jump to example.com

Does ‘free market’ even mean anything?

economic-forecast-header | @KevinCarson1 | Support this author on Patreon

Whenever you read the words “our free market system,” it should raise a red flag. See, for example an article titled “Nobel Prize Economists Say Free Market Competition Rewards Deception and Manipulation,” by George Akerlof and Robert Shiller (Evonomics, Jan. 6). Now, if “free market” means anything, it means an economy where all market exchange is free and voluntary, without coercive constraint. But as used in mainstream discourse, “the free market” means something like “neoliberal capitalism” or “the kind of corporate economy we have right now.” When right-wing politicians and talking heads, and mainstream (i.e. right-wing) libertarians defend the ungodly power and profits of big business against criticism, they refer to “our free market system.” And all too many critics of capitalism — although not all — slip into the lazy habit of referring to neoliberal corporate capitalism as “the free market.”

As an example of the latter, Akerlof and Shiller argue that “our free market system” by its very nature “tends to spawn manipulation and deception.” And what they describe — “[i]f business people behave in the purely selfish and self-serving way that economic theory assumes” — is an economy in which economic actors are abstract “economic men” and most productive and distributive functions are mediated by the cash nexus. But there have been markets throughout most of human history. And many of the societies in which market exchange has existed have arguably been a lot freer than the one we live in now. But societies in which everything is mediated by the cash nexus, and most economic functions are performed by for-profit business firms, are a relatively recent phenomenon of the capitalist era and — according to anthropologist David Graeber — totally a creation of the modern state. So what Akerlof and Shiller describe is actually a system created by massive state brutality, and maintained by ongoing state intervention, that grossly distorts spontaneous human social relations. What does their use of “free market”add to this?

And what, in practical terms, does a “free market system” even mean? Is a political-economic-social system in which the overwhelming majority of landed property can be traced back to state engrossment and land grants to privileged classes, and the enclosure of vacant and unimproved land by absentee landlords, and the rightful owners (i.e. the actual occupants, users and cultivators) pay tribute to them, a “free market”? Is a system where title to most of the world’s mineral and energy reserves dates to colonial robbery a “free market”? Is a system where the majority of profit depends on patents and copyrights — i.e., a state restriction on the right to copy information or designs — a “free market”? Is a system where the state limits competition, and most industries are dominated by a handful of corporations with administered pricing and collusive suppression of innovation a “free market”? Is a system where the majority of corporations would be running in red ink if the state weren’t socializing a major share of their operating costs and risks a “free market”?

If it is, the term “free market” doesn’t mean much. On the other hand if “free market” means anything, the present system is not a free market. It’s a system where capitalists and landlords control the state, and the main function of the state is to guarantee profits and rents to the propertied classes.

The only conclusion I can draw is that “free market,” as the overwhelming majority of people in mainstream discourse use it, simply means “the system we have now,” as opposed to (maybe?) Social Democracy or an idealized New Deal economy. But what we have now is arguably as statist  as the New Deal or Western European Social Democracy ever was — it’s just that less of the state intervention is on the side of labor unions and the poor.

Some folks on the Left like Naomi Klein and Dean Baker recognize a distinction between “corporatism,” or the “corporate welfare,” and the “free market.” And some on the right are fond of responding to left-wing critics by saying “Oh, that’s corporatism (or crony capitalism), not capitalism.” But the latter, at least, do it as just a hand-waving gesture to acknowledge a few outlying phenomena like the Export-Import Bank or somesuch, while defending the core of the existing system as legitimate.

That’s nonsense. There is no “free market system.” There never has been. Despite the efforts of some on the Right to pretend that some period in the past has at least approximated laissez-faire, capitalism — the system that replaced feudalism 500 years or so ago — was founded on massive robbery, aggression and enslavement, and has been statist to its core ever since.

If politicians and talking heads, or academic intellectuals, want to talk about corporate capitalism, by all means let them do so. But stop talking as if the system we live under has anything to do with freedom.

   
Discussion
 
Highlights

Street Knowledge with Chris Graham: Libertarian gubernatorial nominee Cliff Hyra

Chris Graham interviews Libertarian gubernatorial nominee Cliff Hyra.

Another new poll gives Northam big lead in Virginia governor race

One Virginia governor race poll released yesterday had Democrat Ralph Northam and Republican Ed Gillespie tied.

Poll: Trump unpopular in Virginia

President Donald Trump is well under water among Virginia voters, according to new poll results released by the University of Mary Washington.

The Petty Hearts bring Tom Petty tribute to Wayne Theatre on Sept. 22

Tom Petty tribute band The Petty Hearts are coming to the Wayne Theatre on Friday, Sept. 22.

Virginia Chili, Blues n' Brews Festival set for Saturday

The Virginia Chili, Blues n' Brews Festival will celebrate its 10th anniversary on Saturday in Downtown Waynesboro.

Events Calendar

Upcoming events in the Shenandoah Valley, Central Virginia and statewide from the Augusta Free Press Events Calendar. Don't see your event listed? Email augustafreepress2@gmail.com.

UVA alum Chris Long to donate first six NFL game checks to fund scholarships

The Chris Long Foundation announced today that Philadelphia Eagles defensive end Chris Long will donate his first six game checks of the 2017 NFL season to fund two scholarships in his hometown of Charlottesville.

Game Preview: VMI, Chattanooga look to get back on track on Saturday

VMI knew the 2017 football season was going to be a rebuilding year. Chattanooga, coming off a playoff appearance in 2016, had its usual high expectations.

Game Preview: UVA has a chance at Boise State

Vegas and the ESPN Power Index don’t give UVA much of a chance to win at Boise State on Friday night.

Street Knowledge with Chris Graham: First look at UVA-Boise State

Chris Graham and Scott German take a first look at the UVA-Boise State game set for Friday night.

Web Design, Marketing

Augusta Free Press LLC provides clients in the Shenandoah Valley and Central Virginia and beyond with marketing and PR solutions including web design, TV/radio, social media and overall marketing campaign design and implementation.

   
Recent Posts
   
Your One-Stop Media Shop
Augusta Free Press LLC provides clients in the Shenandoah Valley and Central Virginia and beyond with marketing and PR solutions including web design, magazine/brochure, TV/radio, social media and overall marketing campaign design and implementation.
  • Web Design

    You want a new website, but don’t have the first clue as to how to build one. That’s our job. We take care of all facets of web design – visual design, layout design and content development. Get your business online for as little as $1,299.
    Learn more about AFP Web Design services.
  • Graphic Design

    The staff at Augusta Free Press Publishing has been recognized by the Virginia Press Association for excellence in layout and design. Whether you need a fresh business card design, rack card, ad, flyer or full magazine design, we can help with all your graphic-design needs.
    Learn more about AFP Graphic Design services.
  • Marketing

    Augusta Free Press manages advertising campaigns for small- and medium-sized businesses across Virginia. You don’t need to hire a full-time marketing coordinator. Bring the experience of the Augusta Free Press team to work for you – for a fraction of the cost.
    Learn more about AFP Marketing services.