Saturday, December 05, 2009

What is the free market?

"You believe the free market will take care of it."

Actually, no.

The person uttering that phrase is making an unwarranted assumption, that the free market is a centrally planned economic system just like all the others. The difference being that the person is implying that the free market is an independent self-aware quasi-omnipotent entity that does the central planning.

What "the free market" actually is, is the lack of any central planning. That's all it is. It is not an alternate method of organizing the economy. It is not replacing a physical central planner with an intangible central planner. It is simply the lack of a method of organizing the economy, the lack of a central planner. It is the millions of individuals engaging in billions of interactions and making trillions of decisions, all without being told what to do by some third party.

Given what the free market actually is, when someone is accused of trusting the free market, what that person is actually trusting is each individual to make his own decisions. Someone who "trusts the free market" trusts the people to act on their own behalf in their own best interest within the confines of their own knowledge.

The only people not trusted by someone who trusts "the free market" are those that say "I am equipped to make decisions for you." That person is a central planner, and the free market is only the lack of a central plan. Many people like that are unable to comprehend the absense of any central plan, which is why they must identify some kind of planner, somehow, in the free market, even if they have to make it up.

Like last year, I urge people to give to the Salvation Army. As the economy worsens even more than last year, more people are in need of effective charity. I don't agree with them theologically, but I agree with the work they do. And since the FCC is asking us to reveal whether or not we receive any benefit from endorsements we make, it's none of their damn business.

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