The “Free Market”: Confusing the Means with the End

The question of whether (and how) we should trust industry is a uniquely American debate. It’s also one that history resolved for us, about a century back.

The answer (are you surprised to know?) is, not overly. Given free reign, and a bit of economic power, our own countrymen see no fault in crushing striking employees with private armies, locking child workers in burning buildings, and the list goes on, just to push the profit margin a little higher.

Yet a few short weeks ago, the American right looked at the BP oil spill, and asked not how to heal the damaged land or its inhabitants, but, how Obama could justify his “cruelty” to BP. The free market will demand that BP remedy the damage it’s caused; why get in its way?

Because the free market doesn’t work that way (and hasn’t, here: BP is already backtracking on promised payments). Why do we suddenly think it does, again?

The resurgence of this debate, via the tea parties, can be attributed to the fact that the Progressive Era has become a victim of its own success. Though Glenn Beck et al hope to obscure this background, the Progressive Era, and the sweeping reforms it created, weren’t a primary movement, and didn’t spring ex nihilo from the mind of Woodrow Wilson — the socialist supervillain in Beck’s counterfactual narrative. They were reactions to real problems in the world, caused by unrestrained corporatism (remember The Jungle?). And they worked. You don’t see as many blatant abuses of corporate power these days; well, at least not of the same order (securities fraud is the new filled milk).

Because the Progressive Era worked, we now have the liberty to question whether it was necessary. But you don’t tear down a wall just because you can’t see the barbarians anymore. And you don’t question the thinking that led you to build it in the first place.

In fact it might be time to go back to the origins of the debate. On that note, consider this: the free market is not its own good, and the word “free” doesn’t automatically make the following noun a quintessential American value. The free market is a tool for the vindication of other values — and a good, even a vital one. But we value the free market to the extent that it creates valuable competition and progress, and no farther, and err when we start propping it up for its own sake. No man does (or should) have the “freedom” to sell a defective product and hope to get away with it — whether the product be medicine, or a share in a collateralized debt obligation — and it’s not patriotic to fight for that imagined right.

If we hope to extricate ourselves from our current predicament, we need to take this lesson to heart, end the quasi-religious belief that “The Free Market” is the answer to every question, and stop framing the debate over every regulation as an absolutist choice between “freedom” and “socialism.” That might mean getting past the Republican Party, and what it’s become.

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17 comments

  1. Just as a point of reference, you might want to put this in past tense:

    “Given free reign, and a bit of economic power, our own countrymen see no fault in crushing striking employees with private armies, locking child workers in burning buildings, and the list goes on, just to push the profit margin a little higher.”

    As to your general point, yeah, we all get it. Some regulations are good and a free-market left unchecked can be a dangerous thing. While conservatives can certainly be guilty of opposing every regaultion that comes down the pike no matter how well-intentioned, isn’t it responsible to also point out that regulation scan be taken to extremes (and are)? A recent example is the soda bans in San Francisco and other nonsense that is on the table. Trans fat, salt, etc. What happened to letting consumers decide with their wallets? This nanny-state stuff is exactly what conservatives fear.

    As I’ve stated many times, most liberal ideas come from a good place but the Left always overreaches. That’s why we have a Right. Someone has to check that excess. If liberals propose a 50% tax increase on a good that is harming the environment but also has a lot of jobs tied to it and then conservatives resist until it is taken down to a more reasonable 20%…maybe that’s when the two-party system works. If you recall, TR was a champion of reform as well, but he didn’t let regulation go so far as to hurt industries and he hammered that point repeatedly in speeches. Regulation must not destroy industry or innovation.

  2. But you don’t tear down a wall just because you can’t see the barbarians anymore.

    I’ll have to “borrow” that line sometime…

    Mike – yes, regulation can get carried away. Again, the solution isn’t to tear down the wall, the solution is to put more gates in it and change the hours of operation.

  3. Borrow away!

    And yeah, “regulation is good but overdoing it is bad” is almost tautologically true. I’m not sure much of what we’ve done, though, is overdoing it. The San Francisco soft drink ban — which affects only city premises — is probably dumb. But the transfat ban in New York City, at least, hasn’t impacted anyone in any major way except positively. The Krispy Kremes are still just as delicious, I assure.

    And, “the left always overreaches” is either wrong of equally applicable to all parties. What were the Bush years but one long overreach?

    1. If only the Left moves forward, how can the Right be guilty of overeach? I thought you all had the market cornered on ‘progress’ ?

      1. “Forward” is not the only kind of movement, Mike. I hope this clears up your confusion.

        1. And ‘forward’ is not always positive movement either.

        2. But “backwards” only rarely.

    2. Ahhh sophistry. The only prerequisite for overreach, it seems to me, is that one have a goal that they would follow in the absence of an opponent.

      1. I had to re-read that like 10 times but if I understand you correctly you are saying that its only overreach if you’re takng an action when there is no need for that action? Is that a correct translation?

  4. oneiroi · ·

    I get very frustrated with this whole issue.

    For the free market to work, there have to be repercussions for corporations acting against the public well being. Yet, conservatives who praise the free market, inevitably end be apologists for corporations at almost every level (courts, fault, regulation, fines, public anger, etc.)

    Which to me, furthers an atmosphere where corporations continue to get by by putting profit in front of people, further eroding a working “free market” system.

    IMO.

    1. “For the free market to work, there have to be repercussions for corporations acting against the public well being. “

      I think you have to define ‘public well being’. A liberal might say that means limiting profits and increasing pay. Doing charitable giving. Taking a hit on profits to be more green, etc. A conservative might say that means not polluting and not stealing from shareholders or cooking your books. It’s important to know just what you are looking for from the average company and I’m not talking about Enron or BP…I’m talking about an average company that isn’t involved in some financial or evironmental disaster. What is their responsibility to the public (if any)? And if that responsibility is more moral than legal, how do you force it?

  5. CommiusRex · ·

    “The question of whether (and how) we should trust industry is a uniquely American debate.”

    Uh… what? I generally agree with your post, but the idea that this is uniquely American is simply bizarre. I seem to remember a post some time back where you stated that populism was similarly uniquely American. Again, what? Either I’m somehow badly misunderstanding you, or you seem to think that outside the US no-one debates whether (and how much) to trust industry, or uses populism for political ends. I can assure you, these things happen all over the world

    1. Perhaps Ames thinks socialism is more entrenched in foreign countries than it actually is.

    2. I should’ve been clearer. What I mean is that it’s a unique part of the American experience, not that it’s unique among all countries ever. That would be silly indeed.

      1. But that doesn’t make sense. I could say that apple pie is a ‘unique part of the American experience’. Basically, you could apply that terminology, as you define it, to anything that takes place within our shores.

      2. That’s true; but populism is definitional for a large part of the 19th-20th centuries.

        1. We’re talking about trust of industry. I think it’s fairly debatable whether or not that constitutes ‘populism’ but even if it does, how is populism any more unique to the American experience than apple pie?

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