I was discussing the credit crises with someone recently, eventually the discussion moved into the free market.
Something he raised with me was that, the peak of its influence, as well as the closest a society has come to truly free market, seemed to be the industrial revolution and that period of time. His main point was that, if the free market is so great and involves a sort of natural selection, by letting companys fail, always works for the best why do corrupt individuals and activitys seem to always win out? Letting the inhumane and cruel get the best of humanity while at the same time taking away the freedom of the free market by the public’s reaction to this.
Now obviously this is a bit loaded, but my main question which has me puzzled is why does corruption tend to always occur and is there something I am missing in which way a “free market” or free society would prevent this? It seems like a paradox that to allow people freedom is also allowing crime and corruption, which could eventually squash out freedom.
Im sure there is numerous books on this sort of subject I should read, and by all means please recommend me some as I have a very meager introduction to austrian or libertarian thought.
Because those corrupt individuals use the power of the government to get their way. With the power of the law backed by gun-toting jackbooted thugs, you can eliminate a lot of competition.
I think I am talking more along the lines of an evolution of society. That a free market system in the extreme can’t ever seem to exist, yet the closer we get, the more it seems that corruption, and free men acting in an “evil” way, move that society in the opposite direction towards collectivism. Is it inevitable?
First off, what kind of “corruption” is your friend referring to?
Secondly, a free market would tend to stifle corruption due to competition, confrontation by the defrauded, and the ability for the defrauded party to seek justice.
Thirdly, although there is indeed a march towards collectivism right now, it is by no means inevitable. To me, it seems quite the opposite actually, the inevitable is a march away from collectivism. The only thing creating today’s march towards collectivism and the constant down-talking of the free market is the amount of control that anti-free market and collectivist forces have over what people see - and how entrenched those entities have become in the education system.
I have a professor in the university who writes in her materials that the government has to get involved in the market since on the free-market there simply is corruption. Now this is something that definetely doesn’t hold. Corruption can only exist as long there is a position of power that can be abused. On the free-market this is not the case. As long as the market is free the competition takes care of anyone who tries to use his economic ‘resources’ to raise some coercive power.
One could also argue that prefering your relatives for doing business is corruption but that is simply a view a socialist who tends to think that all men are equal in some ‘mystical’ way.
As for the rising corruption when heading towards the free-market, I’d say it’s just an illusion. The corrupt just turn more active when they get closer to their end. When a state seems to be getting rid off corruption it’s just stronger politicians and buerucrats outcompeting each other. The most skilled corrupt survives.
A few years there was an incident when a party here, in the Estonian government tried to start fighting corruption by setting several numerical goals (how many corrupt officials to catch etc.), as usual for the government. The result was that before they could get started the coalition split up and a new government was formed, without this party. Since then the reports say that there is less corruption every year. Now, think for a moment what is wrong with this picture?
This question begs another - is there, in fact, more corruption among private companies as they become freer? Media and government propaganda notwidthstanding, I don’t see and evidence for this. There is no recent empircal evidence one way or the other (because society has not recently become freer anyway), and all theoretical argument points in the opposite direction.
Besides, it might be true that a freer society would have more corruption in the private sector - not likely - but possible, because all the corrupt people currently working in the public sector would become private citizens! The real question to ask is - will there be more or less net corruption? Looking at the scandals of the United States government’s “public servants,” the answer becomes staggeringly clear.
Eastern Europe was (and remains) relatively corrupt to this day. If anyone believes socialism is the cure to corruption, they need their brains checked. Corruption might get the wheels turning though, and bypass useless bureaucracy in some cases.
Good question. The OP does not really clarify. It hints at the worst elements getting to the top, but again it’s non-specific. I’ll hazard a guess that what is meant is nepotism, bribery and the like.