There is a fundamental discord between people who are nominally for “free markets”, and those against, and because there is literally no common ground between them, indeed there is often a void where common ground should be, no forward progress is made.

Fortunately, both of these positions are wrong.

On the one hand, the free market’s most vocal supporters tend to ignore the finer points of free market theory, like the part about how free markets tend towards a diminution of rents, and how profits accrue to all factors of production.

On the other hand, opponents imagine more “freedom” only for the exploiters. They believe that “free markets” means that you are justified to do whatever you want as long as you can get away with it, and unable to imagine any alternative to the status quo, they often conclude that a free market will be worse in every way (unless you’re among that 1%).

The opponents are right to believe in this Wild West caricature because it’s exactly what will happen if you start gutting the social safety net without doing anything to fix the underlying problems. Whether unknowingly, the free market advocates ‘rhetoric is ultimately perceived as either justifying, or apologizing for, the status quo: they talk plainly about gutting social safety nets, with nary a mention of the underlying inequalities that make them necessary!

Unfortunately, it’s difficult to show people what they can’t see.

Opponents often point to the present, and say “Look at the free market failing…”. Except, it’s not a free market. And it doesn’t become one just because you call it that. Then again, the proponents usually don’t have a response to this, other than parroting some “invisible hand” argument about how the market will magically self-regulate if only you get rid of all the regulations, first. But it also doesn’t magically become a free market if you haphazardly start stripping away regulations, either.

So both parties are working on a flawed model of what constitutes a free market.

Discourse, not Dogma

And although there is something to the “invisible hand” argument, it kinda sorta presupposes a free market in the first place. It is not a trump card and you can’t just pull it out every time someone challenges your position. If you don’t do anything to remedy the “too big to fail”, if you don’t do anything to remedy the “captured regulators” or the “lobbyists”, etc., you’ve created a free market in name only, which is NOT a free market.

It’s not sufficient to just take away those things that interfere with a free market if you intend to leave in place all of the benefits (and handicaps) accrued under the old system of exploitation. You can’t leave untouched all of the institutional inefficiencies, corruptions, cronyism, all the accrued benefits from years or decades of favoritism & protectionism, etc., and expect the market to function at all like a truly free market.

An Example

I hope to demonstrate that the removal of the immediate condition is not sufficient to cure the accumulated injustices of centuries of abuse and subjugation. Sometimes it is easy to illustrate a point by way of example; consider the aftermath of the Civil War:

The institution of chattel slavery essentially dissolves overnight but the plantation owners keep their plantations, their fancy lifestyles, their estates, acres of land and livestock. Freed slaves were left with virtually nothing (since all that was theirs had previously been denied them). So the freed slaves end up as sharecroppers or very poorly paid workers — essentially slaves — having nothing with which to bargain but their labor, they are compelled by hunger to exchange their labor for whatever pittance their former masters will offer. Thus, injustice continues in a slightly different form

See where I’m going with this?

It is indisputably wrong for someone to argue that this outcome is the fault of the free market.

It is also indisputably wrong for a free market advocate to suggest that this is the natural result of a free market.

Yet almost every discussion of “free markets” centers around these two obviously and irrevocably incorrect assumptions.