Observation Number 2: Free Markets are a Lie

I am very skeptical of “free-market” economists that promote deregulation and the worship of Alan Greenspan.

Free Market Economists make the argument that if people were left to their own devices, they would naturally make the most efficient allocation of resources. And the reason for market inefficiencies (like crashes) is government intervention. If the government just stayed out of it, everything would work itself out.

I’m not saying that free market economists are wrong – in many ways, a little less government intervention might be good for progress and innovation. But at the same time, I can’t help but see a parallel between this development of economic thought and the Reformation.

I may be shot for saying this, but from what I can tell, Mr Luther’s big gripe was the magisterium of the Catholic Church. And that complaint turned into a pontiff-less procession of Protestants, Baptists, Methodists, Quakers, Evangelicals, Pentecostals, and hate groups. All bound together by sola scriptura, being a faith based solely in the Holy Book and the individual’s interpretation thereof.

But is it really pontiff-less?

Not at all.

The Pope is the only Catholic to speak infallibly ex cathedra on matters faith-related. The Reformation just made Popes of everyone, which turned the Christian faith into a free-market economy with plenty of faith-based products creating confusion. Each pastor with a pulpit is now free to espouse an interpretation of Law, with the size of his following determining the strength of his message.

And the interesting question is what that did for the Christian message. Instead of an enlightened leadership guiding the faithful in a united proclamation of good news; “Christianity” is now an association of viewpoints on who’s going to Hell. I’m not sure if the Christ had this gospel of exclusion in mind – but that’s mostly where we find it.

And in much the same way, the liberalization of markets doesn’t destroy regulation. It just makes everyone his own self-regulator. Which, in my opinion, has an economic ending like the Lord of the Flies.

Because “free markets” is just a pleasant way of saying “survival of the fittest”. When you throw humans into survival mode, the altruists don’t win. We’ve seen the apocalyptic movies and the rabid shopping on Black Friday. Even if some of the party remains altruistic, they just become cannon-fodder for the opportunists.

An example: if you deregulate the labour market, then by definition, child labour is no longer an evil. And even if you, as a manufacturer, make the moral decision not to employ able-bodied children; your competition will not. And your competition can cut costs because of it: until you either change your labour policies, or martyr yourself on the altar of your principles.

Too much freedom is not good for mankind. It’s why we have laws and regulation and governance: to protect us from our own biases. And from the fittest – who if left to their own devices, tend to keep winning – all the way to some form of monarchy and serfdom-type scenario.

Do governments always do a good job? Well, much like the Popes, you get good ones and bad ones. But on the whole, I think that there’s a reason that we’ve historically longed to be governed.

It’s because if you ask us to govern ourselves, we make a complete hash of it. And if a government makes a complete hash of it – well at least then we have someone to blame.

Comments

Caustic Pop January 3, 2013 at 10:07

“Because “free markets” is just a pleasant way of saying “survival of the fittest”. When you throw humans into survival mode, the altruists don’t win.”

I don’t think using pithy clichés to make shallow insinuations and false dichotomies is the best approach for thinking about these notions. Commerce and co-operation have zero to do with altruism. Engaging peaceably with others can be just as self-serving and personally beneficial as brutalizing them. In fact, it’s a vastly more successful behaviour/choice, as evidenced by the fact that humans thrive the more peaceable, co-operative and commercial they behave. So why wouldn’t this count as being among the characteristics of the “fittest”? Can and does this state of affairs really rely on an organisation that is totally inimical to such principles (namely government, which claims a monopoly to utilize violence, engages in imposition rather than co-operation and seeks to command and control commerce)?

“if you deregulate the labour market, then by definition, child labour is no longer an evil.”
Why would a child that willingly, or for the sake of survival, engages in commerce and produces for others for his own benefit be considered “evil”? And whose definition of “child” are we using? Whose idea of evil? Under what circumstances? Never mind that the notion that people would not have to engage in productive activities, whether for survival or convenience, until after their first 20 odd years of life is an incredibly modern notion and a modern luxury. There’s a lot more depth to these issues than superficial declarations and pithy clichés would have us believe.

“It’s because if you ask us to govern ourselves, we make a complete hash of it. And if a government makes a complete hash of it – well at least then we have someone to blame.”

Don’t get sucked into alternative myopia. Look beyond the statist quo. Social order and the settlement of disputes have, can and will occur with or without an organised monopoly called government.

I personally believe the one major hurdle to people recognizing what is a) self-evident (the virtues of commerce, how we are mostly co-operative and peaceable without state thugs looking over our shoulders) and b) actually taking alternatives seriously (instead of just knee-jerking that without government we’d all be living in the dirt killing each other). People seem to associate social order with multiple metaphorical figments, i.e. that it is ordained from “society”, “deity”, “culture”, “state” etc. rather than as the actions and choices of individuals who are co-operating. It’s because of what I think is a sort-of mystical hang-over from the development of our species that a pack of thugs, banding together and calling themselves “government”, have been able to create the impression that they need to monopolize what is really emergent, dynamic and decentralized. This is why governments always seek to place themselves as not only the physical manifestation and enforcement of “state”, but the embodiment thereof, hence their desire to always be regarded as the seat and spring of society, deity, culture etc.
Anyways, enough rambling. Back to work..

Jayson Coomer January 3, 2013 at 19:35

Alright – let’s assume that “fittest” includes those that are going to be long-term oriented and will choose to save the host. They will be beaten by those that choose to kill the host. And that is a question of human nature – which is almost universally myopic.

And I’m sorry – but I just can’t buy the theory that “government” is a giant conspiracy and we would all naturally end up self-governing and happier without it. It requires a coordination of effort that spans centuries and all cultures. Isn’t the simpler explanation that the emergence of governance structures is a phenomenon that occurs naturally within humanity?
Reply
- Caustic Pop January 3, 2013 at 22:13
  
  Not sure what you’re getting at in your first paragraph. What’s “the host”?
  
  “Isn’t the simpler explanation that the emergence of governance structures is a phenomenon that occurs naturally within humanity?”
  
  Yeah, that’s a point I’m trying to make in the final paragraph. Sticking point is: does “governance” mean only the imposition of law by an organisation which claims a monopoly over the use of violence?
  
  You ever read Rothbard’s Anatomy of the State? http://mises.org/easaran/chap3.asp
  Reply

Caustic Pop January 3, 2013 at 23:21

Just saw this. Nice examples of private regulatory alternatives to the government: http://www.tomwoods.com/blog/how-to-solve-problems-without-calling-the-goons/

Caustic Pop January 3, 2013 at 10:07

“Because “free markets” is just a pleasant way of saying “survival of the fittest”. When you throw humans into survival mode, the altruists don’t win.”

I don’t think using pithy clichés to make shallow insinuations and false dichotomies is the best approach for thinking about these notions. Commerce and co-operation have zero to do with altruism. Engaging peaceably with others can be just as self-serving and personally beneficial as brutalizing them. In fact, it’s a vastly more successful behaviour/choice, as evidenced by the fact that humans thrive the more peaceable, co-operative and commercial they behave. So why wouldn’t this count as being among the characteristics of the “fittest”? Can and does this state of affairs really rely on an organisation that is totally inimical to such principles (namely government, which claims a monopoly to utilize violence, engages in imposition rather than co-operation and seeks to command and control commerce)?

“if you deregulate the labour market, then by definition, child labour is no longer an evil.”
Why would a child that willingly, or for the sake of survival, engages in commerce and produces for others for his own benefit be considered “evil”? And whose definition of “child” are we using? Whose idea of evil? Under what circumstances? Never mind that the notion that people would not have to engage in productive activities, whether for survival or convenience, until after their first 20 odd years of life is an incredibly modern notion and a modern luxury. There’s a lot more depth to these issues than superficial declarations and pithy clichés would have us believe.

“It’s because if you ask us to govern ourselves, we make a complete hash of it. And if a government makes a complete hash of it – well at least then we have someone to blame.”

Don’t get sucked into alternative myopia. Look beyond the statist quo. Social order and the settlement of disputes have, can and will occur with or without an organised monopoly called government.

I personally believe the one major hurdle to people recognizing what is a) self-evident (the virtues of commerce, how we are mostly co-operative and peaceable without state thugs looking over our shoulders) and b) actually taking alternatives seriously (instead of just knee-jerking that without government we’d all be living in the dirt killing each other). People seem to associate social order with multiple metaphorical figments, i.e. that it is ordained from “society”, “deity”, “culture”, “state” etc. rather than as the actions and choices of individuals who are co-operating. It’s because of what I think is a sort-of mystical hang-over from the development of our species that a pack of thugs, banding together and calling themselves “government”, have been able to create the impression that they need to monopolize what is really emergent, dynamic and decentralized. This is why governments always seek to place themselves as not only the physical manifestation and enforcement of “state”, but the embodiment thereof, hence their desire to always be regarded as the seat and spring of society, deity, culture etc.
Anyways, enough rambling. Back to work..
- Jayson Coomer January 3, 2013 at 19:35
  
  Alright – let’s assume that “fittest” includes those that are going to be long-term oriented and will choose to save the host. They will be beaten by those that choose to kill the host. And that is a question of human nature – which is almost universally myopic.
  
  And I’m sorry – but I just can’t buy the theory that “government” is a giant conspiracy and we would all naturally end up self-governing and happier without it. It requires a coordination of effort that spans centuries and all cultures. Isn’t the simpler explanation that the emergence of governance structures is a phenomenon that occurs naturally within humanity?
  - Caustic Pop January 3, 2013 at 22:13
    
    Not sure what you’re getting at in your first paragraph. What’s “the host”?
    
    “Isn’t the simpler explanation that the emergence of governance structures is a phenomenon that occurs naturally within humanity?”
    
    Yeah, that’s a point I’m trying to make in the final paragraph. Sticking point is: does “governance” mean only the imposition of law by an organisation which claims a monopoly over the use of violence?
    
    You ever read Rothbard’s Anatomy of the State? http://mises.org/easaran/chap3.asp
Caustic Pop January 3, 2013 at 23:21

Just saw this. Nice examples of private regulatory alternatives to the government: http://www.tomwoods.com/blog/how-to-solve-problems-without-calling-the-goons/

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