The Free Market God.

I’ve been thinking a lot about economics lately, I think because I’m poor.  Now, it’s vital to remember that I’m not an economist, and virtually all of my understanding of economics comes from Wikipedia.

I have had some friends who are what I call Free Market Extremists.  These are people who believe that the market can be relied upon for all things good, and to eliminate all things bad, if we just free it from the inefficiencies of government control.  They feel that the market will right itself if we repeal regulation and eliminate the Federal Reserve and get rid of the minimum wage and labor standards.  There are also people who hold a slightly more moderate version of this belief, who are not quite so reprehensibly ill-informed (I say ill-informed because the other option is that they’re just terrible people so I try to give them the benefit of the doubt).

What I don’t understand about this view is that it treats the market as though it is some kind of unstoppable natural force; something that exists and functions without human intervention… like the weather or the force of magnetism.

The problem with this view is that people created the free market.  People made it; it didn’t exist before we did.  It’s a tool… a tool with a purpose for which it was invented and for which it is used.  That purpose is to move resources around.  In the modern day, those resources are represented by money, because money is easier to move around than say, bananas or car repair.  Both goods and services are represented by money, and the market is a tool that people created to move those resources from the source to those who need the resources.

There’s no other tool that we’ve created that is treated as a force that is beyond our control that I can think of.  In fact, free market extremists seem to treat the market as though it has a kind of intelligence of its own… like it’s some kind of god, granting prosperity on a whim.  More than that, morality is ascribed to the market; saying that prosperity is granted to those who deserve it.  This is problematic because it makes poverty into a character flaw… but more on that later.

Completely ignored is the fact that since the market is created by people, as a tool to serve a purpose, is that we actually have the ability and I would contend the responsibility to control it.  You would never start up a car and say that it will do its job without direction, and while the automobile is a much more simple machine than that market, I believe that the analogy functions in this case.  We would not insist that the people the car ran over deserved to be run over because they didn’t get out of the way fast enough… whoever owned the car would be responsible for the damage it caused.  We would not insist that structures and property that were damaged by the car were structures that needed to be removed in order to allow the car to function at its most efficient.

It’s as though the things that are surrendered to the market are surrendered as a kind of ritual sacrifice… killing chickens to attract the favors of a fickle god.  As though those who sin against the market are doomed to suffer punishment as meted out by the market.  As though we as people serve the market rather than the market serving people.  This is a concern because it is a pattern of belief held by ostensibly very well educated economists… but it seems like a fairly fundamental facet of the economy to me.

The other problem with this is that it assumes that traits like slothfulness and selfishness are endemic to the human condition, and I don’t believe that they are.  People aren’t poor because they don’t want to work.  People WANT to work… they don’t need to be enticed to work.  We all have a desire to do useful things that better ourselves and our communities.  That work may not be in front of a fast food fryer, because those kinds of jobs take advantage of their employees and foster dehumanizing working conditions that eventually engender resentment on the part of the employee and I question the “usefulness” of that work, but we all want something to do.

We also all want to provide a benefit to our community.  The definition of community and the ideas of what might or might not be useful to the community might vary, but we all have a drive to do good things for the people that we care about.  This is a product of our heritage as social primates… in fact our endocrine system responds positively to our doing things that we believe benefit our people.  The problem arises when people feel abandoned or even attacked by the larger community and as a result cease to try to improve or benefit that society.  This isn’t to say that there isn’t a level of resource hoarding or selfishness that is normal, or that people don’t experience greed (we certainly do), but it is to say that when we perceive improving the state of the community as beneficial to ourselves, we buy in.

This is evidenced by prior periods of employee loyalty in times when labor was stronger; employers took care of their employees, with pay and pensions and training and job security and employees would feel a loyalty to that employer and would have careers spanning decades.  Now, since the employer is prepared to abandon their side of that community exchange, employees feel little to no loyalty… they have bought out of a community that no longer appears to benefit them.  Employers will pay as little as they can get away with, and will eliminate positions as soon as they are able.

In a day and age, when resources are not being distributed to the people who need them, and when people who want to work are not being given the opportunity to do so, using and changing the market to distribute these goods and labor more effectively is not just an option; it’s an obligation.  We need to give people some kind of hope that will allow them to really invest in the system, and we need to ensure that the resources are distributed to the people who are currently not receiving enough of them, so that they too can participate in the market and strengthen the whole.

This is not socialism; I’m a firm believer in capitalism.  But when the consumer struggles, businesses suffer.  And the businesses that suffer the most are small and mid-sized businesses.  After all, business relies on the consumer having money to spend, and now that the market is not longer distributing resources appropriately, many many consumers lack the ability to participate in the market in a meaningful and constructive way.

And isn’t that what the economy is for?

2 thoughts on “The Free Market God.

  1. dimvisionary says:

    Insightful post, thanks for sharing! I’d certainly agree that the “free market” is a tool made by humans and not an outside entity. Tough to discern when we are using a tool and when that tool is using us.

    I humbly invite you to examine your belief in capitalism. I know it’s a pervasive cultural meme, especially here in America. When I realized that I have no capital, no real capital, I began to question my defense of capitalism. No one that I know personally has any significant capital. How interesting it is that we are taught from a young age to “believe in capitalism”. Almost like getting the peasants to “believe in feudalism”.

    I’m not saying that I believe in socialism. Either/or propositions can be deceptive traps. I have a hunch that the “ism” the human world needs has not been invented or manifested yet, but it might be just over the horizon. Hope springs eternal.

    Anyway, just found your blog and I’m enjoying it. Cheers!

    1. adrennan says:

      I understand your concerns, but I have many friends who oaf their own businesses… The world would be a less wonderful place if they were not able to do so. So yes… I stand by the system that allows people to own their businesses and earn fruits from their own labor. I just think that capitalism needs to be regulated.

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