We all know the refrain from the right-wing pundits: “Free Market, Free Market, Free Market!” They throw the term around like a mantra, as though it is some magical solution to all of the world’s problems. Whatever the argument, the “free market” is the solution to them. The problem is, what they call the “free market” is not very free at all.
The term free market is actually from a school of Socialism, called Market Socialism, which was popular in the 1930’s and was put forward by notable economists such as H.D. Dickenson, Leon Walras, Enrico Barone, Oskar R. Lange and Fred M. Taylor. This was popular in certain intellectual circles until the 1960’s, when Milton Friedman co-opted the term for his essays, “Capitalism and Freedom.” What is now called the free market is actually laissez-faire, the elimination of any government influence in the market. The only role for the government in the system would be for the protection of property rights.
The problem, of course, is that laissez-faire fails every time it is tried. The grand laissez-faire experiments in the Americas during the late 1800’s resulted in the most devastating economic collapses, the last of which we now call the Great Depression. But the lessons of history are never learned by some people, who will insist that “we did not do it free enough” and, in effect, blame the victims of the hedonistic greed which results from the enacting of “free market” policies. The common problem for fundamentalists is that they cannot admit when they are in error, else they deny their own faith. When things go wrong, it is because they did not try hard enough, not that their root concepts themselves are at fault.
What we need is not a “free market” where there is no freedom for anyone but those with the monopolies which will invariably develop from it. The Friedman “Free Market” offers no safety, no rules, none of that. The moment any edge is found, it can be exploited by the unscrupulous to develop a monopoly, with the result being that the market itself becomes unstable, and will eventually self destruct.
The other problem with the free market is that it makes no accommodation for the commons. The commons is a very old concept, pre-dating even colonial America, existing in English common law as far back as 800 AD. Simply put, the commons are resources owned by all which cannot realistically be “sold.” A good example would be the radio frequencies which pass in and around and through us all. We all collectively “own” them, as it were. Our elected officials “slice” them up for companies to use, say for a radio station at frequency 103.1 on your dial, but the rights to them stay owned by us all. They pay us, the people, for the right for that particular section of the radio spectrum. In laissez-faire, there would be no commons, and things such as the radio spectrum would be unusable in its entirety, due to encroachment by other ventures. Say you wanted 103.1, but someone else was on that frequency. There would be no agency able to prevent both of you broadcasting on the same frequency, with the result being that nobody could listen to either of you. Some might claim that property rights would settle the matter, but there is no “property” to speak of in this case. It is literally invisible waves, with nothing to prevent duplication or overlapping of services. To prevent it, you must have strong regulation, which is verboten in a laissez-faire system.
What we need is a fair market, one where everyone can play by the rules, where all have the same opportunities. The laws are there to make sure that no one company can exploit its position to the detriment of the market as a whole. No one group can become a monopoly, hogging the majority of a resource; including capital itself. Where a monopoly is inevitable, or one where capitalism cannot work, then that shall be removed from the market and be part of the commons. There is no capitalism for sewers, for there is not enough room underground to run competing sewer lines to every house in the country, so that would be part of the commons. There is no market for healthcare, because for there to be a market there would need to be choice. The choice of healthcare is live or die, not a choice at all, so it cannot operate in a competitive market.
This was what our founding fathers knew and accepted. They called it the “American School of Economics.” It was formulated by Alexander Hamilton himself while he worked under President Washington. It was while we followed the American system that the United States grew to the world’s largest economy, surpassing Great Britain in 1880, only to fall apart a few years later when the laissez-faire proponents took over. One of the premier pieces on the American School was written by Henry Clay, one of Abraham Lincoln’s advisers, in his book “The Harmony of Interest,” published in 1851.
For people who claim to be in touch with the founding fathers, their work and ideas of capitalism are based not on what the founders themselves believed, but instead on what the French under Louis XV enacted for their economic system. The problem was, this system enabled corruption, with the result being that the entire economy collapsed for the poorest of the French citizenry. By the time his grandson, Louis XVI, had taken the crown, the majority of the French citizenry were in abject poverty, it had all been taken by the aristocracy under laissez-faire. When faced with the problems after taking the crown in 1775, he did not reject laissez-faire, but instead proclaimed that the nation had not been emphatic enough in their embrace of it, so he pushed for even more government de-regulation and even more tax cuts for the wealthy (nobles paid no taxes by 1783), which created an even wealthier aristocracy, and even more poor as taxes had to be raised to pay for an incredibly high debt caused by the tax cuts on the wealthy. So, even as he gave the poor unprecedented liberties, such as the freedom of religion and even reformed the nation from an absolute monarchy to a constitutional monarchy, it did not matter. The poor had nothing left, and when people have nothing to live for, they have no reason not to revolt.
Louis XVI was executed on the 21st of January, 1793.