The “Contract from America” repeats the old saw that,
Well, yes, very Friedrich Hayek, la-de-da. But is there any actual historical evidence for this? And what value of free market are we talking about? Laissez-faire was pretty firmly repudiated & replaced by social democracy in most Western democracies some time back. How free is free enough?
Hmm, well none of the social democracies of the latter 20th century would have ever existed if not for the free market movement of the 19th and early 20th century.
The term free market is kind of vague, though. Back in the 1700s when people first started using it, it basically meant a market free of feudalism, serfdom, mercantilism, and other primitive socioeconomic systems that had vast barriers to trade, private entrepreneurship and etc. By comparison even a hardcore social welfare state like Sweden is a free market utopia compared to the 1700s economic model of most European states.
Well, what other candidates do you wish to toss up that have been more materially instrumental in terms of social progress and overall beneficial to peoples standards of living (by which I presume ‘material progress’ is a code word for)?
-XT
The government. It was the government that outlawed slavery, not the free market. Every civil right you have is guaranteed by the government, not the free market. Every freedom you have exists because the government prevents other people from taking it away. The oh-so-wonderful free market only exists (to the extent it does) because of the government.
A free market is, contrary to the quote in the OP, at least as much a source of tyranny and exploitation as it is a source of freedom or prosperity. The free market has no problem with child labor, contaminated food, jobs that cripple or kill, slavery, the rape of employees, the systemic humiliation of employees, forcing employees to vote on command, any and all forms of bigotry, and on and on. It takes the government not the free market to fight that.
The big thing to me is as a person with a strong interest in history I think I probably see the free market as something a lot different than most people. Most people think free market = United States and Europe is running some different economic system and that’s why they have universal healthcare, presumably better social services across the board and a better retirement system.
Well, in truth the United States isn’t anyone’s definition of a “true” free market the United States has a vast welfare state, vast social services programs, spending in the trillions on such things. We pay trillions in taxes, we pay on average more than 30% of our gross pay back to the government.
Some people also think of the gilded age America when robber barons ruled the country, children worked 12 hours a day and workers who died on the job were thrown away and their families given no compensation whatsoever.
When I think of the free market I tend to think of what we had before (and this is Western centric) we had basically a lot of local markets with very little trade. Obviously trade has been around as long as civilization, but I don’t think most people realize that even as recently as the 1600s/early 1700s large parts of European states like France and Germany were essentially entirely self sufficient. Their interaction with the outside world was minimal, their trade was minimal, they mostly grew everything they needed to survive and these people did not have varied diets at all. I read an account of the life as a peasant farmer in Europe c. mid 1600s and people were literally eating like a pound of bread a day as their entire food consumption. It had enough calories to keep them more or less okay but none of the nutritional variety we come to view as essential to our health.
A merchant wanting to ship goods from the eastern part of Germany to say, the middle of France would probably have to go through over 100 different customs charges. This wasn’t just because of all the micro-states of Europe at the time, this was true for internal trade as well. Just moving stuff from one part of France to another resulted in a commodity having its final selling price usually doubled or more just because of all the various local taxes and tariffs extorted from various entities (cities, local nobles, various religious orders that also had taxation privileges and etc.) One of the major factors of production, especially then but still today, is land. Vast tracts of land were owned by the Church and by the nobility. These entities weren’t paying tax on this land, and in fact in most cases they extracted rents from it (in the form of a share of harvests, usually.) These great powers essentially had permanent right to this land, no amount of mismanagement would result in some sort of central body taking it away. Even the most cash poor noble could usually hold on to their land if they wanted to, immune from modern day concerns of foreclosure, inability to pay property taxes and etc. Some nobles had massive tracts of land that were just kept for their value as hunting locations, meanwhile the 99% of the country that wasn’t part of the Church or the nobility had to eke out a subsistence living and then have part of their production taken from them by the permanent upper class…just because.
Obviously the farther back you go the worse it gets. I’m really talking about “relatively” modern times so far. If you go back to the real middle ages, say 1200 or so, serfdom was far more prevalent and far closer to true and absolute slavery. (By the 1600s most Western European states had abolished serfdom, although most people were still impoverished tenant farmers.)
It really was, in my opinion, the free market that brought that whole system toppling down. The more and more influence entrepreneurs have, the more innovative society became, this didn’t just mean less poor people and a growing middle class. It also meant a more educated population, and that created the nucleus of educated people that were necessary to really bring down the old regimes of Europe.
I’d say that the most powerful, proven instrument of material and social progress is the Mixed Economy, which has elements of both the free market and elements of socialism. The USA is a mixed economy. So are all the countries in the European Union. We can quibble over what percentage of the GDP should be allocated to the government, but neither 100% nor 0% are going to lead to optimal results.
In history though, it was actually the government that fought to keep slavery around. Entrepreneurs in the 1500s were not benefited by the continued existence of serfdom, even monarchs didn’t much like it, but they tolerated it because monarchs cared more about pissing off people of noble blood than they did their people.
Government is the single greatest tyrant in the history of man, it has killed more people, enslaved more people, and caused greater suffering than pretty much anything else. Government, meaning the organs of a state’s power structure, are pretty much the only thing that has the power to really keep people enslaved and do all the other horrible things so many leftists want to blame on an economic concept which is really only about letting tons of individuals make a choice instead of one centralized figure.
Also, if you’re interested in just letting government run everything (including the economy) don’t think about communism. Think about feudalism, because that’s exactly what feudalism was.
People don’t think about feudalism in that way, and I’m not really sure why. Feudalism was all about dividing up an entire country into various land holdings, each holding ran by what was essentially an absolute dictator accountable to no one. The landed nobility of the dark ages/middle ages weren’t accountable for their behavior to their slaves (serfs), they might be held accountable to a greater lord or the monarch if they directly acted against them, but that was it.
The local lord had absolute control of all economic activity in his domain, he had true power of life and death. Not just in the form of his ability to actually kill anyone he wanted on whatever charges he felt like inventing, but also his ability to just kick you off the land and watch you starve to death (survival of some random person who doesn’t have a place to stay in the years ~900-1400 was very unlikely.)
People don’t think of feudalism as an example of government controlling everything because people think of Congress, big bureaucracies, Presidents, Prime Ministers and et cetera when they think of government. But for most of history government has meant local chiefs (by a variety of different names and creeds) with near absolute power over everything (including all aspects of the economy.)
Just because we have governments made up of a larger number of individuals doesn’t mean it’s a good idea to give them the same amount of power that they used to have. While we may be different than the lords of the middle ages, the people running things are still human with all their failings.
Even an absolutely benevolent Prince lacks the competency to run everything, because the decision making abilities of the many will always, over time, be more powerful than the decision making abilities of the few.
But entrepreneurs loved wage controls and vagrancy laws, which the aristocrats in charge of the government were only too happy to pass. That they could not be enforced very well was less a problem of philosophy than of ability. If business owners would have been able to force the proletariat to work for a legally mandated wage, they would have done so.
I would say technological progress – to which the free market may be conducive, but it seems to happen to some degree in a wide variety of systems.
Material progress?
Certainly, with caveats.
Social progress?
Not so much.
And yet governments throughout history have been more the instruments of oppression and everything else you list here than anything else (outside of, possibly, religion).
Can you list how a free market has been a source of tyranny and exploitation over that of a government? Because, frankly, I’m not seeing it. For one thing, I think you are using a different definition of what a ‘free market’ actually is than I am, or you think it’s something vastly different than I do. So, you might want to start with how you are defining that term, and then explain how the list you have up there only goes for a ‘free market’ while not impinging on the government who you see as ‘the most powerful, proven instrument of material and social progress’ in history. Because I see a free market as a subset of the society it is operating in…the superset being the government. So, all those ills you heap on your definition of a ‘free market’ would ALSO be heaped on ‘the government’…except even more so, since the government encompasses the ‘free market’ plus a lot more.
But technology in and of itself doesn’t least to ‘material and social progress’…certainly not social. And technology is also a two edged sword, since that would go for iPads AND nuclear weapons and everything in-between.
-XT
Most social progress is impossible without material progress, though.
Like Ludovic correctly states above, yes entrepreneurs have historically been willing to exploit people just as much as the nobility. However, just by giving the “proletariat” a chance to actually work for money and be part of the larger economy, the stage was already set for their lot to get better. Before that poor people were essentially locked into a subsistence barter economy.
I instinctively think of education and technological progress being key to material/social progress. However, it’s very chicken and egg. Before free market economics it was highly irregular for anyone but the wealthy to get the benefit of education, most technologies and et cetera.
In many ways the closed markets of old Europe actually directly impeded major advances in agricultural technology. Scientists made huge gains in agricultural knowledge in the years 1650-1815, and many times the greatest barrier to their ideas being implemented was it required doing things in ways that went against the existing way that things were being done. Most property owners and even serfs fought the changes because they thought they were not to their benefit.
In a truly free market dragging your heels on major technological revolution just “because that isn’t how we do things” would result in you being ran out of the market, but so many protections were in place for the upper class that it was a very slow process for the agricultural revolution to really take off.
And? I never said the government couldn’t be used for oppression. I said that the government was the only real tool we have for avoiding oppression. A government powerful enough to do the one is powerful enough to do the other.
Say what? Working people to death and disablement isn’t exploitative? Slavery isn’t exploitative and tyrannical? Child labor isn’t exploitative? Raping your secretary isn’t exploitative?
Since I never said that the government was incapable of evil your argument falls apart. The idea that just because I think the government is useful that I must revere the government as some sort of shining bastion of perfection is just an example of how the free market worshipers project their attitude onto everyone else.
I’m not claiming that government is perfect; I’m claiming that it is what does the job. As opposed to the free market, which not only doesn’t do as good a job; it doesn’t do it at all. The free market is indifferent to human suffering and injustice.
That ignores the likelihood that the government is simply indifferent, or that it has been co-opted by the market.
Certainly it does. For example, birth control pills, cars both led to increased freedom. Modern medicine means that women are not hobbled by near-constant pregnancies, due to a lack of birth control and the need to keep up with a huge child mortality rate. And cars led to increased freedom due to their mobility advantage; it made it easy to get away and do what you liked far out of sight of tyrannical family elders, or to leave your conservative home town or state for a freer one far away.
Irrelevant. There’s nothing in the world that is purely a source of good.
Okay, I probably should have added something like “with lesser caveats” to “not so much”.
It’s true that some measure of material security was necessary for social progress but most, if not all, of that social progress required fighting business interests (among others) and in many instances required direct government intervention.
The quote in the OP is a bit disjointed. I think the key part is one that has so far been mostly ignored in this thread:
"Any other economic system, regardless of its intended pragmatic benefits, undermines our fundamental rights as free people. "
Emphasis added.
On the one hand, the quote invoices any institution, but then ends by narrowing things down to economic institutions. It doesn’t really make sense to compare political systems with economic systems.
Clearly, a government is necessary to ensure rights. You can’t have rights without a government. Slavery was instituted by governments and it was ended by governments. One can argue if the market economy had any role in ending slavery, and I think a good case can be made that you need a relatively affluent, educated populace to create the political empetus for ending slavery, and only a market economy can create that situation. I’m not sure you’d go about proving that, though.
At any rate, I think Martin Hyde’s comments are well worth noting, too. The difference between the economic system in the US and Sweden or France is miniscule compared to the difference between any of those economic systems and that of the former USSR.
I think the better way to look at is to say that the default position is the market should be used as the way for people to organize their affairs, and that government should step in only when there is a clear and obvious reason to do so. Of course, that’s the crux of what we’re always arguing about: where do you draw the line between what is clear and obvious and what is not.
Still, I don’t think one could make much of a case for doing the opposite: The government should, by default, control everything and only allow those things to be taken over by the market where there is a clear and obvious reason to do so. History has shown that once you surrender something to the government, it is extremely difficult to get it back.
Wha…?
What does rape have to do with this? Are you implying that sexual favors are used to climb the corporate ladder in a way materially different than on the government side? Cite?
That’s kind of silly. You might as well say that MAN is the greatest tyrant known to man. Men have killed more people, enslaved more people, and caused greater suffering than pretty much anything else. Even in ANARCHY, men manage to kill other men off in impressive numbers. Is mans inclination to harm each other better controlled by the free market or by government?
Free market.