I’ve come across this criticism of free market economics, although I have heard it elsewhere, and have pondered it through. Here is the direct text (all elipses belong to the author; I am not skipping other information):
It’s all qualified by the statement “in a truly free market”…And with that statement you instantly render all further arguments meaningless…because a “truly free market”…is by it’s own very nature..a meaningless statement.
because it’s an impossibility…a fantasy…a utopian dream. Every bit as much as communism. The problem with all the “isms” (except for one) is that they try to sell you a perfect end point. Much in the same way as religion tries to sell you an answer that wraps up all the unknowns into a neat understandable package. Well humanity and it’s social constructs are not predictable in any way. The free market is NOT a “natural force”. It’s a creation of man
So what do you think? Is the term an imaginary premise rendering all further discussion as useless? Or is it a necessary phrase, indicating the absence of aggression (government regulation), serving as a necessary, and logically sound, premise?
From other writings (outside the conversation in which I found this text) the author seems to be an Anarcho-Syndicalist as he is very quick to cite Noam Chomsky as an authority on free markets.
I don’t see how he’s making any argument. He’s just asserting and re-asserting that the phrase “truly free market” is “meaningless” because it’s “utopian”. Where is his support for this assertion?
Well, I think “truly free market” is a pretty crappy label. It arises because of the canard that the US is “free market” and the economic collapse of the US is supposed to prove the “unsustainability” of capitalism and the free market. So, proponents of free markets have now resorted to calling them truly free markets.
I would stick to “the free market” or “capitalism” for debates. If someone raises the “US is a free market” canard, just shoot it down with the Fed manipulating the money supply since 1913.
As for the free market being “theoretical”, this is silly. Is private ownership only theoretical? Is it just a figment of our imaginations that people engage in voluntary exchange? The theory of markets has nothing to do with Utopian idealism or “perfect competition” “homo economicus” or any such nonsense. These are all very substandard ways of thinking about the market.
Read Human Action, all the answers are in there. Of course the world is not and never will be completely free and nobody’s suggesting it is or can be. Rather, we libertarians are simply assering the following proposition: more free is always more just and humanitarian than less free. That’s hardly an idealistic statement.
While this author doesn’t support his argument, (having heard it elsewhere) others have claimed something along the lines of “because it has never existed.” Empirically, this support, if it were offered, could be scrutinized with certain contradictory historical examples -as I’ve found in Rothbard’s writings, Midieval Ireland- it’s altogether irrelevant. At one point, democracy (as a widespread governmental organization that many see as adequate, at least) was a concept that had never before existed, no?
Why is exactly is it “impossible”? As far as I know, the world wouldn’t suddenly stop spinning without the state. He may imagine it’s unlikely there will ever be a “pure free-market,” but it’s a fallacy on his part to assume he can know the future for certain.
Ask him to validate why it’s an impossibility.
And whether it’s an impossibility or not doesn’t invalidate its worthiness per se. It is practically impossible to eliminate all deadly disease, and yet the goal of eliminating all deadly disease seems to be a worthy one.
same here. I hate using and seeing someone use a term “truly free market” because it really is an utopia when you think about it. However, it must be the final goal of any anarchist, doesn’t matter how unlikely it is to happen. You can have much freerer markets without state, but totally free market is an imaginary concept, just like total totalitarianism, hehe. Most people use it to show the difference between “good” and “evil”. But yeah, concept is problematic.
The person said it was impossible without explaining how. A free market can exist if we remove the aggression preventing it. Is it impossible under the laws of physics? Well no. I guess this person thinks it “wont happen”. If you were being locked up in a basement and abused and suspected it would never end, would you say it was a good thing? To say it wont happen is pessimistic. Nothing gets done with a pessimistic attitude.
I find the word utopian funny. What does it mean? A world that is perfect? Well that is never possible and a free market is not utopia, it just allows for individuals to make their own life choices and to succeed and fail in their ambition by these choices but not being confined to slavery. The person doesn’t make any single point against free markets really, it’s just words that don’t really fit together well.
First off, let me say I agree with Clayton and others who decry the very term “truly free market”. It certainly does come from this strange notion that the US has a free-market economy today. Second, to say that something is impossible because it’s never existed in the past is simply an argument from ignorance, as it implies certainty about the future in spite of (or even because of) knowing nothing about the future.
He has used no logic in his statements, so you can allow yourself the same privilege. I suggest you resort to sending him pictures of cats until he decides to actually use logic:
It is true that a free market is an ideal, but I don’t think it is idealistic. (I mean that in the derogatory sense) I don’t think anyone will argue that the opposite side of the spectrum is more efficient, thus it creates an environment with the greatest possible prosperity. The only problem I can see at moving towards a free market is the volatility it will create initially, but after businesses and workers make adjustments, I can see only benefits. Old inefficient businesses will fall, but new more efficient ones will rise and competion will rise. When competition rises, so does employment and wages.
If anyone is interested I just started a youtube channel, that attempts to explain Austrian Economics in a humorous manner.