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".

Michael Lind Is Right: Libertarianism Doesn't Work

What? Has the International Libertarian gone crazy? No, here's the story. Michael Lind published a couple of articles trying desperately to discredit libertarianism. (See The Question Libertarians Just Can’t Answer and Grow Up, Libertarians) He thinks that his question addressed to libertarians, “If your approach is so great, why hasn’t any country anywhere in the world ever tried it?” is just devastating. Jacob Hornberger compiled a list of libertarian responses and wrote a good answer of his own in his blog entry A Response to Michael Lind.

Here is the devastating response. When Mr. Lind asks about a country he is talking about a nation-state with a government. That means all the corruption and violence that governments bring with them. That is what is at the heart of the matter.

A shirt worn by a protester illegally selling raw milk and lemonade. Is this what makes libertarianism so bad to Mr. Lind?

Could the financial institutions enjoy their cartel status without the government created Federal Reserve System? No, of course not.

Could the defense contractors enjoy their gravy train without all that government spending and warmongering? No, so libertarianism isn't for them.

Could the law enforcement and legal establishments continue to prosper without the government's war on drugs. No, true liberty would be very bad for them.

Could the people that want to live off of the welfare state continue to do so without the government's largess? No, libertarianism would mean real work instead.

Could the education establishment continue to live high on the hog without the government pouring money into its coffers? No, obviously not.

There you have it, libertarianism really doesn't work for the special interests that want to use government force to enrich themselves at others expense. It also doesn't work for the politicians who want to cater to these special interests. They can't do any of this in a free market. That's why Mr. Lind is right, since libertarianism doesn't work for all of these entrenched interests they make sure there isn't a libertarian country around. Thomas Paine summed it up in his book The Rights of Man:

…the portion of liberty enjoyed in England is just enough to enslave a country more productively than by despotism, and that as the real object of all despotism is revenue, a government so formed obtains more than it could do either by direct despotism, or in a full state of freedom, and is, therefore on the ground of interest, opposed to both.

Instead of getting upset libertarians should thank Mr. Lind for his articles. No longer can statists claim that our present (and many) problems are due to some libertarian free market. Mr. Lind establishes very clearly that there is none anywhere in the world. The blame must lie elsewhere. Perhaps in the mixed economy he so loves? It looks like that is what has failed those of us not living off of the government's profligacy. Hmm...that libertarian society just keeps looking better all the time! Thank you, Mr. Lind.

Occupy Philadelphia: The Kick That the Left Really Needed

“The kick that the left really needed “ are the words of one of the protesters. These are high hopes that will not be realized. Who are these Occupy Philly people? What do they stand for? Who do they represent? Let’s take a look. In the video below there are two interviews with participants in the Occupy Philadelphia movement and a Karl Marx impersonator that performed there. These are the first three parts of the video after the brief introduction. I recommend watching them before reading on. The second half of the video isn’t as relevant to this article as the first half is and can be viewed later.

For the most part what one sees in these interviews is a complete lack of understanding (deliberate misrepresentation?) of what capitalism is and what it has achieved. Every time it, capitalism, is criticized the criticism is that the government intervenes on behalf of the corporate elite. While this is true it also misses the essential point that capitalism is about markets free from government interference. What they are criticizing is actually the corporatist system that we have today, a system that more closely resembles fascism than anything else.

In the first interview Brandon of Philly Socialists talks about how our economic system is the same capitalist system now as it was two hundred years ago, a rather strange point of view. How can one miss the fact that the vast majority of the alphabet soup of regulatory agencies that we suffer under now was created in the twentieth century? How can one not see the vastly larger share of Gross Domestic Product that the government now absorbs? There were very few regulatory agencies in the early days of the republic, often no central bank, and very low levels of taxation. There were also no Robber Barons and a growing economy based much more on local businesses than today. While not perfect it was better than, and a far cry from, our present corporatism.

Rich, a registered nurse, is in the second interview. He advocates protectionism, an idea long ago debunked. (See “Protectionism and Communism”) More importantly Rich claims that the regulation of the medical profession is an illusion. That it is really the corporate elite that writes the rules for their own benefit and controls the regulators through the political process. Up to that point he’s right, but to claim that this means that there is no regulation and that this represents too little government involvement in health care is way off base. Pro business regulation is still regulation. The government is heavily involved, it’s just not doing what it is supposed to do. This is not a problem that is fixable, this is the nature of the beast. The ruling elites will always control the regulators. The only solution is a free market in health care. That means no government regulation or licensing.

Lastly, we come to the Karl Marx impersonator. He repeated the canard that the problem with the free market is the government intervening on behalf of the elites. In a conversation after his performance he acknowledged that that is not actually a free market but what the crowd thinks it is, therefore, his use of the term free market. An interesting admission. Very enlightening was his praise of the Paris Commune of 1871.  My impression is that this is the model they’re trying to emulate in the Occupy Movement.

All of this leads to a few conclusions about Occupy Philadelphia. Since, fortunately, 99% of the people aren’t socialists what we really have here is the .01% claiming to be the representatives of the majority when in reality they are only helping the 1% that rule over us. They are completely ignorant of economics and, therefore, don’t understand why things are going wrong. They cling to the view that government can be made to work if only…whatever, but it’s not that way. In advocating empowering the government so that it will become the “dictatorship of the proletariat” they only play into the hands of the 1% they claim to oppose. Why is the left always so willing to allow itself to be played? They should know by now that the elites will always control the government.

In the end Occupy Philadelphia only manages to discredit itself by presenting stale old statist ideas that have been proved time and again not to work. I ask them to step aside and let those with real solutions, the advocates of liberty, take the lead.