I was perusing some blogs the other day when I came upon a comment that struck a nerve in me. It was a comment that I think is indicative of the attitudes of some people who tend to believe in the left side of the political spectrum. I believe these are mostly goodhearted, well intentioned people, but I also believe they have been misinformed about what a free market is and what it is not. The comment, to paraphrase, basically blamed the free market for the financial mess we find ourselves in. I was compelled to reply to the comment and felt it might be appropriate to elaborate on my thoughts and share them with everyone. I think that, after all, words are important tools when it comes to communicating ideas with people and when definitions become skewed and screwy communications can become muddled. It then becomes important to redefine and better explain words so that everyone can better understand the concept that is trying to be conveyed.
The first and biggest misconception about free markets, in my humble opinion, is that we've ever had one. At least we haven't had one in recent history. I don't know whether this misconception has been spread deliberately or not, but I believe that at least in some cases it has been purposely proffered in order to obfuscate and shift blame so that a more collectivist agenda could be carried out. Yet people still blame the free market for the current situation. How can you blame something that hasn't existed in at least a couple of hundred years, if it ever existed, for modern problems? Well, some people have claimed it existed and some claim it still exists and others believe those people.
A free market is just that, free. That means it would be free of regulations. That means it would be free of licensing requirements. A free market would consist of free people freely doing business with others on a voluntary basis. The markets of the world today are far from that. They are watched over and strictly controlled by groups of people called government that claim a monopoly on force. These people are in turn watched over and controlled by a group of very wealthy corporations who have managed to create their own monopolies of sorts through bribes, payoffs, and influence peddling. Those corporations are, in turn, controlled by central banking interests who have managed to create, with the help of their political connections, legalized monopolies on the creation of currency. These are the establishment I so often write about. The free market has zero blame for the worldwide financial and currency crises that many have so recently become aware of, the problems are caused by the failures of the establishment monopolies and their machinations and manipulations.
We have in the world today, despite what you may have heard, a world market controlled mostly by multi-national corporations that answer to no one. They have grabbed not only virtual monopolies on many of the markets that force the world populous to use their products and services despite their records of poor quality, they have purchased with their ill gotten profits a monopoly on political power and in the process have corrupted and undermined some of the best conceived and most progressive governments the world had ever seen. We might have thought that the kings and queens of yesteryear had faded into memory and were no longer a threat to human kind, but their heirs, with the support of the families of the central banking cartels, have used their vast wealth obtained over centuries of creating wealth through privileged land ownership and serfdom to help re-create a modern version of the medieval feudal system that exalts lords and ladies while neglecting and abusing the common folk.
Corporations are government legal fictions created to protect the owners, board members, shareholders, etc., of the corporations. They are formed to prevent the common folk from holding them accountable should they cause damage or harm. Even the abbreviation LLC means limited liability corporation. The owners and shareholders of such a corporation can only be held legally responsible for any negligence or wrong doing of the corporation to a point, then the government protections kick in. In a free market system, those doing business would have to assume the risks that go along with doing that business if they wanted to reap the rewards. They would have to assume full liability for any negligence, fraud, or harm done and so would have to be extra careful to ensure that everything was on the up and up. The government would work for individuals who had suffered rather than for the corporation that caused the damage. Individual rights would be protected against aggression from the rich and powerful rather than being violated and aggressed against by the rich and powerful as happens in the present day.
People seem to forget who the free market is. The free market is you. Unless you are a bureaucrat making money off the coercive tax system, or a mobster running a protection racket, likely you are doing business on a voluntary basis and providing a product or service which needs to be better in some way than your competition. The free market is all who are small enough to fail and will do so if they are not competitive against others who offer the same or a similar product or service. The free market is the butcher, the baker and the candlestick maker. It is the local hairstylist who knows just how you like your hair cut. It is the corner store as opposed to big box stores. It is the local family farm as opposed to the large corporate farm. It is the local restaurant as opposed to the corporate franchise. It is the shoe factory down the road as opposed to the one that moves to another country. It is the doctor that makes house calls to the very poor as well as the very wealthy. It is a community of people who know and care for each other and do their best to provide the goods and services asked for in the open market.
The free market is a multitude of choice from a multitude of places, not the restrictive nature of a few cartels as exists today. An illusion of choice exists in the modern marketplace in order to fool people into believing there is a free market that can be blamed for problems that are almost certain to pop up when monopolistic organizations operate without accountability. This is especially true in the energy and financial sectors of the economy. In fact, it seems as though these sectors have far too much influence in the world's markets and have stifled innovations tremendously. It's strange to me that as a species we've developed such amazing technologies in so many different areas, yet we're still using technologies that are over a hundred years old to fuel our cars and provide us with electricity. It reminds me of something a friend of mine used to say, that if industries in the late nineteenth century had the power then that some have today, we'd still be using candles and oil lamps to light our nights and horses and buggies to travel. I have often wondered what kind of technologies have been lost or hidden due to the influence of modern mega corporations that have every incentive to keep the current technologies selling.
There was a time when markets were open to everyone. There was a time when all one had to do was hang out a shingle and he was in business. Those were some of the most prosperous times on record. Even today, societies that move from a more restrictive economy into a less restrictive one become more prosperous. Modern China is a good example of this phenomenon. When people are able to vote with their dollars, when they're able to decide for themselves who they want to do business with and who they don't want to deal with, when they can make their own decisions on how to spend their money and aren't dependent on government making such decisions for them, the best products and services for the least money tend to come to the fore, technology advances and everyone benefits. When government restricts and markets become less free, innovation is stifled, technology stagnates and the economy falters.
It seems to me that people have a tendency to resent being told what to do. They don't want anyone telling them how to live their private lives, who to have relationships with, how many children to have, what to eat, how to treat their bodies, etc., yet they don't seem to have a problem with telling others how to behave. This seems to be especially true when it comes to business dealings. People seem to have no problem with using the force of government to restrict economic activity. There's this false belief that government will somehow magically make people better behaved by simply creating licenses and regulations to engage in business. They seem to believe that government is good and will protect all the "little people" from big, bad corporations. They seem to forget that in order to be free you must allow others to be free. This works for economic activity as well as for personal activity. They seem to forget that government fails time and time again, no matter its mandate. It seems to me that government protects the corporations from ordinary folk, not the other way around.
The current economic crisis is not a failure of the free market, but a failure of government to provide a marketplace where opportunity abounds. It is not the failure of free market business practices, but a successful insertion of monopolistic practices and cartel takeovers. The economic problems we face are not the fault of free markets, they are the fault of an unaccountable, unresponsive elite establishment which has no incentive to change and fights to keep any competition that may challenge it out of the marketplace. They are the fault of a wealthy, elite establishment that has its fingers in too many pies and a winner take all agenda. They have every means at their disposal to keep the advantages they already have, and it is to their advantage to confuse and obfuscate the true meaning and nature of a free market. All it will take for them to keep winning and remain on top would be for all to blame free markets for a poor economy, for them to accept crappy products and services from monopolies and believe that it's simply the way things have to be, for them to believe that there's such a thing as "too big to fail," and for no one to speak up against the fascist, authoritarian, corporatist, one world government we are moving toward. In the long run, however, they will fail when enough of the common folk figure out their tricks and lies and the misconceptions are no longer believed.
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