(maybe you want to visit my front page...)

Free Market Theory

From a very early age, nearly everyone in our society starts to believe that people should be as free as possible to do as they please, subject to various rules intended to stop this going wrong. This sometimes goes by the name of "liberalism", and I think it's all well and good.

More narrowly, they start to think that this is true particularly in the field of people's use of money; again subject to various rules. This is sometimes known as "free market theory"; again, all well and good so far.

Now, it is also obvious from quite an early age that the rules that must be put on to control such things are going to end up fairly sophisticated, if not downright complicated. Take anti-fraud legislation, for example. Hard to attack in principle, but it's no simple thing.

Now, imagine the following scenario. A is talking to B. A is trying to persuade B (who is a politics student) that a certain street in Cambridge should be made one-way: that people should be prevented from going one way along that road in a car.

Is it a learned use of B's political knowledge to say "No, I believe people should be as free as possible"? No, that's substantially lowering the tone of the conversation. B's response must focus on whether it will significantly help, or not.

It's OK for B to say "I think it'll make little difference, in practise; so we may as well let people do what they want there". But here, the key part of B's answer was the "it'll make little difference". The "let people do what they want" would have been understood by A anyway, whether or not B had said it.

Now imagine that A and B are discussing whether people should be allowed to pay for their children to go to public schools? Suppose B is an economist: surely any mention of the belief that "markets should be as free as possible" in the answer is dumbing down the conversation just as much? In the same way as in the question above, it's at most an attempt to hide the real question.

The real question is "is this one of the exceptions to the rule that markets should be as free as possible?": something that any reasonable person approaching the subject would know anyway.

At best, replacing the question

"Is it right for people to be able to...?"
with the question
"Is it an exception to the principle of free market theory that people should be able to...?"
is just an annoyance. The two questions are the same in every way: it should be just a matter of stripping off the needless confusion and then discussing the real issue.

But in the real world it's not like this. Things are far more sinister. The extra layer of confusion is put on as a barrier to open and sincere conversation: I'll give you a real example.

Jurisdictions with a large poor population and a large rich population frequently have problems with policing: many burglaries, and suchlike. One result is often that the rich people start hiring private security firms.

Once they've got their policing taken care of privately, they of course have no need for the official police force. So the rich people lobby their local government for cuts in the police budget: less tax for them. Because they are rich people, they are often very good at lobbying. So the poor people end up with poor, sparse, antagonistic, underfunded, undersupported policemen. Imagine the prospects.

Some places in the developing world have seen this particular problem. It's also particularly big in the US.

Occasionally, someone gets brave and stands up and points out all the poor people who are having their human rights systematically abused: their country is failing to defend them.

The contingent of rich people frequently resorts to the following answer: they drag out some economist who knows how to use the words "free market".

The tragedy is, people do often think, "yes, the country we're living in has to have a 'free market'. That means it's OK for people's rights to get trampled over in the name of the 'free market'." Yet this is obviously not the job the words are meant to do, as the example of the one-way road demonstrates, and it's a disgrace that they can get away with it.