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 friendâs house on his brand-new stove. Itâs 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. Iâve read up on the science behind it but I still donât get it. Something something magnets = instantly hot, then instantly cold the instant you take the pan off the element. Itâs pretty great.
As I marveled over this technology, my friend joked with a Cheshire cat grin:
âItâs just one of the many miracles of free market capitalism.â
I laughed.
Then I realized that, while he was teasing, he also wasnât joking.
I stopped laughing.
âYou know the free market doesnât actually exist, right?â
Before we can discuss free market capitalism, letâs briefly discuss what capitalism actually isnât.
Itâs not corporations gobbling up other corporations. Thatâs corporatism.
Itâs not companies growing so large that they dictate terms to everyone else. Thatâs monopoly.
Itâs not a small group of rich elites deciding the economic rules. Thatâs oligarchy.
Itâs not people or corporations hoarding property to extract rents and interest from the productive capitalist class. Thatâs 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-publicâââa democratic attempt to ward off tyrants.)
But back to capitalism.Â
The word was first used by French socialist Louis Blanc in 1850. He defined it as âthe appropriation of capital by some to the exclusion of others.â
Capitalism is taking something public and common (ie land) and appropriating it for private use. (Thatâs a fancy word for âwe stole it by force.â)
The term âfree marketâ first appeared in Scottish philosopher Adam Smithâs 1776 book The Wealth of Nations. He (wrongly) believed democracy shouldnât interfere, regulate, or protect buyers and sellers in any way, and that an âinvisible handâ (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 childrenâs 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 donât remain rules-free for long. As soon as one player in the marketâââalmost always a sellerâââhas appropriated enough of the resources, they start dictating terms for everyone else. (Thatâs 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.Â
âWe talk about freedom all the time, but weâve stopped talking about freedom a long time ago. Now weâre 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 Iâm 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 donât match, who is going to win? If truth is on the bottom shelf, truth wonât decide. What will decide will be power. And isnât it ironic that in our quest for âfreedomâ, someone gets enslaved?ââââAbdu Murray
When my friend says his induction stove is a product of âfree market capitalism,â he couldnât be further from the truth.Â
A rules-free black market didnât 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 âfreeâ market.
Whoops.
Whatâs 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 donât 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 ârightâ to collect interest from people who canât 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 itâs reasonable and wise to put reasonable and wise constraints on greed.
Ironically, capitalism itself requires rulesâââprivate property is only property because of the rules of property rights. Rules-free markets donât have property rights. Capitalism requires property rights, and free markets require the absence of rules. A market cannot simultaneously be âfreeâ and capitalist. Rules-free markets cannot be capitalist markets. The term âfree market capitalismâ is an oxymoron for morons.
The only people who genuinely love rules-free markets are voracious predators and destroyersâââanti-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, itâs a spectrum.
Some of us want rules that say Colgate canât 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 rulesâââitâs just a spectrum.Â
Far-right-wingers only cry âfree marketâ when the rules arenât to their personal liking.
(Ironically, most of todayâs free-marketeers have weakly attempted to redefine the âfree marketâ 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.
Itâs a really stupid (and evil) way to âstructureâ a market.
Surely the goal should be a democratic fair rules market.
But no one likes fair rules. Everyone wants a personal advantage.