Libertarians, and to a lesser extent conservatives, are often heard rambling about how great the Free Market is and how it solves all problems and the government should get out of it. For the sake of people who might be perfectly earnest but were unfortunately raised with a more "liberal" conception of economics and haven't questioned it yet, I thought I'd make an article explaining what the Free Market is about and why libertarians and conservatives are always on about it. The TLDR of the free market philosophy is a simple observation:

When people can only interact voluntarily, the only trades that will happen are the ones both parties want. Therefore a society built on voluntary association is by far the most likely to benefit everyone even without any altruism involved.

The "free market" truly just means that: a market where all voluntary transactions are allowed, and forcing others to do what you want with their property is not.

The minimum wage and the idea that it helps poor people is a flagrant example of misunderstanding this truth. Without the minimum wage a worker would be free to not work for a company that won't pay them enough. Therefore, if someone is working a low-paying job in a world without a minimum wage, it must be because it's worth it to them, because if it wasn't they could just choose not to work there. Since an employer would prefer to not hire you rather than pay you more than your labor is worth to them, what the minimum wage actually does is prevent a low-skill worker from taking a job they wanted to take, because some politicians or some voters decided that they have the right to control his economic choices and prevent him from trading his time for money at his discretion. Obviously any claim that the minimum wage helps poor or low-skill workers is delusional.

And that's part of why I support a completely unregulated free market: an unregulated free market isn't a system that I'm proposing and that can have its pros and cons discussed. It's the lack of a system. Belief in a completely unregulated market is nothing more than belief that forcing other people to make or not make certain transactions and claiming it's for their good is bullshit. This shouldn't be controversial.

So that's why the free market is always better and more moral than anything done by the government. You could probably identify this pattern in almost any government regulation - if it claims to be helping the poor, odds are it's actually doing the opposite, because anything the government does is something you're forced to go along with even if the government isn't providing good services and you don't think it's worth it to you. In fact, any government administration is increasing poverty because it's creating "jobs" that don't actually produce any goods and therefore it's reducing the amount of wealth available compared to not having that administration, because it's spending human labor on something that doesn't help instead of something that does.

One of the most common concerns about generally having a freer market is that the poor wouldn't be able to provide for themselves without government welfare and benefits, because everything would cost money. But as you can see, government interference in the economy is in no small part responsible for poverty being so widespread. The minimum wage prevents people from finding jobs, regulations create artificial costs for businesses that make it harder for them to produce and sell goods, and taxes and all sorts of wealth redistribution programs discourage people from being productive, because if they produce a lot of value they won't be able to keep it all. Everyone, poor or rich, is being harmed by this on the whole, even if they receive a few direct "benefits".

Also, nothing is actually "free". When governments provide things for "free", like roads, what they really mean is that it's paid for in advance by taxes whether you like it or not. It's an illusion that it's actually being made free or even cheaper - and a very dangerous illusion. The only sense in which it gets cheaper is for some people at the expense of others, if the rich pay more than the poor (which they do).

Almost any argument that there are even any minor flaws with an unregulated free market is missing a simple truth: If there are no laws restricting the trade of X, and there's a popular demand for X, then people are willing to pay for it. And if people are willing to pay for X, then it's profitable to start a business that provides it. If X is a big problem, then people are willing to pay for a solution to X, and if people are willing to pay for a solution, then it's profitable to start a business that provides one.

The free market inherently tends toward solving all problems because in a free market, the way to get rich is to benefit other people. Who could imagine a better incentive system?

Once you illuminate this insight, anarchy starts to look very attractive, doesn't it? For example, if robbers and murderers were a problem, then people would be very willing to pay for protection from robbers and murderers, and if people are willing to pay for it then it's profitable to start a business that protects people from robbers and murderers. Without the government, it'd be a completely voluntary relationship: people who were worried about their safety could hire one of these companies to protect them. If they provide quality service, everyone's better off; if they don't provide quality service, you could stop employing them and they'd go out of business if they couldn't get any customers.

People who want the government to interfere with the economy often appeal to scary hypotheticals where businesses get so much power from being unregulated that they exploit their customers, or even outright appeals to greed like "rich people have thousands of times as much money as you, and therefore they owe you". But at least one reason should be obvious now why this rhetoric is completely wrong: in a fully unregulated market, those rich individuals and businesses could only have got there by providing value to other people, and their customers can stop employing them at any time if they start doing bad stuff. But Vox wants people to feel entitled to the labor or others; they want us to think that people who have more than us owe us simply for having more! Is it any wonder that things go badly when you have a culture that sees it as virtually a crime to be prosperous?

Corporatism - Fake markets

Of course, most big businesses in America are not legitimate free market firms because they receive millions of dollars or more every year in tax funding. A lot of people actually don't know this (I didn't know it until some Anarchist youtubers mentioned it and I looked it up to see), but it's true. And this means they are not an example of the free market because you're forced to give money to them whether you want or use their services or not. So don't be fooled when people point to the failures of this economy or the misdeeds of corporations as evidence that a completely unregulated free market doesn't work - that's evidence that government interference is harmful!

The benefits of competition

One of the best things about markets is that when anyone's allowed to produce and sell products without regulation as long as they don't commit crimes, there can be any number of competing businesses producing a given product and consumers can choose to buy from whichever they want or none of them. That means businesses have to keep their prices low because if they charge too much then people would just buy from someone else instead. Generally, in a free market the person selling something for the lowest price will be the one who makes the most money, because they'll get the most customers. So the worries about the rich and powerful profiting at the expense of everyone else are even more baseless.

Monopolies

The typical argument for how the market can "fail" is that if a company produces better products than someone else, they'll make more money and become more powerful and therefore be able to provide even better services, and drive all their competitors out of business. And once that happens, once there's only one firm providing something, they can charge as much as they want for it because you can't get it anywhere else. But there are so many reasons this wouldn't be a problem in a free market.

  1. No matter how much economic power a market firm gets, they stay dependent on their consumers to keep that power. You could have a billion dollars and a thousand employees but if no one wants to employ you, if you're not still producing products that people want and selling them at a price people are willing to pay for them, then no one's going to buy from you. You lose all your power.

    So if people were worried about a business forming a monopoly, they'd be less disposed to trade with that business, and so even being close to establishing a position you could abuse would itself impede your growth.

  2. Even if a monopoly did form and drive all their competitors completely out of business, they still can't do any harm. Buying their products and services is still voluntary. The worst a market monopoly could possibly do is make life as bad as it was before the good or service they sell was available. They can't take your money if they aren't giving you a product you value more than that money.

    The government can and does, though!

  3. The bigger a business gets, the more customers it has, which means it costs them more money to lower their prices to win over more customers from their competitors. So that's another reason why the closer a firm got to monopoly, the harder it would be for them to get closer.

  4. Different things are worth different amounts to different people. Maybe one company sells better and cheaper cars than another, and so they become more powerful, but the smaller competitor sells cars that appeal more to a niche customer base despite being "worse" overall. Maybe they sell cars with more passenger seats than most people need, but for the people that do need that, the bigger company's cars just won't do it no matter how much better and cheaper they are. It's not the product they need. As long as there are some people like this, the big firm won't be able to drive the small competitor out of business.

    And what happens if the big company tries to produce both types of cars? Well, any car they produce that is sellable to the niche customer base isn't one of their other, "superior" models, so they can only produce the niche product by cutting back on producing their main product. Additionally they probably have to buy some different machines to produce a different type of car. That will be a big cost. This is the same reason you don't see a single company dominating every market: just because they're great at providing one product doesn't mean they can provide a different product equally well. There's only a difference of degree between that car company trying to produce different kinds of cars and them suddenly trying to produce software or clothes, which no one would argue they could do so easily. Therefore, as long as there are some people who want a niche subtype of the product, it's extremely unlikely a monopoly could form on that product.

    In a nutshell: Economic value is relative! In fact, this is the whole reason trade is a thing! Goods and services are not strictly better than one another, the same thing that's worth more to you is worth less to someone else, and if you trade, you can both come out having something you value more.

    This is where statists go wrong, with the Fixed Pie Fallacy: they think that economics and politics has to be about distributing wealth properly. The unspoken - and false - assumption is that the only way one person can benefit is at the expense of another. That's just not even close to true, as all human experience shows - voluntary trade takes advantage of subjective value and makes everyone richer.

    Children understand this instinctively and demonstrate it whenever they agree to play one another's games so each one gets what they want. But politicians and greedy people who want to get "free" stuff still like to pretend they don't.



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