Wednesday, April 7, 2010

The Myth Of The Free Market

From Dean Baker:

The current rules were not given to us by a deity or by nature, they were written by the wealthy and powerful interest groups who benefit from them.

I’ve long said that there’s no such thing as a “free market”*. Well, that’s not completely true. The black market, the drug trade, the prostitution business – these are the only truly free markets. Somalia – which should be an anti-government zealot’s paradise – has a free market. There really aren’t many other examples.

A functional market can only exist within the framework of a government. Without the laws that allow contracts to be enforced, agencies to enforce those laws, a stable currency to make trade possible, a highway system for the transport of goods and an education system to provide a competent labor force, there can be no market as we understand it. And these are only a few examples. The ‘free market’ only exists because government and the citizenry allow it to.

As Dean Baker points out, when conservatives talk about free markets what they really mean is government involvement that protects the wealthy and the powerful. Unfortunately those protected elites have an incredibly slick and well funded propaganda machine that obscures this fact and manages to convince a large swath of the working population that what is good for the elites is good for them also.

*Well, at least as long as I’ve been saying these kinds of things anyway.


Max said...

So why do so many businesses rise and and fall and go bust? Compare the top 100 companies in America at say, 30 year intervals and tell me how many are the same.

Ben There said...

That would be an interesting comparison Max. Exxon/Mobil, JP Morgan/Chase, Goldman Sachs, and others however have been around and on top for quite awhile. That said, small businesses do indeed come and go like the wind.

What would be even more interesting is comparing the wealthiest 200 individuals/familes at 30 year intervals and see how often that changes. I'd predict a pretty low turnover rate with that group. Bottom line is that our system favors wealth and privelege. For a number of years the Vanderbilt family even had their own congressman (literally).