ' Consumerism
Some people disapprove of the consumerist nature of Western society and attribute this to market forces. Outsiders looking into Western society, such as the Islamic world and Eastern societies, often rebuke consumerism and materialism. However, let me ask, what is consumerism? I suppose it can be defined as the constant acquisition and consumption of goods and services. Despite what some feel, this is not a damaging thing.
The continual acquisition of goods and services is central to the ideal of economic growth. As an amateur student of Austrian economics, I do not believe in economic growth, at least as is commonly portrayed in mainstream economics. Nonetheless, I can see why it exists. Economic growth exists because people naturally want to better themselves and their lots in life. This is simply part of the human condition and human nature. The free market, then, only exploits this inherent human trait, since the law of supply and demand determines the allocation of finite resources in a free market system. Thus, providers of goods and services are only creating supply to meet such demands. In essence, consumerism arises independently of the free market and not because of it.
Evidently, capitalism is not a modern-day invention. Western societies 100 years ago were capitalist, perhaps even more so than today since the size and scope of these governments was lesser than in recent times. Even still, consumerism, as is popularly portrayed in present times, did not really exist in that era. It has to be said then that capitalism per se is not the root cause of contemporary consumerism. It is rather akin to debates pertaining to gun ownership and drugs. In the 19th and early 20th centuries, gun ownership carried less of a stigma in the UK and USA , yet examples of people 'going postal' were unheard of. Similarly, drugs were widely available in that age, yet the instances of drug misuse and addiction were minimal. In short, the free market is not really a supreme evil. A large amount of things which people rebuke the free market for are probably attributable to the existence of large and invasive government.
3 ' Oppression
Occasionally, I get the impression that members of ethnic minorities in Western societies look badly on free market economics. Some black people somehow connect laissez-faire with oppression during the time of slavery. Clearly, this is false.
It is true that the economies of slave owning societies were economically freer than they are in contemporary times. Nonetheless, the institution of slavery relied heavily on state intervention. If a slave ran away from a plantation, the government would organise gangs to look out for and eventually capture the escaped slave. When the Danish administered slave plantations in the Caribbean , the governors of these locations would often impose quite inhumane punishments for escaped slaves. Such punishments were obligatory for slave owners to implement.
Britain eventually emerged as the largest slave trading country. Still, British entry into the trade did not solely originate from free market forces. In the late 17th Century, the English government (I say English since the UK was only founded in 1707) granted the Royal African Company the sole right in England to trade in slaves, hence starting English slave trading. In short, slavery was collusion between the free market and government, and not wholly a product of laissez-faire capitalism.
4 ' Rebukes from leftists
In the 19th Century, socialism and its various forms emerged in opposition to the perceived inequalities supposedly (in their view) intrinsic to capitalism. Of course, not every individual in Western societies is a socialist. Nevertheless, the influence of socialists has caused many to perceive the free market as exploiting the average Joe and only favouring wealthy 'fat cats' at the top of society. If anything, it is the presence of government that causes economic inequality. Without a welfare state that encourages and promotes dependency, poorer members of society can be free to create wealth for themselves. Governmental regulations also inhibit entrepreneurship and hence the creation of wealth in society.
The state also promotes any supposed inequality within a capitalist system. A Marxist or left-anarchist may not feel free since s/he believes that the capitalist economic system oppresses him/her. This is only true because of the collusion between state and economy that exists in all First World countries. In a voluntaryist society, companies would be free to choose any kind of structure they desired, away from any state coercion. It is possible that cooperative arrangements will become the predominant corporate organisational structure in a voluntaryist society. Ultimately, it would be up to the market to decide. In addition, those who disapprove of the free market would also be free to 'opt out' of the free market system and live in communes if they wished. This is viable because of the voluntary nature of a stateless society, as opposed to the forcible nature of government.
5 ' Greed
In general, greed is commonly viewed as a 'bad' trait, rather like laziness, hatred, vanity or spite is. Some, in relation to the free market, censure capitalism since it supposedly spawns and gives rise to greed in entrepreneurs. It has to be said that the free market is simply exploiting base human characteristics in this sense. Human beings possess the will to better themselves and their lots in life. Such an attribute can manifest itself in a number of ways. We may favour to further our own characters and personalities or seek to enhance our level of material possession. Either way, it is true that human beings tend to strive for advancement. Because of this quality, entrepreneurs within a free market system recognise the various business opportunities that present themselves in that environment, since it is in their nature to advance themselves. Ultimately, it all can be derived to the application of the human condition.
6 ' 'Cutthroat' competition
Readers of Strike The Root, as market anarchists/voluntaryists, probably take an interest in political affairs and perhaps hold some degree of economic knowledge. Still, notwithstanding that, many people in the day-to-day world do not. This, therefore, is a probable reason why numerous people object to the competitive nature of a free market. For example, in the UK , a large number of people lament the decline of localised services, such as butchers and bakers who served local communities. In modern times, most individuals buy meat and bread from big supermarkets, such as Tesco or Sainsbury's. This is the case since the larger providers are merely (and very successfully) catering to consumer desires.
It is often more convenient to purchase goods and services from these stores, than it is to obtain meat from a local butcher or bread from a nearby baker. People unacquainted with free market mechanics must realise that the consumer is king within such a system. In reality, no one has to buy goods and services from any particular business concern in a capitalist paradigm. The consumer would spend his/her hard-earned money on products that satisfied their needs and wants, whether this equates with price, quality, or reliability. If businesses or industries die in the free market, then it simply means that the demand for such industries has diminished. Few would be willing to spend money in order to produce goods or services that people did not want, or which did not satisfy the standards of consumers.
In Henry Hazlitt's classic book Economics in One Lesson, Hazlitt specified that one chief purpose of profits was for a business owner to determine how best to utilise the factors of production when creating or delivering a good or service. Thus, the owners of Tesco and Sainsbury's are employing the factors of production (i.e., land, labour, capital and entrepreneurship) in providing low prices of goods and services, a wide range of goods and services available for purchase, ample car parking space for customers, petrol (or gasoline) stations for motorists and even banking and insurance services. All of these services are being supplied to entice the consumer to spend their money at such business concerns.
Really, it is erroneous and misguided for any Western person to rebuke free market forces, especially when it was capitalism that laid the foundation of current Western prosperity. In reality, Westerners should view laissez-faire in a greater light than they presently do, for this reason alone. The West would not have become the most powerful region of the world without it. Ideally, Western people should demonstrate more gratitude to capitalism, instead of denouncing it. Britain was the first Western country to industrialise. This is attributable to the free market. At this time, government was very small in size and scope, notwithstanding the presence of the British Empire in this period. Since government was small, industries emerged without any state hindrance and coercion.
The same points can be applied to the United States . In the early 20th Century, the USA was emerging as a major world economic power due to laissez-faire capitalism. Even when Congress initially created the Federal Reserve and the income tax, the USA was beginning to rival the UK as the principal economic force in the world. In all likelihood, it can be stated that contemporary America is simply coasting on the free market wave that existed in the 19th Century.
The late, great Harry Browne wrote an article several years ago, detailing that average GDP growth in the US economy has been lower from the 1960s until now, in comparison with figures for earlier decades in the 20th Century. Browne cited the cause of this phenomenon as the growth of the US federal government in this era. The 1960s saw the initiation of the 'Great Society' programme, and thus this spawned a great expansion in the size of government. As government is force, Browne speculated that the invasive and coercive nature of government impeded the productive parts of the economy, thus lessening the average rate of economic growth.
If we analyse the world today, in its present economic state, we see that countries with freer economies are prospering. The rapid economic growth of China is occurring because of free market forces. The Chinese ruling class, led by Deng Xiaoping, realised that a command economy was not the correct path to take and thus sought to enhance the economic freedoms of their country by instituting 'socialism with Chinese characteristics.'
Amongst G8 members over the past 15 years, the 'Anglo-Saxon' economies (such as the USA and the UK ) have performed better than the more regulated models of continental Europe . Consequently, the ruling classes of countries such as France and Germany are questioning whether 'Rhenan capitalism' is really such a viable system. In short, the free market is the best means we know of securing economic prosperity and well being. The allocation of finite resources should always be left to entrepreneurs, acting in accordance with the law of supply and demand. If the free market is really such an absolute evil, why then are nation-states implementing free market principles amongst the richest, safest, and happiest states in the world?
It has to be said that people in Western society have been conditioned, as it were, to view laissez-faire capitalism in a downbeat manner. In reality though, the free market is nothing to fear at all. Think of all the things that we enjoy in everyday life. Did government invent them, or even commission their existence? I like to watch soccer and rugby union, yet the last time I checked, the state did not spawn these things. I also like to watch movies, but the government did not create cinemas, motion pictures, or cameras. Given the free market's influence in our daily lives, what is there really to be intimidated about?
Organisations in the free market are out to cater for the sum of our infinite desires. The state is only interested in maintaining dominion over your life. It is up to us, as people who oppose the legitimacy of the state, to make it known that laissez-faire capitalism is not some grand 'bogeyman.' In Western societies at least, a great quantity of items that we rely on in our daily lives we owe to free market forces.