Stop Demonizing The Free Market

I am convinced that part of our problem in this modern era is we don’t believe in free speech anymore. In fact, I heard someone on NPR state the other day that people who are on the side of Robertson from Duck Dynasty do not understand the first amendment. So here is the text from the Bill of Rights:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances”

I am not too sure why someone would say that Robertson does not have the right to define sin based on a historical understanding of scripture unless there is a double standard when it comes to free speech. I think there is a very subtle change that is occurring in our country where we are willing to throw out the past without any thought of long-term implications. Take for example our current demonization of the free market.

Many of us have read the November Manifesto from Pope Francis. Many are interpreting his words as anti-capitalism, when they are anything but. They are words that are challenging us to take responsibility for our actions. They are words that attack unbridled greed and lack of concern for the poor. They are words that attack consumerism and the loss of human care. They are not words meant to undermine one economic system and replace it with another.

Therefore, the Pope’s words should not be use as a part of the movement in this country to deconstruct any historical meaning associated with the positive affects of economic growth. And they should not be use as an attempt to justify the growing dependence on large government rather than self-sufficiency.

This process of deconstruction is creating emporiophobia, the fear of markets, and as Paul Rubin stated this morning that this is not a good thing “given the overwhelming evidence that such institutions provide the greatest wealth, health and happiness for humankind.” These words are from Rubin’s excellent article discussing how to roll back the demonization of free markets.

Without any thought of the long-term implications of our actions we elect politicians who want to create more and more regulations reducing the ability of our companies to compete against companies in other countries. And we elect local politicians who are anti-market, such as the New York City mayor. I am not saying we are not free to elect certain officials, and I think it is important that we have elected officials that reflect the views of the people, but I am saying that we need to think through the implications of replacing a free market system with one based in a strong centralized government, I won’t use the dreaded word Socialism.

However, I do agree that because of the choices of a few, the large majority of honest business people are being negatively impacted. So maybe Joe Kennedy was right. Maybe it is more important to be thought of as good, rather than be good? No, that is not true I don’t buy it! But what is true is what the free market is, versus what we think it is.

The free market involves the choice the make a transaction. If I want to purchase something I need, I am free to go to the theoretical palm tree and make a choice based on the best deal I can get. There are many sellers at the palm tree who want to sell me what I want to buy. They are competing for my choice, but whom I choose to buy from then cooperates with me to complete the sale. The competitors that win my business have out competed the others to win my business. The free market is not just about competition it is also about cooperation.

However, we can apply this to the workforce too. Rubin states, “Similarly, we might say the poor person has been out competed in the market. Or we might say the poor person cannot successfully cooperate with others because he lacks valuable skills and little to sell.” We can take this statement in two directions. If I am a pro-market dogmatist then I am going to argue that this is not my problem. If I do something to help this person that cannot compete due to the lack of skills then I am being penalized. I am penalized because I am being forced to provide a high minimum wage, even thought the person does not have the skills I need to do a job. I am losing money because this person cannot compete.

However, another perspective may be a bit more reasonable, which is to create mechanisms for the poor person to gain the skills needed to compete in the workforce market. So I as a business owner then cooperates with the people to create a stronger work force, which will help me compete with other business owners, which leads to a cooperate process of the purchasers of my product can and will purchase my product, thus completing the transaction.

The word that we are throwing around at the college where I teach is Flourish. The process of creating cooperative mechanisms between business and the community will create a win-win solution for both the poor and business, in other words creating an environment where people are flourishing. Business will have a stronger workforce, leading to higher wages for the poor, and the poor will be able to cooperate in the market by purchasing more items they need. Sounds pretty good to me.

So people, don’t jump on the bandwagon because some famous person thinks this or that. Look at the facts. Don’t throw out the old and replace with the new, because sometimes the new just isn’t as good as the old. Sometimes the old is just stronger and more effective.

And that is my thought for the day!

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