Free Market Capitalism Doesn't Exist (No Seriously, It's An Oxymoronic Myth)
Free Market Capitalism Doesn't Exist (No Seriously, It's An Oxymoronic Myth)
Most people actually hate it but don't even know it
I was cooking supper at a beloved friend’s house on his brand-new stove. It’s a super fancy, super expensive unit, more of an altar than an appliance, with multiple ovens, a warming drawer, and five induction hobs.
Induction cooking freaks me out. I’ve read up on the science behind it but I still don’t get it. Something something magnets = instantly hot, then instantly cold the instant you take the pan off the element. It’s pretty great.
As I marveled over this technology, my friend joked with a Cheshire cat grin:
“It’s just one of the many miracles of free market capitalism.”
I laughed.
Then I realized that, while he was teasing, he also wasn’t joking.
I stopped laughing.
“You know the free market doesn’t actually exist, right?”
Before we can discuss free market capitalism, let’s briefly discuss what capitalism actually isn’t.
It’s not corporations gobbling up other corporations. That’s corporatism.
It’s not companies growing so large that they dictate terms to everyone else. That’s monopoly.
It’s not a small group of rich elites deciding the economic rules. That’s oligarchy.
It’s not people or corporations hoarding property to extract rents and interest from the productive capitalist class. That’s rentierism.
Capitalism is simply the private ownership of property.
(As opposed to communism, which is the common ownership of all property.)
Humans are desperately evil, which is why both all-private ownership and all-public ownership always fail, because tyrants eventually control everything.
(Social democracy is a mixed economy located between the two extremes of all-private and all-public — a democratic attempt to ward off tyrants.)
But back to capitalism.
The word was first used by French socialist Louis Blanc in 1850. He defined it as “the appropriation of capital by some to the exclusion of others.”
Capitalism is taking something public and common (ie land) and appropriating it for private use. (That’s a fancy word for “we stole it by force.”)
The term “free market” first appeared in Scottish philosopher Adam Smith’s 1776 book The Wealth of Nations. He (wrongly) believed democracy shouldn’t interfere, regulate, or protect buyers and sellers in any way, and that an “invisible hand” (seriously) would magically create the best society.
What a nutter!
Free = no rules
Market = humanity
Capitalism = the expropriation of public resources for private use
In other words: A rules-free market is a black market.
You can see why literally no stable country on earth practices free-market capitalism.
Rules-free markets are how you end up with lead paint on children’s toys.
Rules-free markets are how you end up with RBST in dairy products.
Rules-free markets are how you end up with guns in the hands of warlords.
Plus, rules-free markets leave everyone enslaved. Because rules-free markets don’t remain rules-free for long. As soon as one player in the market — almost always a seller — has appropriated enough of the resources, they start dictating terms for everyone else. (That’s how Amazon charges up to 51% of the price of items for sale on its site despite not making the stuff on its site.)
Take away the rules of economics and people get enslaved every time.
“We talk about freedom all the time, but we’ve stopped talking about freedom a long time ago. Now we’re talking about autonomy. Freedom is different than autonomy. Freedom has boundaries. Truth is one of those boundaries. And morality is one of those boundaries. Autonomy is the ability to do whatever you want whenever you want in whatever way you want. The problem is this: If I’m autonomous and another person is autonomous, and I have preferences and those matter more than the truth, and that person has preferences and their preferences matter more than the truth, when two autonomous preference-seeking beings come together and their preferences don’t match, who is going to win? If truth is on the bottom shelf, truth won’t decide. What will decide will be power. And isn’t it ironic that in our quest for “freedom”, someone gets enslaved?” — Abdu Murray
When my friend says his induction stove is a product of “free market capitalism,” he couldn’t be further from the truth.
A rules-free black market didn’t magically invent his oven.
What actually sparked this level of human innovation was a combination of factors including:
getting rid of the parasites (monarchy, aristocracy, and feudalism)
quasi-representative/democratic governments
private property rights
massive investment in near-cost public utilities like water, energy, and rail
laws against illegal economic activity
a stable currency for trading
expansive credit creation
compounding technological gains
massive public investment in infrastructure
massive public investment in defense to create stability for markets to thrive
trade protections
patent protections
copyright protections
trademark protections
In other words: Rules.
So… not a “free” market.
Whoops.
What’s really ironic is that, whether they know it or not, nearly every single sane person on earth actually hates free-market capitalism:
Industrial capitalists hate free-market capitalism because competition kills profit margins (Billionaire Warren Buffett talks about this all the time.)
Monopolists hate free-market capitalism because they don’t want anyone else selling besides themselves (Billionaire Peter Thiel talks about this all the time.)
Land-lorders hate free-market capitalism because they want governments to limit housing supply to drive up rents.
Banksters hate free-market capitalism because they need governments to enforce their “right” to collect interest from people who can’t afford to repay them.
Rentiers hate free-market capitalism because they need governments to enforce their copyrights, trademarks, and registered patents.
Communisms, socialists, and lovers of democracy hate free-market capitalism because clearly, the majority of humanity thinks it’s reasonable and wise to put reasonable and wise constraints on greed.
Ironically, capitalism itself requires rules — private property is only property because of the rules of property rights. Rules-free markets don’t have property rights. Capitalism requires property rights, and free markets require the absence of rules. A market cannot simultaneously be “free” and capitalist. Rules-free markets cannot be capitalist markets. The term “free market capitalism” is an oxymoron for morons.
The only people who genuinely love rules-free markets are voracious predators and destroyers — anti-commons anarchist hyper-individualists.
Clearly, everyone including libertarian hyper-individualist capitalists loves rules, if only the rule of law and the rule of private property rights.
Clearly, it’s a spectrum.
Some of us want rules that say Colgate can’t put arsenic in our toothpaste.
Are we crazy to want that? Should people have to die for the rest of us to discover Colgate is lethal to society? Is that really unreasonable?
Everyone likes some rules — it’s just a spectrum.
Far-right-wingers only cry “free market” when the rules aren’t to their personal liking.
(Ironically, most of today’s free-marketeers have weakly attempted to redefine the “free market” as having some minimal rules… their rules.)
It seems reasonable that all those forced to play a game should have a say in making the rules of that game. Democracy itself is the only truly free market.
In practice, true free market capitalism = oxymoronic anarchy inevitably followed by tyranny.
It’s a really stupid (and evil) way to “structure” a market.
Surely the goal should be a democratic fair rules market.
But no one likes fair rules. Everyone wants a personal advantage.