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Defending the Free Market: My journey

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Throughout my journey exploring the different wings of Socialism (including: Libertarian Socialism, Communism, and Democratic Socialism) and American political and economic philosophies, I became quite confused as to which one I could base all of my positions off of. I even ran to a system created by Catholic thinkers called "distributism," but even that didn't pass the test of realism. In this article, I am going to discuss how I went from "becoming a classical liberal" to "doubting my very beliefs," and to coming back to my more classically liberal beliefs. I will end with doing just as the title suggests: "defending the free market."

[Becoming a "Classical Liberal"]

From 2004 until the end of 2009, I considered myself a "Conservative Republican." Most of that was due in part to growing up in a family that held similar views, but I ended up developing my own unique views as the years went on; slowly degrading that initial label. A big part of my views was the position of "smaller" not larger government. In fact, the more I saw the Republican Party as being "neoconservative" and "socially conservative" while Bush was in office (getting worse with the "social conservatism" after he left), I took less of a liking to them. Sure, I am Catholic and am "socially conservative," but I don't believe that those views should be shoved down society's throats by the hands of big government, which, is the only way the American conservatives can achieve such a feat. Therefore, I came to the conclusion that minimum government or "minarchism" was the position to take, and finally settled on the ideology of "classical liberalism."

[Doubting my beliefs]

During my first year of college, my roommate, a strong socialist, tried slowly to "convert" me (my suspicion anyways) to the ideological principles of "socialist" thought. Now, I had been aware of this for a long time, but never gave much attention to it. However, it seemed the more he preached about "fair wages" and "big bad corporations" the more that I started to find common ground with him on the basis of "human decency." It was during his rants against Capitalism, and specifically "anarcho-capitalism," that he brought up the points of Capitalism still being a hierarchical system and one in which the weak are tackled by the strong. He claimed that only under Capitalism can corporations rule. It was at this same time that I started researching "Catholic Distributism," and started seeing some common ground on these viewpoints. Therefore, I started calling myself all sorts of things: a Mutualist, Libertarian Socialist, and Distributist. This became what I call: "the 3 weeks of doubt."

[Back to reality: my return to Classical Liberalism]

I quickly became very displeased with my new-found viewpoints. It seemed as if everything that I studied on my own had been a lie. However, upon revisiting the points from both sides (Austrian Economics vs. Socialist Economics), and reviewing them side by side, it hit me: there is nothing wrong with private ownership of the means of production, nor is there a problem with profit. That should have been the first thing early on that signaled one big "heck no" to the socialist ideologies. People should not be forced to have their businesses in the form of cooperatives just because they employ other people. I should point out that I never fully lost my "free market" principles during this period of time because a lot of the ideologies for which I was studying also claimed to believe in the "free market." However, once I started studying their views on what a "free market" entails, including (but not limited to): absence of profit and the workers' control of the means of production, I realized that there was very little "freedom" within those markets. Hence, I went back to my strong laissez-faire free-market capitalist views.

[Defending the free market]

To be honest, it is true that in a truly "free market," there are going to be the "greedy" and the "exploiters," just as there are now. That cannot be done away with in any system due to humanity's imperfection. Nevertheless, in a "free market," all exploiters will be at risk of destruction: no subsidies or government bailouts or filing for bankruptcy. When you "fall," you really fall, and rightfully so. This pushes companies to treat their employees well and to make smart business decisions.

This structure also drives competition, which is a part of humanity (so is cooperation), and therefore brings the market down to its lowest and most stable price.

Now, a socialist or distributist might say, "well, what about those dirty corporations that take advantage of the people?" Again, in a truly "free market," without government intervention, the consumers and the workers have full power to stop them.

What do people do now? Workers protest and people stop buying from that company. However, in this mixed economy, the government intervenes and also is already subsidizing that company. It can prevent them from going under if it benefits from their existence (under the table deals). In a state-based society, what incentive does a company have to NOT take advantage of the people? Not much. They are protected by the government. The people can't trump the government without fully taking it over so of course people get taken advantage of. Monopolies and abusive companies can ONLY exist, in a stateless society, if the people allow them to exist.

In my struggle during those "3 weeks of doubt," I had difficulty deciding if I could remain a "Libertarian and free-market supporter." I then fell into the appeasement of "Libertarian Socialism" and "Distributism."
Although these ideologies seem good, they require everyone agree to such a society. In some places they might work if everyone is fed up with their current system and doesn't want to try a truly "free market" based "stateless" society. That may be and there are two instances of it happening on a large scale for 3 years each: Catalonia and the Ukraine during the early 1900's.

Nevertheless, in the United States, we pride ourselves on our ability to make something of ourselves no matter what we do. Therefore, most of those systems wouldn't work because they were started by different people in different times and circumstances. Now, I do like cooperatives and think they boost morale in companies, but also believe that they should be voluntary.

No person should start a business and then be FORCED to make it a cooperative. If someone objects to them not being a cooperative, this will follow:

1. They will start their own or find a business that is a cooperative.

2. The business they rejected will find others who don't mind not working in a cooperative.

3. The market will determine the decisions of job seekers based on salaries which will be based on the profit of the company and the labor being performed.

(Corporatism is dependent on the existence of the state)

Lastly, contrary to popular belief, "corporatism" CANNOT exist in a free-market economy without the state. Merriam-Webster's online dictionary defines it as the: "theory and practice of organizing the whole of society into corporate entities subordinate to the state."

By "subordinate to the state," it obviously means "under the control of." Therefore, such an ideology is completely dependent on the existence of the state in order to thrive. Without the state's existence, a "corporation" would be nothing more than: "a large business or organization that under the law has the rights and duties of an individual and follows a specific purpose."

[Further reading]

  1. http://www.amazon.com/Defending-Free-Market-Moral-Economy/dp/1596983256
  2. http://mises.org/misesreview_detail.aspx?control=291
  3. http://www.amazon.com/The-Church-Market-Catholic-Economics/dp/0739110365
  4. http://www.amazon.com/Anti-Capitalistic-Mentality-Ludwig-Von-Mises/dp/14...
  5. http://www.amazon.com/Human-Action-Ludwig-von-Mises/dp/1610161459/ref=la...
  6. http://www.amazon.com/Socialism-Sociological-Ludwig-von-Mises/dp/1933550...
  7. http://www.amazon.com/Road-Serfdom-Documents---Definitive-Collected/dp/0...
  8. http://www.amazon.com/Fatal-Conceit-Errors-Socialism-Collected/dp/022632...
  9. http://www.amazon.com/Market-Other-Orders-Collected-Works/dp/022608955X/...
  10. http://www.amazon.com/Markets-Not-Capitalism-Individualist-Inequality/dp... (left-leaning but has some good comprehensive essays)
  11. http://www.amazon.com/Man-Economy-State-Murray-Rothbard/dp/0945466323
  12. http://mises.org/easaran/chap3.asp

[Conclusion]

I hope you received something out of this rather disorderly compilation of 1. My journey to free market principles and 2. My basic defense of the free market. Once we all can agree on the unnecessary role of the "state," the battle is between "left economics" and "right economics." Throughout this article, I hope I gave a clear indication of the fallacy of "left economics" without the state, or "left anarchism," by showing that its premise of a "free market" is not only untrue but that it is very destructive to liberty in the market place. Forcing people to make their businesses into cooperatives and eliminating profit does not equate to a "free market," that is socialist thought clear and simple, and is not in line with human history and human condition.

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