Brandon Roark
A few times a week, I engage in conversation with one of my free market anarchist buddies; the value of which to my sanity cannot be overstated. Most of the exchange involves questions about how a market economy could resolve the variety of problems we are told to believe are “best” solved by a compulsory monopoly – government.
But I was recently asked if I thought there were any problems with the market, seeing as we libertarians give so much credit to it as a means of coming to solutions for social problems. After thinking on it for a bit, I do have an answer to the affirmative: the market does face some problems.
Now, I’m not going talk about some new doctoral work out of NYU warning of yet another so-called market failure. Many libertarians, particularly those who understand the Austrian method, can explain that such “failures” neglect the function of entrepreneurs, not to mention the subjectivity of value; so I won’t mess with them here.
The issues of note aren’t actually critiques on the ability of a market to solve problems, but rather are remote from its actual function. The first problem I considered is that the market is inherently unpredictable. While I personally find no problem with a fluid system that can be reasonably expected to deliver increasingly better goods and services at lower costs; the unplanned nature of the free market seems to be the single biggest concern for most advocates of state control.
The vast majority of people raised in western culture were inculcated young with the “certainty”, “virtue” and “effectiveness” of government through field trips to fire stations, state memorials and capitol buildings; meeting a policeman, playing model congress and more. While I’d imagine most reading this article have outgrown the tendency to advocate a new law to fix this or that problem, most of our neighbors still trust government to solve problems using their half-baked ideas imposed under threat of a police baton.
When an anarchist (the kind that learn economics) is debating a statist, he or she is almost always tossed the burden of proof that a free market would yield some quaint utopia. While it is clear that the statist, in proposing the use of force, is the one who actually needs to justify their own position to the anarchist; statists errantly expect the same certainty from libertarians that politicians promise to exact through the magic of paper and guns. Anarchists are generally too intellectually honest to make those kinds of promises, however; but we can make predictions using economic theory.
Sound economics makes it possible to derive reasonable expectations on how certain problems would probably be solved in the absence of the state. Economics also makes it possible to predict the likely outcome of a state policy, which is seldom anything but ugly, often even counterproductive to the ends it was meant to serve. Neither the economically literate advocate of free markets nor the politician can see the future. Everyone, no matter what promises he or she makes, must be using a methodology for having the expectations they do.
How does Elizabeth Warren know raising the minimum wage would actually help unskilled employees, which is what she effectively promises? If the argument consists of simplistic slogans like “raise the wage”, it conceals the reality that threatening employers who hire anyone for less than an arbitrarily determined wage would actually raise the perceived cost. What happens when something costs more, all else the same? Consumers (employers) buy (hire) less of it, on the margin.
While this first “problem” with the market is really just a marketing problem for the philosophy (that can indeed be solved by clever entrepreneurs with writing and communications skills), the second problem is far more serious. The conversation with my friend turned toward the history and development of states which led me to consider another downside to markets: their goodies attract predators.
In the mind of a believer in state authority, the correlation between large western states and their large, developed, economic hosts proves a coercive monopoly on law, justice, and damn near anything else fosters growth and happiness. As an engineer, I learned early that correlation does not imply causation. Basically, if big economies and big governments are correlated, there are several logical causative possibilities.
Either: government growth and control causes economic growth and prosperity, the statist position; they are independent results of a common cause; they are completely unrelated causally and correlate only by coincidence; or economic growth and prosperity provides more prey on which to feed, thereby yielding larger states. The latter is the only option supported by actual reasoning. States and their violent activities are fueled by successful subjugation of the hearts, minds and bodies of a population to an insatiable appetite for resources; resources produced by what is left of the market.
As Murray Rothbard puts it in “Anatomy of the State”:
“For crime, at best, is sporadic and uncertain; the parasitism is ephemeral, and the coercive, parasitic lifeline may be cut off at any time by the resistance of the victims. The State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively “peaceful” the lifeline of the parasitic caste in society. Since production must always precede predation, the free market is anterior to the State.”
It is, regrettably, the surplus productivity possible through market activity and capital accumulation that makes a free market society a prime target for domination by sociopathic human predators. This intraspecies predation has been coevolving with civilization for millennia, likely beginning with religion; its height has been achieved through central banks. Central banks, such as the U.S. Federal Reserve, serve as a tap for authoritarians to siphon off as much of anything they desire so long as some among the billions of other humans do or could produce it.
The problem we face is the potent and long-running cycle of human on human predation through monarchy, dictatorship, republic, theocracy, democracy or whatever. I am hopeful because entrepreneurship – on what free market the various states must allow for their own plunder – will be the source of society’s eventual immunity to state predation, e.g. bitcoin. As spreading these ideas changes our culture, the results of human endeavors to pursue profit and avoid loss has led us to an age when we can finally begin treating the state as the cancer that it is.
