What the Free Market is Not

The free market is demonized for bringing financial ruin, exacerbating the span between the rich and the poor, the haves and the have nots. The market is to blame for every failure in the economy and every social ill. It is viewed as to be the philosophy of greedy industrialist and financiers who will step on anyone, especially the poor, in order to make a buck. Fortunately this is not what the free market is. The system most people attribute to the free market, or more commonly capitalism, is nothing of the sort. The market isn't responsible for any of the problems typically associated with it. The problem isn't capitalism but corporatism.

Corporatism – the current economic model of the United States.

Under corporatism most regulations are actually promulgated by a small well financed and well connected few for their benefit. Health care regulations are not enacted by Congress for the people; they are enacted by Congress for the benefit of health care providers. Insurance requirements for cars was not for the benefit of the people; it was to benefit the insurance companies. Environmental laws do not clean things up, they stomp out competition. Even our very financial system, controlled by the Federal Reserve, was established by Wall Street bankers for the benefit of Wall Street banks.

Corporatism, like socialism, rejects the idea of the free market. If the market were left free and unregulated all of the barriers to entry, all of the systems designed to keep competition out, or at least reduced, would be gone. Competition drives down prices, a known fact even among those that advocate economic planning. The market has an obsessive drive towards lower prices and greater efficiency. Consumers demand more and more of companies. We want cheaper, better, faster. Companies that want to survive must find ways to provide cheaper, better and faster services and products. Those companies that find a way to do that survive, while those which cannot deliver die.

The free market can only exist when property rights are recognized, respected and protected. The market can deliver any product or service that is needed and at a price most can afford. The market provides consumers with choices above anything else. Under no other system can one choose whoever offers the best service and products that fits their needs. The problem we repeatedly find is that those who demonize the free market are actually demonizing corporatism. The free market can do nothing but create wealth. It is corporatism, which is the economic model of our current system, destroys competition and wealth. It is not a free market that creates the problems that arise from time to time, but rather it is the corporatist system, so it is wrong to demonize the free market when things go bad.

I become irritated when someone declares that it is because of the free market we have high health insurance cost or the financial markets collapsed or any of the other problems commonly associated with the “free market.” The free market wouldn't have allowed either of the problems to have come about. Yet corporatist and socialist all demonize the market for these problems.