How free our markets really aren't
By Beth Cody, Writers’ Group member
Iowa City Press-Citizen
Wednesday, January 9, 2010

There has been a lot of talk lately about how "free markets" have failed us, usually said by those who advocate even heavier regulations of some kind. But if anyone thinks we have free markets, they clearly do not understand what free markets are (and are not).

A free market exists when government does not interfere with economic transactions between people, other than to enforce legal contracts or prevent people from committing outright fraud or force against others.

This is hardly a description of the U.S. economic system.

  • A free market does not exist when corporate subsidies reward industries with well-paid lobbyists.
  • A free market does not exist when government (our local government too) gives tax breaks to favored businesses. If tax rates are too high to attract new businesses, why aren't they too high for the rest of us?
  • A free market does not exist when government seizes land owned by citizens and awards it to politically-connected corporations that could potentially pay more kickbacks (err, taxes).
  • A free market does not exist when government "competes" with private businesses. Why do you think there aren't more non-government schools or mail-delivery services? Compare this to the vibrant market for religion in which government is barred from "competing."
  • A free market does not exist when government controls our money supply, causing inflation through unchecked printing presses and ham-handedly trying to "steer" our economy through manipulation of interest rates (which leads to excess speculation and "bubbles" that eventually pop).
  • A free market most certainly does not exist when government "bails out" certain "too-favored-to-fail" businesses, transferring billions of dollars from taxpayers to the most incompetent corporations. This is the antithesis of free markets.
  • A free market does not exist when government prevents people from buying things from other places, like buying cheaper health insurance from other states or legal drugs from other countries. Or prevents people from buying certain things at all – the obvious aside, even toilets or light bulbs that function well.
  • A free market does not exist when government prevents people from engaging in certain occupations without government permission. Licensing regulations prevent people from cutting hair, driving taxis, opening restaurants, selling alcohol, ad infinitum, without fees and/or expensive training.
  • A free market does not exist when government property use is granted to favored groups.
  • A free market does not exist when tort laws encourage frivolous lawsuits.
  • A free market does not exist when "intellectual property" laws enforce near-monopolies and create billionaires who would merely be millionaires without government compulsion (those concerned about income inequality should look at these laws).
  • A free market does not exist when companies are regulated to run their businesses any other way than honestly. This does not require hundreds of thousands of pages of regulations.
  • A free market absolutely does not exist when government takes a controlling interest in companies. This actually crosses the line into outright economic fascism, similar that of certain European countries in the years before the Second World War. This is big-government corporatism, not free markets.

Sadly, the United States does not have a free market system after all, but rather a mixed system.

We still enjoy some freedom, but it is increasingly limited by relatively high taxes and regulations and by both the military-industrial, corporate welfare spending of economic fascism and the heavy social welfare spending of economic socialism.

Even more dreary to contemplate, as we continue to expand both fascistic and socialistic spending, still higher taxes are inevitable and markets will become even less free.

So the next time you read that free markets or not enough regulation are the cause of all our problems, remember how free our markets really aren't.