Is the Free Market Experiment Over?
It seems throughout the history of civilization the default economy of states and empires is one of socialism and increasing government control. Free Market economies are rather the aberration than the norm in the survey of world history.
If we accept the family-to-clan theory of social evolution, this makes sense. Family economies are typically governed by a patriarch or matriarch because – quite frankly – children are not capable of governing their own economies. (Economy, incidentally, is a transliteration of the Greek “oikonomia,” i.e., “household law.”) As the family grows toward clans, tribes, cities, and states, there is in this theory a social hierarchy that mimics a family structure. Those at the top of the hierarchy of the state, city, or tribe, tend to govern the regulation of products and services on a macrocosmic level to that of a father or mother governing the purchase and distribution of goods and services for his family.
As states grow into empires the urge to control the production and distribution does not diminish. Mechanisms for control become more sophisticated, bureaucratized and delegated authority perhaps, but authoritative control nonetheless
The Free Market economy rejects this model, and rather allows individuals regardless of social status to make economic decisions and associations freely and without 3rd party arbitration or hierarchical regulation. In the Free Market, each individual is an economy (“oikonomia”) unto him or her self.
There are several preconditions to a successful Free Market economy: private property, economic liberty (voluntary exchange), and personal security being among them; but I believe these can all be reduced to a single virtue – Trust.
In short, a Free Market economy succeeds because two or more parties are trusting the terms of their voluntary contracts to be fulfilled. This does not mean there is no government involvement. Indeed, the successful Free Market economy requires a continued virtue of Trust in the capabilities of the government. When contracts are breached between two parties, which breach is beyond private arbitration, the injured requires a jurist and the impenitent requires a penalty. We likewise trust that when verdicts in arbitration or the justiciary are made they will be fair and veredictum – true speech; and we trust not only that these verdicts will be just, but also that they will be enforced. Likewise, the government’s default attitude toward the governed is one of trust until evidence no longer requires it – trusting their innocence until guilt is proven.
We trust the buyers and sellers of goods to represent their products truthfully; we trust the buyers and sellers of services to represent their labors faithfully. We trust the arbiters of currencies and exchange media to represent commercial weights and measures veraciously.
We trust that the property secured through private labor will not be confiscated by public force; we trust that legal transactions will not be voided by public avarice; we trust that our lives and health may be reasonably secured – or that we are at least entrusted to secure our own lives and persons – in travel and the pursuit of legal transactions.
In the final analysis, we trust that there is an objective standard of justice, of morality, of rightness; that there is a mutual desire to conform to that standard; and that a want of conformity to that standard is recognized as a transgression deserving of just punishment.
But what happens if this virtue – this Trust – is no longer there? What happens when parties cannot trust each other to fulfill the terms of their contract? What happens when we cannot trust in the process of arbitration, the fairness of judicial verdicts, or even trust that the just verdicts will even be enforced? What happens when the government’s default attitude toward its citizens is one of distrust – of presumed or potential guilt?
What happens when buyers and sellers cannot trust the fair representations of each other’s goods and services? What happens when they cannot trust the arbiters of currency to represent its value precisely? What happens when private property is no longer safe from public confiscation? When voluntary transactions may be involuntarily mediated by interested parties? When the security and defense of our lives and persons is ever impeded by new threats?
What happens when we live in a world where everyone does what is right in his own eyes? When our commercial ethics are determined by subjective law, not our commercial laws determined by objective ethics?
The reason the Free Market experiment between individuals has succeeded, I am convinced, is because there was a homogenous morality, even between diverse peoples and religions. There was a belief in objective Justice and ontological law. In other words, the precondition to Trust is that we accept the transcendent as reality.
But instead today, we accept existential laws – that justice is simply another social construct – that legality is a positivistic mechanism – that societies have laws but there really is no Law. How can there ever be a homogenous morality with this philosophy?
We see an erosion of trust between buyer and seller, between governors and the governed, between factions and branches within the government itself.
This is not an evolved or progressive society. This is a juvenile society acting out its selfish impulses with schoolyard rules.
Maybe I’m wrong – that we can indeed trust our government to exercise justice fairly; that we can indeed trust our legislators to enact law that conforms with objective morality; that we can indeed trust our executives to enforce and execute established justice and law; that we can indeed trust the voting people of this country not to act like children, but to make rational and consistent decisions with others in mind.
States with centralized economies are notorious for treating their citizens like children – incapable of economic liberty, incapable of a mature measurement of the future, incapable of being trusted.
But no one in the United States has usurped the will of the people. We as an electorate cede more and more control to those whom we elect. The vox populi has screamed loud and clear that acting like an adult is too hard, too dangerous, too offensive, and we are content in our puerile pursuit of self-gratification at the expense of others.
If we lose the Free Market experiment, it is because we don’t deserve to continue it. If we are treated like children by the government, it is because we act like children and refuse to grow up. If socialism prevails, it is because we are too untrustworthy not to have it.
If we want the Free Market experiment to succeed, we must not only be trustworthy, but have an objective standard worth trusting.
