Monday, June 8, 2015
Oh That Free Market
Why bother to write about the "free market" you may ask? I do this for your own good, so that my peers and other colleagues can have the benefit of my experience and knowledge whether they appreciate it or not, and perhaps rise above their circumstances to which an unkind fate has condemned them.
The nominal reason that I have written these recent posts about the "free market" is that they are a part of a discussion with a friend about how society should set social policies, particularly involving unemployment caused by foreign Government subsidies. He believes that the "free market" sets the best policies in all cases. A central point of discussion in this discussion is what is a "free market". He contends that a "free market" includes obvious laws and morality involving such things as racism, sexism, child labor, the environment, minimum wage and so forth.
But it doesn't, either historically or currently. Being compelled to follow standards of morality or laws against certain kinds of behavior is, by definition, constraining the "free market". It is therefore no longer "free". It is actually much worse than that because those who advocate some rather heinous social policies routinely invoke the holy free market to justify those policies.
The very term "free market" means to let market forces set policy on issues that involve society, commerce and employment. It means that any education you have is bought on the free market by individuals or groups from companies that provide that service. Those who can not afford that service do not get education. It means you do not have a legal minimum wage, because the market will set a minimum wage. It means you do not need laws against sexism because market forces will eliminate sexism because it is inefficient. It means you do not need child labor laws because market forces will prevent the abuse of children in the workplace. It means that health care is provided by industry and those who can afford it get it, and those who can not afford it suffer because they can not afford to buy those services on the "free market:". That is what the "free market" means.
In other words, the "free market" has an implied morality and that morality is nothing more or less than those with the money get what they want and those without do not.
A modified free market, a market that is informed by and controlled with a variety of laws to restrict the abuse of children or outlaw sexism or racism or protect the environment is not, technically speaking, a "free market". It is a form of market, yes, but not one that is run by pure market forces. Furthermore, since the "free market", left to itself, has been shown to lead to many disagreeable results, or at least disagreeable to some of us, those who advocate an untrammeled free market do so as a way of achieving their policy goals in these areas. They use the "free market" as the theoretical justification for rolling back policies or laws claiming it is more efficient and leads to a more productive and fair society.
The result is that the term "free market" has become associated with policies that will mean the degradation of the poor, the disenfranchisement of labor, the willful destruction of the environment, and the restriction of access to the political and justice systems to the wealthy. Whether that is what the "free market" meant at the time the term was invented or not, these are the implications of the term as used by political groups today.
Recall also that when the term "free market" was invented as an economic philosophy, there was not a body of experience that could readily say "this is what we tried and this is what happened". But we do have that experience today to make these judgments.
The pure "free market" has no innate sense of morality beyond the morality of cash. But society's own perception of what is moral and what is allowable in a free society is a moving target and changes, sometimes slowly, sometimes quickly. Market forces will not, a priori, lead to a result that matches society's current understanding of morality and fair play. Therefore to advocate that it will is disingenuous or simply wrong.
No one argues against a market system to set prices in many circumstances, or to determine, in many of those circumstances where society should put its resources. Up to a point, that is, as there are many, many exceptions. And therein lies the dilemma, where do you set that point? Relying on the "free market" to do so is not going to be satisfactory for many Americans, although it may very well be just the ticket for some of them.
And it is ironic, or perhaps just weird, that so many advocates of the "free market" are in the technology industries and seem to be unaware that they are the beneficiaries of very non market forces. The technology industry as we know it today was financed in large part by our government as part of fighting the cold war. It was not market forces that invented and nurtured those technologies, not at all, it was the US Government through its Department of Defense, its Department of Energy, its National Science Foundation and a few other agencies. As those industries matured and became self-supporting the government moved on to other industries and technologies that needed or deserved advanced research money. In almost no cases is advanced research sponsored by private industry or the "free market". Not that I am aware of.
I think that what my friend *may* mean is not the free market, but something like "a market system that is controlled through a system of laws to enforce moral norms as determined through the political system as regards to the environment, the treatment of labor, education and other forms of social welfare, in a system that has gone to great lengths to see that access to justice and the political process is not unfairly weighted to the rich, but that it is equally available to people of all economic and social classes, not just through law, but through practical means."
Its not enough to say equal justice for the legal system if the rich always get off but the poor do not because of being unable to afford equally competent legal support. Its not enough to say the "market as modified by the rule of law" unless that law is proactive in making violations of morality a crime (e.g. abusing children in the workplace) and is industrious in enforcing the law.
Market forces alone is not a system that will result in a fair or just society and the idea that it would has been discredited long ago. The refusal to accept the evidence of your eyes does not make the evidence wrong.
One more thing. There is nothing funny about the political situation in this country, and the gross abuses of the right wing of the political process and their disingenuous and often hypocritical arguments. It is time for everyone to grow up and figure out when some right wing thug invokes the "free market", what it is they really mean.