Making Free Markets Truly Free
“Free Market” Ideology has become a kind of business and government religion in our Country, driving down prices and increasing profits. Yet curiously, “Free Market” concepts are not applied universally, nor are they truly free, since often consumers don’t really know what they’re getting
Years ago, I read the bible of Free Market ideology, Milton Friedman’s “Free to Choose”. Free Market concepts are part of a libertarian canon that you might say are the premise of our Country, usually used effectively. However, you might say that portions of our economy that are called free markets are actually captive markets (like the military), and in other realms the markets are not truly free because consumers have the wool pulled over their eyes. Free market concepts should be coupled with “quality control standards” (basically honest consumer information) to both allow consumers to make good choices and for domestic job creation (which may better distribute profits). Also, these same free market principals should be applied to our laws, as a buttress against overbearing religious organizations.
To illustrate the benefits of consumer information, let us imagine that you are the market manager at a local Farmer’s Market (I actually was this manager once). It is your job to make sure that the market is fair, so that sellers enjoy coming to the market (and making money), while buyers equally enjoy the market (while saving money). Now there are two different people selling apples at the same price, $1.00/lb. Vendor A is known to have no worms and use verifiable organic methods. Vendor B claims organic methods which are not verified, and his apples are known (by you only) to contain hidden worms. Customers cannot immediately tell the difference, and you begin feeling that it is your duty to inform the customers, for fear of compromising the entire market. You vaguely remember from Milton Friedman that the customers will eventually learn the truth (by biting into the apples en masse) and making the “correct market decision”, but you don’t want to take that chance. You use your powers as manager to bring in an expert that requires each apple stand to be posted with consumer information, so that the consumers can more easily make the right market choice. Vendor A thus ends up raising his price to $1.10/lb, and Vendor B is forced to drop his prices to $0.80/lb, and gets busy upgrading his organic methods. Furthermore, three people are ultimately employed to verify these standards and report back to all the markets in the area.
While some would call these verifiers “Socialists”, I would call them an extension of the free market, the part where people need to make an informed choice. Nobody calls Consumer Reports Magazine a Socialist magazine, nor should they call quality control anything but a means of upholding free market standards (which says that you need to sell what you are claiming to sell). By extension, those selling things that require extensive cleanup down the road (ie Fossil Fuel burning) should at least have to disclose the future cleanup, if not offset its cost at point of sale (something like a carbon tax, to reflect the “true cost” of fossil fuel), otherwise the consumer doesn’t really know what they’re getting. The European Economic Union (EEU) actually did a really good job of standardizing and labeling products from several countries in the 90s, so that their markets COULD be free. If they hadn’t people would have been bamboozled into paying markups on things that weren’t what they were supposed to be.
One of the reasons this has become a big problem is threefold. The first two reasons date back to the Michael Milken/Gordon Gecko days of the 80s and corporate raiders. First, many government controls were taken off businesses, and a bizarre “efficiency” began, where next Mom and Pop started investing in Stocks (and not government bonds and bank accounts), while capital was raised, companies were bought up, prices were lowered (while employees, benefits, and pensions were eliminated) and stockholders were enriched. The third thing was that this “efficiency” later included “outsourcing”, in which jobs went overseas to cheaper job shops (some say sweat shops). The net effect was that prices were lowered considerably, on consumer goods like clothing and electronics, but then domestic jobs were lost, income disparities occurred, benefits were lowered, and Mom & Pop were taking greater risks with their money. Also, customer service went down the tubes. (Trehan, et al)
You know how when you are ready to buy something, a well-spoken person appears immediately, but when you want to return something or have a complaint, you might be on hold for an hour just to speak to a foreign call center? This is what has happened to customer service. Free market principles have translated into “Sucker!”. The more successful chains (Nordstroms, Home Depot, Kohl’s) have “no questions asked” return policies, people are assigned accordingly, and obviously it helps them. Many other stores (and notably utilities) have horrible customer service. A nice touch might be for our government to require customer service and quality control as the restoration of the truly free market, where people are actually getting what they thought they were supposed to get (and perhaps we could ban foreign call centers?). Thus, prices would go up slightly (and profits down), but domestic jobs would be created, and perhaps the worker bees might even get some benefits back. Opponents would scream GOVERNMENT REGULATION! But when Trump wants to bring jobs back to the US via tariffs, is that not government interference, not even in the name of a free market? Maybe in some way his tariff is a tax that offsets China’s dumping of artificially low-cost items, restoring a free market? This is where it gets rather complex.
Now, I challenge free market advocates to tell me how the US military follows free market principles. It is a classic captive market, as is essentially big agriculture and big oil (who receive generous government subsidies) and thus a violation of the free market. I understand that at some level, you have to gear up to win wars and guarantee enough fuel and food, but don’t be a hypocrite and yell “free market principles” when they are applied on a limited basis. You could actually force big ag and oil to live or die by true free market forces, and in the long run we may end up with better food and cleaner fuel (perhaps even cheaper in the long run). Finally, if we are to live by the free market (in which I firmly believe), let’s keep overbearing churches from having too much effect on our judicial system. After all, we have separation of church and state (because churches tried to make laws long ago and screwed up), and churches are supposed to stay on the morals side, while government stays on the legal side. As such, it would be wholly appropriate to say “my church side compels me to believe that abortion is abhorrent and that I should counsel women against it, but my legal/free market side believes that it is ultimately the free choice of the woman”. Similarly, you might also say “I believe that morally marijuana and alcohol are bad (and I counsel against them), but I will agree that the State allows freedom to use in your own home, as long as you don’t hurt anyone”. Murder and rape of course, are violations of both church and state, free market exceptions. If we lived in a Utopian society, we might have a perfectly moral free market society (where even murder and rape were morally reprehensible and free market “peer pressure” would regulate, but we’re not there yet.
Therefore, we will only be living by “free market principals” when we are able to expand upon the ability to make the right choices and apply the free market across the board, while identifying appropriate exceptions which are subject to law, tax, and tariff, until which time we are living in a Star Trekkian paradise.
