No. of Recommendations: 6
Umm is right. "Free markets" in the productive sense are not even possible without a powerful government.
On the one hand:
Free markets are economic systems where prices, production, exchange, and investment are mostly coordinated by voluntary transactions among private actors rather than by direct government command.
On the other hand:
Real free-market systems still need:
property rights
contract enforcement
courts
fraud prevention
bankruptcy rules
currency/monetary system
limited liability rules
securities laws
antitrust enforcement
basic public goods
So the government has to be big and strong enough to maintain its monopoly on force. If individuals can use force privately, that will certainly interfere with "voluntary transactions among private actors".
But the government while being that big and strong has to resist the impulse to throw its weight around. The government can't be using its force to put its jack-booted thumbs on the scales for its cronies and allies, or deciding that it should build the factory and hire and fire the workers etc., or sell judicial decisions and contract dispute resolutions to the person who pays them off.
What a conundrum! We are going to have to make lists of things that the government MUST do to preserve free markets and other lists of things the government MUST NOT do in order to preserve free markets. And not everybody is going to agree about every detail, so we are going to have to come up with meta-rules about how we negotiate and litigate the disagreements, and are able to take a set of actions that are completely satisfactory to nobody, while they are largely satisfactory to almost everybody who can contribute to the market.
Sounds like it could get messy. Do you think it is worth it?
BTW, from the 40,000 foot view (12 km), The entire West, the whole first world, is free market in this sense.
R:)
