Rebutting an Anti-Free Market Comment

In a thread on the LinkedIn discussion group Citizens and Societies - Building better societies together! titled 'It is my opinion that one of the biggest challenges to better modern societies is what I'll call the "Free Market Myth"' Wade Fransson posted a comment further explaining his hypothesis that free markets can't exist (reproduced below). I respectfully offer this rebuttal.

The first mistake Wade makes is to conflate legality with regulation, they aren't the same thing. The rule of some kind of law is indeed necessary for a free market to function. (How this law is enacted and enforced and by whom is another discussion.) To have markets we must have private property. To have property we need a legal system of some kind to protect property rights. It should be noted that legitimate law is almost entirely reactive. When aggressed against the victim or victims seek restitution from and punishment for the transgressor.

Regulation is another matter. It is proactive. Regulations often require licensing, inspections, reports, and, of course, compliance. All under threat of punishment without a crime having been committed. This is a violation of the Non-Aggression Principle, the idea that no one has the right to initiate the use of force nor the threat thereof. Once it is established that force can be legally initiated by some against others the door is open for abuse and corruption. To be free markets must be free of people initiating coercion. Retaliatory coercion is necessary and the role, the only role, of the law.

Though he didn't use the word regulation Fredrick Bastiat covered the subject in his book “The Law”:

“What, then, is law? It is the collective organization of the individual right to lawful defense.”

“Thus the principle of collective right — its reason for existing, its lawfulness — is based on individual right.”

“...since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force — for the same reason — cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.“

Since as individuals none of us can claim the “right” to go to another's place of business and demand information, demand that they get our permission to operate their business, or make any other demands while threatening them with using force on them if they don't comply the collective can claim no such “right” either. Yet this is what regulation does.

Wade wrote:

1) Robbers (Participants introduce the transaction type known as "Theft" into the Marketplace)
2) Cops (Participants introduce Regulation to counteract the Theft),

The idea that regulation is implemented to counteract theft is naive at best, willfully ignorant at worst. It is the legalization of theft. It is what Bastiat called legal plunder in “The Law”. The history of regulation is one of entrenched interests calling for regulation to protect and enlarge their market share and wealth, I.E. to stifle competition. A great example of this is the creation of the Federal Reserve System. JP Morgan was behind it. Yet somehow, many believe the government created it to take power away from old JP. Ayn Rand wrote about the process as it applies to broadcasting here. “Why Doctors Don’t Want Free-Market Medicine” describes the process in the health care field.

Further evidence of Wade's confusion on the issue is found in the very comment he made. At one point he writes “regulation to prevent Robbers often becomes part of the problem”. He then strangely goes on to write 'The Illegal Forceful Trick is to "sleight of hand style" turn the Cop into the Thief. This is what some of Jeff's comments seem to do.' Wait a minute, turning the cops into thieves isn't a rhetorical trick someone else did. It is something that Wade himself has acknowledged is reality. Given that reality it is irrational to advocate for the thief.

Below is the comment being rebutted:

"Jeff's oversimplified "Market" (I prefer to call it "Cops and Robbers Governed Marketplace - vs. Free Market - since "Free Market connotes a myth where there is no theft) is a very good, very helpful two-dimensional model. It covers neither the third dimension - depth (which I'm using to denote complexity) nor time (the fourth dimension).

Regulation often seeks to confront Theft that can only described by depth and time - vs. Jeff's two-dimensional description of Theft (deadly force).

Let me unpack these statements: Jeff wrote:

"No, stealing is always a threat to survival because it sets a precedence that if it is rewarded then it should be repeated."

Here Jeff compresses the four dimensions of...

1) Robbers (Participants introduce the transaction type known as "Theft" into the Marketplace)
2) Cops (Participants introduce Regulation to counteract the Theft),
3) Complexity Arises - various types and degrees of theft and regulation
4) Time (and change) - the increasingly complex system adapts

...into a simplified 2 dimensional model.

This model is almost a Caricature, really, but I'm OK with this particular representation, for purposes of this discussion, because it is a really good, useful model, and it is the one Jeff prefers, and he has introduced tremendous value into this thread - thanks Jeff :) ) of "Deadly Theft" and "Legal Force".

Jeff's bias seems to be to blame the Cops for the outcomes related to Theft, because their regulation to prevent Robbers often becomes part of the problem. This is upside down, or inside out, or backwards - pick a metaphor of choice. Because Theft. The Robbers, are the problem. They are the "Action" which - per Physics - requires an equal and opposite reaction.

The legal "trick" is in getting the Reaction right. The Illegal Forceful Trick is to "sleight of hand style" turn the Cop into the Thief. This is what some of Jeff's comments seem to do.

And this is where Jeff and I have yet to reach agreement - the fourth Paragraph of my Opening Post.

It descends, logically, from the point of legitimate disagreement we've already identified - the question I asked of Jeff a number of posts ago:

"2) Can you live with "develop rules of behavior which become "Regulation" in the market" or do you insist that all regulation which is not directly discoverable in Nature is "Illegal Force"?"

Because where Jeff's legitimate two-dimensional model becomes an illegitimate caricature, which steals from this discussion, is where he begins to define Government as unable to "discover Natural Law" which becomes the domain of the "Seer" who has somehow magically established that "Government IS the thief".

This is deadly force, and it gets to the Crux of what my Opening Post calls "The Free Market Myth".

Drug Prohibition: Law Enforcement Is The Problem

Ending the War on Drugs would save countless lives from being lost or ruined. An enormous drain on our economy would cease. It would be great. Ending the War on Drugs would be a tremendous first step, but then what?

The government would still have all the police powers it used to have. Perhaps they could be convinced to cut them back a bit, but we know from painful experience how hard it is to get the government to give up a power it has acquired. No doubt it wouldn't take them long to find other laws for their bloated police agencies to enforce on us. They have to justify those big budgets somehow.

A key point here is that the source of the problem is not the War on Drugs, that is merely the symptom. The problem is that the government has the means to enforce laws like the drug prohibition. Once it had the power it then passed the bad laws. (Of course, once they had these bad laws to enforce they then used the higher crime rates these bad laws created to justify more, and more powerful, police.) The only way to ensure that there won't be a repetition of the War on Drugs fiasco is to abolish policing as we know it today. The ending of the prohibition of alcohol proves this point. They merely switched from punishing bootleggers and drinkers to punishing drug dealers and users.

We need to move to a system of private security. There is no need for local police. History has already proved that private security is better at protecting us than the government is. A shining example is Oro Valley, Arizona. In 1975 they hired Rural/Metro Fire Department, Inc. to essentially be their police department providing the services previously provided by the county sheriff. Crime rates where greatly reduced at a fraction of the cost of a government police force. (See Guns for Protection, and Other Private Sector Responses to the Government's Failure to Control Crime, page 22 of the PDF page counter)

There is no need for national level law enforcement. Agencies like the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Drug Enforcement Administration are merely instruments of oppression enforcing mostly unconstitutional laws. One is reminded of Thomas Jefferson's words about the distant and overly powerful capitol, "When all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another and will become as venal and oppressive as the government from which we separated."

So not only is private security better able to protect people and property, they have a provider/client relationship with them. Under this scenario there is no incentive for private security to enforce something like the Drug Prohibition and the government wouldn't have the means to do so.

Policing as we know it today got its start in the mid 19th century. It wasn't truly about preventing crime as crime rates were quite low back then. It was all about expanding the government's power. Fast forward to today and we find that the greatest threat to our lives, liberty, and property is the government. This is due to their tremendous police power. The only way for us to preserve (restore?) our rights is to take that power away from the government.

The inspiration for this article was the presentation given by the Law Enforcement Against Prohibition (LEAP) speaker Neill Franklin at the Montgomery County Libertarian Party (PA) Liberty Forum on 4/20/09. This is a great organization composed of courageous individuals trying to right one of the worse wrongs of our time. I thank them for their tireless efforts.

Carry on, I'm with you, my friends at LEAP. Just remember that ending the War on Drugs is merely the first step.