Wednesday, November 22, 2006

Market Blues

by Tibor R. Machan

The free market economy is the most suited to human commercial affairs, there is no reasonable doubt about this. But a free market leaves some people with various laments that then tempt them to undermine this great institution.

When we do all our production and consumption in a free market, we are able to do well as well as badly as producers and consumers, even as we do not violate any principles of the market economy. Freedom of trade, the right to private property, and other elements of free market economic affairs can remain fully intact, yet people in the market place can do many things badly or well. People can shop carefully, prudently, efficiently, attentively and so forth. But they can also shop recklessly, inefficiently, inattentively, and so forth.

Shopping, for instance, can be impulsive, overindulgent and out-and-out stupid, and all this is perfectly compatible with the principles of the free market. Those involved in the commercial transactions aren't going to focus on helping people improve themselves as market agents. Stupid buyers will find eager sellers to please them just as careful buyers will. It isn't generally the task of buyers and sellers to watch over one another's judgments, so often these judgments will guide the behavior of either with no attention to their quality. Sometimes market behavior can be out-and-out immoral, yet so long as no theft or assault or some other violation of anyone's rights is involved, there will not be much remedy of these in the market place.

Of course, market agents do pay attention to each others' judgments and conduct and often act in reaction to finding these flawed, but only later, after transactions have transpired. I find someone in the market who acts badly and later I might avoid such a person, or I find someone who is sharp and sensible and then return for further market relationships, but this is not guaranteed. Often convenience is the primary value being sought, aside from just getting what one wants from others.

But when one steps back and thinks about markets, one may lament all this—how come there are no systematic discouragements against bad, albeit peaceful, conduct in markets? Why are people not stopped from buying stuff they should not buy, or selling stuff others should not purchase? Why are there so many ways people can easily go wrong as they navigate the marketplace?

So there is then the temptation to want to do something, anything, to remedy matters. Apart from people who want to impose their ways on the rest of us or simply want to control others, there are those who just wish for things to turn out better then they can sometimes turn out in the marketplace where people are free to do a lot of things well or badly.

They wish people would act more sensibly, more prudently, more efficiently and so forth and they realize, also, that this wish is fully justified, at least in general terms. They can also see around them individuals who aren't being stopped in the free market from
carrying on badly. And they wish they were stopped somehow.

So they then support government measures that promise to regulate human conduct in the marketplace. Never mind that such regulation is fraught with hazards, much greater ones than the conduct of free people in the marketplace, given that it always involves some measure of some people coercing other people in various ways. Never mind that the knowledge to fix things that may go awry in the free market is rarely if ever possessed by those who would set out to set things aright. Never mind that getting government involved here will encourage it to be involved there and at yet another place, so that temporary and petty tyrannies turn into massive and institutionalized ones. The mere wish to do something about the clearly undeniable prospects of some misconduct in free markets gives aid and comfort to those who would ruin it all in a vain effort to improve matters.

And there is the plain fact that making improvements on market misconduct is always open to people in peaceful ways, ones that do not involve undermining the free market. One can try to influence others to act better but, of course, this takes a bit of courage and initiative. Farming it out to government tends to suit the lazy way toward remedying matters and has the tremendous liability of contributing to the destruction of the greatest human institutions, the free society.

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