What Free Market?

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From the beginning, most commentators agreed that this recession was caused by a failure of the free market. But an important fact that seems to have been forgotten is that America is not a free market.

The government is active in every industry-from health care to the aeronautics industry-and in every aspect of the economy-from the price of labor to the money supply and interest rates. When one considers the Postal Service, Unified School Districts, the Agriculture Adjustment Acts, and hundreds of other laws and regulations that control and restrain the economy, it is just bizarre to call this level of government intervention in our economy a ‘free market.’

It was the mixed economy-not the free market-that failed. Once we acknowledge this, we are left with two options: move further down the path of socialism or in the opposite direction towards freedom.

For more information on this topic, please check out Yaron Brook and Don Watkin’s excellent article, “America’s Unfree Market”.

A fuller explanation of the meaning (and implied moral base) of Laissez-faire is available in Ayn Rand’s timeless articles, “The Nature of Government” and “Man’s Rights”.

Posted by on September 1, 2009. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
  • Daniel Casper

    A free market is the only economic system which rewards human virtue. Let its opponents ask themselves what they are rewarding when they use the government to try and solve an economic problem. The consequences are already obvious enough.

  • Daniel Casper

    A free market is the only economic system which rewards human virtue. Let its opponents ask themselves what they are rewarding when they use the government to try and solve an economic problem. The consequences are already obvious enough.

  • Graeme Woods

    The concept of a free market is beautiful. The only real issue is the amount of faith one can have in human virtue. What is moral and right depends on place and time. We can see from our history, observing the variability of virtues over person, place, and time, that The consequence of a truly Laissez-faire economy is anarchy.

  • Graeme Woods

    corrected link

  • Daniel Casper

    Graeme Woods,

    What is moral is what is rational in a given situation. That is consistent whether you are living in 1600 or 2009. The rational choice is to pursue values by means of virtues.

    Anarchy is a state without a government. A free market needs a specific kind government – Capitalism. Capitalism consists of the police, military, and courts to handle disputes and acts of force between men. Any person living in a free market recognizes that a government is necessary, and that anarchy is just as much a threat to their existence as Statism.

    Furthermore, a free market, as I stated, rewards or punishes failure. Those that lack virtues, the means to obtain values, will have not as many values. Those that do possess virtues will always be the ones to drive “society” forward. It is under Capitalism that these men are freed to their highest potential – which is the real glory of a free market.

  • Graeme Woods

    The concept of a free market is beautiful. The only real issue is the amount of faith one can have in human virtue. What is moral and right depends on place and time. We can see from our history, observing the variability of virtues over person, place, and time, that The consequence of a truly Laissez-faire economy is anarchy.

  • Graeme Woods

    corrected link

  • Daniel Casper

    Graeme Woods,

    What is moral is what is rational in a given situation. That is consistent whether you are living in 1600 or 2009. The rational choice is to pursue values by means of virtues.

    Anarchy is a state without a government. A free market needs a specific kind government – Capitalism. Capitalism consists of the police, military, and courts to handle disputes and acts of force between men. Any person living in a free market recognizes that a government is necessary, and that anarchy is just as much a threat to their existence as Statism.

    Furthermore, a free market, as I stated, rewards or punishes failure. Those that lack virtues, the means to obtain values, will have not as many values. Those that do possess virtues will always be the ones to drive “society” forward. It is under Capitalism that these men are freed to their highest potential – which is the real glory of a free market.

  • Stephen Bourque

    The article makes the important point that it is the UN-free market that has failed.

    As one of the innumerable pieces of evidence that this is the case, observe that the industries that are most in trouble are the ones that are most heavily regulated and controlled by the government: the financial sector, medicine, automobiles, utilities. Industries that are relatively free – food, clothing, consumer electronics, entertainment – are comparatively flourishing.

  • Stephen Bourque

    The article makes the important point that it is the UN-free market that has failed.

    As one of the innumerable pieces of evidence that this is the case, observe that the industries that are most in trouble are the ones that are most heavily regulated and controlled by the government: the financial sector, medicine, automobiles, utilities. Industries that are relatively free – food, clothing, consumer electronics, entertainment – are comparatively flourishing.