A Primer for Voters, #2: The Free Market
We are often reminded that "There is not only no such thing as a free lunch." This is true in one sense, since, while I may get my lunch free by robbing the restaurant or blackmailing the proprietor or extorting money fraudulently that enables me to spend other people's money on lunch, but then the restaurant or my victims are paying for the lunch.
But if free lunch is an illusion or a swindle, so is the free market. Free markets are, in fact, a Platonic ideal that does not exist anywhere on earth. Whether we take "Free" to mean, either gratis or without constraints, the notion that there has ever been such a thing is preposterous.
If we mean by free "gratis," a market or system where no one pays, this is somewhere between utopian and impossible. It costs money to operate a market. One has to buy or rent the space; stalls are set up, with officials to judge the legality and quality of the products, check the weights and measures, etc. All that requires money, and if the sellers have to pay an access fee, they certainly pass on as much as they can to the buyers.
Of course when Classical Libertarians speak of free markets, they do not mean "without cost" but without constraint and regulation. If we interpret this absolutely, sellers would be able to set up shop on the school grounds to sell automatic weapons, hand grenades, heroin, and pornography. Setting aside the special case of minors and dangerous substances, have markets ever functioned without rules, regulations, constraints, much less officials who make and enforce the rules, determining who gets to enter the market? If there were such a dystopian experiment, it would mean that if I and my friends bought land in Illinois, we set up a market where people can buy and sell anything, and if we take off the list illegal or restricted products, a free market would still be opened to everyone in the world to whom I could sell with no constraints on the quality of my products or the false claims I might have made.
All the above is based on the notion that markets are actual places. But that is what the word means--and not some pie-in the sky dream of Milton Friedman managed by fair-minded computers and robots. Markets are controlled by living, breathing, human beings, and--this by the way will be the next Lesson--all human beings who enter any market are acting in their own interest and in the interest of friends and relatives. The biggest buyers and sellers and the biggest officials--let us call them the masters--have the most to gain from their activity. This is a point well made by Machiavelli in explaining why a commonwealth that acquires liberty is forever at prey to the minority who would profit from despotism.
The masters always control the markets for their own advantage. This is as true of stock market as a shopping mall, and even truer of theoretical international marketplaces and currency exchange and Bitcoin as it is of stock markets.
Sometimes, when a nation and its business class dominate the world markets, like Britain in the 19th century, an ideology of free trade is appealing, but not because it is free but because those who dominate the markets control the lawmakers who make the rules in the interest of their paymasters.
As an ideal, free markets--especially in a local sense- are worthy of respect: The less small entrepreneurs are constrained by irrational regulation and confiscation, the better off are most people--except, of course, for the capitalists who want to drive the small entrepreneurs out of business. Even the evil Adam Smith knew that whenever businessmen get together, you can bet they are trying to form a monopoly.
Classical Liberals and their Socialist disciples both make the mistake (though it is hardly that, from their point of view) of turning the concrete existence of marketplaces into the etherial abstraction of national and global markets. At least the Marxists see through part of the ruse, but they have even more serious delusions about a free society, which they define as one without private property and status distinctions. As the ex-comuninst Milovan Djilas noted, of the communists he had observed in both Yugoslavia and Stalinist Russia, the communists eliminate all forms of private property but their own. But what is sauce for the communist goose is sauce for the capitalist gander. Capitalists do everything they can do eliminate all forms of wealth and status except those measured in terms that the capitalists control, namely money.
When Pius X and Leo XII denounced both Capitalism and Socialism, they were simply acknowledging the pernicious evil of two ideological systems that empower the unprincipled scoundrels who control and coerce markets at the expense of people who actually work for a living. Recall the words of St Paul: "The husbandman that laboureth must be first partaker of the fruits." Both capitalists and socialists rob the farmer, the laborer, and the shopkeeper,--as well as the sculptor, the physician, and the teacher--of the fruits of his labor. And worst of all are the commissars, bureaucrats, and money-managers who suck the blood out of the laboring classes. What the ex-Trotskyist James Burnham called the Managerial Revolution was only a phase in the revolutionary tradition of tyranny that works unceasingly to replace reality with illusion and value with price.
The last part of the last sentence, “replace reality with illusion and value with price”, could keep us in discussions for years and not be exhausted. If price is to be determined by perceived value, that is, value as perceived by the buyer, and not by value that is intrinsic to the item being sold, then how far are we from the question of the difference between reality and delusion? Is perceived value not likely to be delusional? P.T. Barnum rides again.
The paragraph “As an ideal…monopoly” is about as close as you can get to gripping the issue. We never will reach the ideal but “willing buyer and willing seller” unimpeded by government or monopoly is the target.
I love my Dad. He was very good to me and to his family. He took my brother and me to the malleable iron convention if Fort Lauderdale in the mid fifties. While my brother and I swam and played, he and the conventioneers met. Years later I asked Dad what they were doing at the convention. Answer: “Fixing prices.”
But, Dean D., always bear this in mind. Recite it as you are going to sleep. No matter how important economic efficiency and prosperity are, they are goals vastly inferior to other goals with which they may conflict. Freedom to buy and sell is a paltry freedom in comparison with the freedom to hold onto your property, and even property rights are a distant second to all the other components of living well. America, at its greatest period of prosperity was a pleasant place but could hardly be compared in its highest accomplishments with, say, ancient Sicily or Medieval Tuscany.
Here is a clearer proposition. As an ideology, capitalism holds that the means of production should be owned and/or controlled by those who possess the capital. Socialists, by contrast, argue that society, not investors or proprietors or managers should control the means of production–including energy, transportation, and public services, and even agricultural production. Both are wrong, and the socialists considerably worse, but advocates of capitalism created their ideology as a justification for their plan to take and hold power over the economy. Unlike previous elites, they were not warriors or leaders or priests but moneylenders and makers of practical things. Today, capitalism boils down to the notion that the government can be owned and controlled by people like Bill Gates, Warren Buffet, Elon Musk, Jeff Bezos and a few thousand other men distinguished only for their ability to make and hold onto money. I give respect where it is due, and if I wanted to learn how to get rich, I should certainly consult those plutocrats, but they have as little wisdom–practical, ethical, spiritual–as the Hollywood celebrities whom they ape.
The trouble with free markets is that capitalists have never been willing to tolerate them.
Doctor, America gives me the privilege of hanging out with you and Clyde. I don’t have to hang out with Kamala and Donald. America with its ideal of free markets builds a low base I agree but it is one which the majority of the people can understand and to which they can aspire. It takes a lifetime of effort for most people to build wealth. This effort is peaceable and keeps them out of trouble. If they don’t have quite a few homely virtues, they won’t make it to their goal.
You know far better than I the accomplishments of Tuscany and Sicily. However, what occurs to me as I read the History of Florence is that it is much more like the South side of Chicago on a hot summer weekend than what you say. Again, I am early in the book and I do think there will be improvement.
Once more back to $, “isms” and “ists” confuse the discussion for me. On the low end I like to talk of “no free lunch.” On the high end, eg. Buffet, Gates, etc, I am so grateful people like this had a crazy drive to do something from which I can benefit with little or no effort. The entrepreneur risks his time and money and usually fails. When he succeeds, we all benefit. We should put in place tax and spending policies which encourage more risk taking.
DDB, let us be sure we are addressing the same questions, namely, the two I have put on the table. Neither of them has to do with the comparative economic and ethical superiority of free markets over command economies controlled by Marxist ideologues.
Now, first, to your specific points. Actually, my experience of the American system is that the ruling class that controls government, the media, the universities, and the great economic interests, has done a superb job of making sure that it is only by accident and against all odds that the wisdom of Prof. Wilson can be heard or read. The American opinion community that our friend Joe Sobran so perceptively termed the “hive,” treats dissidents much as bees treat colleagues who put a little twist into the bee dance: As Karl von Frisch demonstrated so clearly, they sting it to death. Now, direct violence, it is true, is more typical of hard ideological states such as the USSR and Nazi Germany. In the modern soft socialist states, especially John Dewey’s America, they more often use the carrot than the stick, and prefer tranqs and porn and a system of nationalized propaganda we jokingly call schools to the concentration camps and cattle prods of Hitler and Stalin. The result has been a marvelous success for setting the reign of Dullness in stone, eliminating all dissents except for the loyal opposition of movement conservatives and Republicans. I won’t bore you with my own story of finding myself blacklisted by both sides in the shadow-boxing conflict between the phony right and the phony left. To put it as simply as I can, there is no freedom of association, no freedom of thought, no freedom of expression or dissent in the United Soviet States of America.
Second, how violent was Late Medieval and Early Renaissance Tuscany? We really don’t have statistics. Certainly, like all great people they were a contentious lot, and wars were common, but I scarcely think the death and destruction in the wars between Pisa and Lucca or Pisa and Florence could be compared with the the wars and mass slaughters of the last century. If you really wish to believe this is a peaceful country, go ask the people of Dresden, of Hiroshima and Nagasaki, or more recently the victims of the brush wars in Africa and Latin America, the criminal campaigns against Iraq, Serbia, or Arab Spring, or or or.
You bring up Chicago’s South Side. You might just as well have brought up Rockford’s West Side or Los Angeles, Portland, San Francisco, where–despite billions of dollars spent annually on the police and criminal justice system, lives and property are not safe in America, because neither party will lift a finger to protect us from thugs. At least in Pisa or Florence, men could take up weapons and protect themselves and their families from predators.
If this line of reasoning had merit, if peace and quiet trumped brilliance and beauty, then of course we should all rather be slaves on a plantation or cows in the pasture contentedly waiting to be milked or slaughtered for meat. Fortunately for us, there have been ages of the world when people were not content to have a belly stuffed with bad food and minds stuffed with Hollywood productions. Although Entropy is a law of culture as well as of nature, just as evolution bends that law temporarily, so do societies like the ancient Greeks and Medieval Italians.
If you prefer to live in a world dominated by people like Bill Gates, you are welcome to it. De gustibus non disputandum est. Has technological innovation really caused men and women to live healthier, happier, more humane lives? Look at the pathetic Gates or Bezos or Jobs. I have known a more than a few rich people, and with only one or two exceptions, they are remarkably tedious people, bored with themselves, seeking sensations that other people devise for them, ultimately slaves of perverted appetites. Thanks but no thanks. In the course of the 20th century, Western man took the greatest backward steps in his history. We live in a Dark Age of ignorance and superstition, where the creepiest human beings that have ever crawled into the footnotes of a history book are at least nominally in charge of the world: Macron, Trudeau. Biden and Harris, McConnell and Schumer.
If one measures a society by how it treats decent people near the bottom, ours is a nightmare. If we measure it by the brilliant accomplishments by the elite, ours is a stunted freak. Free enterprise is not to blame nor even capitalism, but simply chanting Milton Friedman’s “Free to Choose Free to Choose” gets us nowhere, not even in a discussion, because–as I once asked Milton in an epistolary exchange–“Choose what?” But even beyond teh consistently dismal and evil choices that Americans make, one does wonder how many of them, in choosing McDonald’s over Burger King, Bud Lite over Miller Lite, Taylor Swift over Katy Perry, are capable of making any choice that has not been programmed into them.
I hope Dean continues to hurl his legal-eagle objections to the prosecution’s case. His rejoinders have helped to sharpen the argument.
It is easy to defeat this prosecutor by asking him to consider his own case. As far as I can tell he has complete freedom of speech, has good and loyal friends, knows and enjoys good food and drink, travels to desirable locations, and spreads his knowledge and good cheer to any who would have it.
Does he live in a country of which he wholeheartedly approves? No. But such a country never has existed. I am sure if there were a better country, he would move there pronto. His motivation is strong.
I don’t think de ‘Tocqueville thought highly of our cultural achievements when he visited in the 1830s. We are at or below that level today. So what is there to do other than complain?
As Doctor previously has suggested, live a good life in a dying age. God, friends, and family.
Beyond that, offer in the public arena useful thoughts. I have some.
I have certainly considered my own case. Moving at my age has too many drawbacks–separation from family and friends, adjusting to a different culture, the costs and time spent. Moving earlier would have been more possible but it would have meant the end of my livelihood. The head of a household has other interests to consult.
I live in a country of which I wholeheartedly disapprove, ethically, politically, and culturally, and it gets worse every year. As I know from speaking with DDB, he is a man of my age and does not seem to approve of most of the changes that have taken place. He does have a comfortable retreat in the country, where he can escape most of the miseries of urban American life, but apart from playing golf or tennis or occasionally going fishing, what pleasures can a sensible man have except a library full of books and a stack of records–or an account with Apple Music or some other streaming service. I was speaking recently with a few people, and we all agreed that it was better not to go out for dinner or try to take in even a good movie, supposing one could find one, much less go to a party where one encounters strangers who will find any plain truth, no matter how politely expressed, offensive.
To the extent I can choose the people I speak with and the life I lead, I am quite content, but then even a philosopher of as little attainments as I have can make himself happy under most, though not all, circumstances. But if I turn to what my country can offer me, it fills me with shame and disgust. As a naive lad, I was fond of reading and writing poetry. Such men as Robert Frost and T.S. Eliot were still alive; O’Neil was writing his last plays, Faulkner his late novels, and there were dozens of poets, novelists, essayists writing in the English language with clarity and charm. Even down into the 1970s and 1980s one could take pleasure in some of the Brit writers like John Betjeman, Philip Larkin, Anthony Powell, and read newspapers like the London Telegraph and magazines like the Spectator, for which I could write in the 90s. Today, I cannot bear to read the childish rubbish in even the best newspapers. And that is just one small part of it
We have willfully destroyed what was left of civilization in the English-speaking world far more thoroughly than the Bolsheviks ever did, and the most basic fundamentals of the human condition–differences in sex, marriage, childrearing–are now ugly distortions of what they had been. I envy the great apes their conservatism.