Monday, September 16, 2013

Robert Reich: The Myth of the “Free Market”

This is what a central planner sounds like. Robert Reich writes:
One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the “free market” is natural and inevitable, existing outside and beyond government.[...]
According to this logic, government shouldn’t intrude through minimum wages, high taxes on top earners, public spending to get people back to work, regulations on business, or anything else, because the “free market” knows best.
In reality, the “free market” is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.  
These rules don’t exist in nature; they are human creations. Governments don’t “intrude” on free markets; governments organize and maintain them. Markets aren’t “free” of rules; the rules define them.
For the record:

Supply and demand theory is a recognition of natural law. It is a key cornerstone of economics, which explains many things, including the impact of minimum wage laws. Reich is completely confused about the difference between economic theory and government regulation. It's no wonder he is an interventionist, he has no understanding of basic economics.


  1. Reich is one of the smartest pseudo-intellectuals we have. Isn't he precious?

  2. Reich understands natural law...he just hates it. All interventionists hate natural law, that's why they seek to change it through will, the will to power.

  3. Spoken like a true neo-puritan.

  4. He's also attacking a straw man. Like most pro-government types, he believes that if someone is for abolishing government, then they are against rules (you know, those crazy anarchist types that break windows and shit).

    1. I would suggest that one can abolish "government" while not abolishing voluntary "governance" which would/could be more meticulous and strict in protecting people and their things from criminals (state and private) than mob-create "government".

    2. He's not even talking about people who want to abolish govt - he's talking about the right, which are for as much govt as the left.

      His strawman is that somehow a 'free market' means 'no laws of any kind'.

      His argument could easily be extended to something like, 'a bullet is cheaper than allowing someone to return a product, so corporations will just start killing people who don't like their things'

    3. I agree with you. With the statists, it is an either/or scenario. Either we have government (a monopoly on force), or we have anarchy (not anarcho-capitalism)!

      Of course, they never go beyond their two-dimensional thinking to realize that maybe rules would be in place in an anarcho-capitalist world. Then again, their counter-argument would be, "But how would you enforce those rules with no government?!", and other various, tired arguments.

  5. For the record, Slavery and nuclear weapons were either created or supported through the state...

    I love how these morons always try to associate small government with slavery...oldest trick in the book...they're not even creative anymore

    1. Yes this is the oldest trick in the anti-libertarian book.

      Libertarianism diminishes freedom according to statists.

      1. First its capitalism oppressing women, racial minorities, sexual minorities, children.
      2. Then its capitalism creating less prosperity
      3. Then its capitalism creating too much prosperity
      4. Then its libertarianism being equated with tyranny by arch-tyrannists and conservatives.
      5. Then its libertarianism diminishing "true freedom," the "freedom to do what one ought to do" (I actually agree with the statement face value but not in the way conservatives and statists apply it)

      And on and on and on. Apparently conservatives probably have never heard of some of the great minds of libertarianism.

      BTW, did you know that those blue books during the Industrial Revolution were created in order to smear the classical liberals as the Old Order was about to lose power in the wave of liberalism?

  6. Oh my god, this Reich guy is so ridiculously easy to knock down from his perch!!

    1. The free market is all about rules which are negotiated between interested parties.

    2. The Reich-model of the economy is about non-negotiable rules being imposed using the violent coercive force of the State.

    See the difference, Reich? No? Then I guess we will have to torture you and force you to see the reason of this argument.

    1. 1. that is a contract not the free market; as such a thing is not even tangible to reality. It is only a model of how human behaviour regarding the aquisition of scarce Resources. Nothing more,

      2. That is not an economical model.

      Libertarins have never created a society, they come after all the hard work is done - it makes them therefore ahistorical

  7. Reich's problem is he does not understand what the Right means by "free market." They believe there are three spehres of govt outside of self-goverment. 1)civil government (2) family (3) the church. All three have roles defined by the Bible. It is a "free market" if govt (civil, family, church) strictly follows the Bible.

    So in a free market, a woman can be stoned to death for lying about her virginity when her father arranges a marriage. It might not be a popular solution but it's what the Bible dictates so it must be done.

    The best book on right wing free market economics is Gary North's "An Introduction to Christian Economics."

    An Introduction to Christian Economics

    "The free market is not autonomous. It rests on men's faith in economic cause and effect, and especially their faith in its moral legitimacy. The Bible provides the moral foundation of free market voluntarism. The moral issue is personal responsibility. The Bible places this squarely on the shoulders of the individual decision-maker."

    1. Jerry, please give us another one!

      I swear you must be a frustrated columnist for The Onion, because there's no way in HELL that an intelligent person can post this kind of bullshit without understanding how ridiculous it is.

      God, I love your posts!


  8. He is exactly right, in a perverse way but but only because it's people like him who have made a free market a myth.

  9. It is his concluding statement that proves his illogical thinking.

    ""These rules don’t exist in nature; they are human creations. Governments don’t “intrude” on free markets; governments organize and maintain them. Markets aren’t “free” of rules; the rules define them.""

    Reich says that a free market is a human creation. He is correct. But he speaks as if a government is not. Both are created by humans. The difference between the two is where control originates.

    In a free market, control is in the hands of all market participants. Each, of course, has various degrees of control. Yet still, each is free to participant as he/she wishes.

    A government is control in the hands of a few. Further, governments have the power to force people to act. Clearly, things are less free and less productive under government control. But regardless, both are human creations.

    So at its core, Reich is arguing that control in the hands of few is better than control in the hands of all.