Have You Accepted the Free Market as Your Personal Savior?
Hello, friend. I’m knocking on your door today to ask whether you have accepted the free market as your personal savior. If you haven’t, I’m here to share the good news.
I am, obviously, riffing on the latest talking point from the nationalist conservatives, who have formed a new think tank based on the complaint that American politics is dominated by “free-market fundamentalism.” Please try not to laugh.
It’s not just that this is a ridiculous straw man—advocates of the free market have spent our entire lives being ignored by politicians. It’s the fact that this is a sneering way of implying that confidence in markets is a form of dangerous dogmatism. It is an attempt to portray free-market economics as some kind of fanatical leap of faith, rather than a body of knowledge grounded in observation of the remarkable achievements of capitalism over the centuries—not to mention the failure of every other system.
It’s an attempt to accuse somebody else of dogmatism, while they are the ones closing their minds to the evidence.
The most remarkable fact of the last two centuries is the conquest of poverty. We adopted a system of property rights and largely free, unregulated markets—first in the America and Western Europe, later in Asia and elsewhere—and instead of a hellscape of poverty and oppression, we got this:
We got a vast increase in wealth and the hitherto unknown phenomenon of mass prosperity, in which the majority of people are able to provide themselves not just with the bare necessities of life, but with things that had previously been considered luxuries.
And not only do we have more and better stuff. We also put in a lot less work for it. A mechanized economy no longer runs on heavy physical labor, working hours have dropped, and there are now more white-collar jobs than blue-collar jobs. I say that, not to run down blue-collar jobs, but to point out that the average person has a lot more options, and if you don’t want to work with your hands, you probably don’t have to.
I was only half-joking when I described the market as your “personal savior.” Free markets have saved you, individually, from a life of poverty and drudgery. Capitalism has saved you from the hopelessness of a constant struggle with hunger and the limited opportunities of a world in which the vast majority of people were required to toil long hours in the fields just to survive.
No, economics is not the only source of meaning in life. But it is one important source of meaning; consider how much of our lives we spend on our work and careers. And in providing us with wealth and leisure time, economic progress makes all the other sources of meaning easier to access and pursue. I’m going to recommend one more time that everyone read Steven Pinker’s book Enlightenment Now. I don’t agree with all of his conclusions, but he exhaustively demonstrates the vast improvement in human life over the past two centuries. That improvement is most easily measured in terms of increased wealth, but wealth leads to improvements that have an intellectual, psychological, and spiritual dimension: more education, more leisure time, greater access to art, less violence, even an increase in average IQ.
Your life under capitalism is not just wealthier, it’s richer in every sense. Or at least the free market has made it possible for you to fill your life with things that are meaningful. If you are not doing so, that’s your choice. It is not something imposed on you by market forces, which have actually worked to provide you with more options in life, not fewer.
And did I mention the failure of the other systems? Various utopian schemes have been adopted over the years that were supposed to deliver all of these benefits, but without the nuisances of money, prices, markets, and the freedom to trade. They have all failed. A society that consistently rejects the mechanisms of the marketplace ends up like Venezuela, which crashed from relative prosperity to destitute poverty in a surprisingly short period of time.
The people who sneer about “free-market fundamentalism” are not Bernie Bros itching to run the camps in the Glorious People’s Republic. Some of them are conservatives who merely want to chisel away at markets here and there in the hope that just a tiny bit more government regulation will make America great again.
There is a sense in which free-marketers are “fundamentalist”: we start from fundamental principles learned through centuries of observation and experience. These principles of economics warn us about the limited knowledge of central planners and authoritarians, the unintended consequences of supposedly well-meaning regulations, and the intended consequences of hucksters looking to use political pressure to prop up their pet projects.
That’s what leads us to this latest broadside against free markets, which comes from Oren Cass, who is a conservative advocate of “industrial policy,” which means, in practice, that he wants the government to put its thumbs on the economic scales only piecemeal, depending on which industries and companies the guy in charge wants to help or punish. What Cass is advocating, in other words, is a form of crony capitalism: Free markets for everybody—except politically-connected insiders, who get the markets rigged in their favor.
We have a certain amount of experience to show us how honestly and impartially such favors are doled out.
If we want to talk about the fundamentals of the free market, we should note that free-market economics were born and adopted as part of a system of political freedom and individual rights, and the earliest advocates of laissez-faire were also crusaders against corruption and oppression.
The moral principle behind markets is the idea that free people should be able to make their own choices about how they live and what they buy, rather than having preferences pushed down on them from above by populist politicians or arrogant technocrats—or those, like the nationalist conservatives, who manage the trick of being both of these things at the same time.
The “fundamentalism” behind free markets is the suspicion the alternative requires coercion, rather than free choice, as the organizing principle of human affairs. This is what the nationalists are really after. When they rail against “free-market fundamentalism,” what they really mean is: Don’t raise any moral qualms about my favored form of coercion.
If the point of condemning “free-market fundamentalists” is that many conservatives aren’t comfortable rejecting all government controls—how can they imagine that they are in any immediate danger on that score? I would gladly spend time with them in Libertarian Debate Club arguing against every last form of government regulation, making the case for private roads, and showing how we could totally fund the government without any taxes. But those aren’t the debates we’re going to be having any time soon.
Instead, our debates are going to be about how to pay for massive entitlement programs when they go bankrupt and how to deal with the (allegedly) unintended consequences of the latest poorly thought-out scheme to shut down trade or take over an industry. Our current problems arise from far too little regard for the fundamentals of the free market.
Advocates of the free market know that it will take a long time to get to our Promised Land, and we’ve given up expecting the laissez-faire utopia in our lifetimes. We would be happy just to see more humility on the part of would-be planners about the brilliance of their schemes. We would like them to recognize that their plan to raise the wages of Uber drivers might just end up putting a whole bunch of free-lancers out of work, or that their plot to use tariffs to revive factory jobs might actually result in a manufacturing recession.
All we ask is that you make a little room in your hearts for the good news about markets and capitalism. Economic policy should start, not with a sneering dismissal of the free market, but with a recognition that capitalism has brought us to a very high level of freedom and prosperity, one unprecedented in all of human history.
It has raised us up out of bondage and made us great among the nations of the earth. And we should not be too eager to sin against it.