"Free market capitalism!" Sounds sorta good, kind of liberating, all about freedom and all. That's where the libertarians got their name, apparently, as that's what they advocate. But wait, what exactly IS a free market? Do they really exist, and if they do, are they a good thing or not so good?
Let's concede there may be free markets in small isolated settings. Think of a farmer's market where the producer supplies directly to the consumer. They agree over the price of the goods, full disclosure about the quality of the goods and each is free to walk away from the deal if they choose. The price may be paid in money or barter. And both parties to the transaction are known and accountable to the other.
But in modern America there are virtually no real free markets. In our transactions today, one party or the other has the upper hand. Markets must be defined, enabled and regulated to some extent by governments federal, state and local, for good reasons. Some regulations are intended to protect consumers, i.e., human beings, and some protect the environment in which all living things reside. And some regulation is intended to help businesses operate, to give good business owners guidance as to how to proceed with their chosen occupation.
In my working career, I managed a metropolitan food safety and inspection program. The prime purpose of the regulations we enforced was to protect consumers from food- and water- borne illness. What I learned from restaurateurs and food suppliers was that the good ones, the ones who sought to provide a safe and tasty product, didn't resent our being there, looking over their shoulders, pointing out this or that to improve upon. On the contrary, they knew that good sanitation brought customers in their door. And they saw how quickly something like a food-borne illness outbreak could put them out of business. (This really happened to some fancy, up-scale restaurants.)
The "good guy" food purveyors asked of us at the health department these three things: That the regulations be based on the science of food safety not on hunches or opinions; that we first educate them before enforcement; and that the regulations be applied equally to them as to their competitors. We tried to live up to those standards and, for the most part, they held up their end of the bargain. Those who fought regulation were the ones who wanted to be free to make money whether or not people suffered.
Notice how calls for free market capitalism are always couched in terms of personal, individual, human-being freedom. That's not what they're talking about, however; it's not about the freedom of individual persons to life, liberty and the pursuit of happiness. It's not even so much about the economic freedom of individuals to purchase as they can and want. The call for free market capitalism is a call to liberate businesses from control, to leave them free to make money at the expense of human beings.
In the libertarian topsy-turvy world, businesses have priority over people, over living, breathing human beings. Does that match your reality? Not mine. Businesses are created by humans to help us go about our day, meet our needs, live our lives. It's "we, the people" who should be in control and are given priority under the US Constitution through which we empower our government to regulate businesses. Despite the recent opinion of the capitalist-friendly US Supreme Court, businesses are not people.
Free market capitalism brought us the "great depression" of the early 20th Century. The stock market and capitalists took advantage to the detriment of our economy. Perhaps someone didn't remember, or it had just been too long ago, but in the 1980s deregulation and free market capitalism re infected public policy. "Government was the problem, not the solution," we were told and "Greed is good." We looked to the stock market to tell us how "the economy" was doing, instead of focusing on the real economy of creating and distributing goods and services.
In the quarter century since then, infection has turned virulent, and it seems all wounds are festering at once these days. The lack of control over the health insurance industry resulted in millions excluded from coverage; thousands have died. The stock market was left free to trade fake assets. The mortgage industry was allowed to rope people into debts they could not pay. Banks were allowed to gamble with our invested dollars and credit card companies were free to inflate rates and add fees. Corporations were free to outsource jobs to other countries. Trade agreements gave advantage to capital over labor. Unions were busted. Heavy industries, especially energy, were allowed to cut corners on things like mine safety and oil drillers could write their own regulations. And it's a "mell of a hess" we're in now, folks. Thank a libertarian next time you see one.
Libertarian economic policy just does not work, and the reason it does not is because it ignores this simple principle any businessman knows: The first purpose of a business is to make money. I'm not putting that down as a bad thing; it's entirely natural. Furthermore, businesses also have other goals, such as helping people and making our communities better. It's just that, unless they meet their first purpose, they can't serve any other purposes.
Furthermore, the larger the business, the more divorced from the secondary missions the first purpose becomes. It becomes more and more about money because more and more money is at stake. Capitalists will fight harder against regulation than will local small businesses. They'll buy media outlets to influence public opinion and skew the information we get. They'll spend millions every day, day after day, manipulating elections and elected officials. And they will demonize anyone who would, through regulation, restrain their primary purpose by calling them socialists and communists and accusing them of taking over health care, being un-American, etc. Sound familiar?
But notice that, come a crisis, libertarians will be quick to demand that the old evil government step in to make things right. And this they do without even the grace to admit they caused the problem in the first place. No wonder several economists have recently said word to the effect that "there are no atheists in foxholes and no libertarians in crises." Free market capitalism will certainly drive us into a ditch, as it has done once again, but it can't get us out of it.