Wednesday, June 1, 2011

"Free" enterprise?

When I started this subject a month ago, I thought I’d have two posts. This is six posts later. I can’t stop stewing about this.

“America, land of the free” sounds hollow today, and “Free enterprise” sounds hollow.

The misnamed “free” market actually enslaves most when it grants unlimited power to the already powerful—those with hundreds of millions to invest, not in job-making enterprises, but in more-money-making ventures for themselves alone.

Money is power. We see money power flaunted when Congress dismantles regulations on industry, when it grants tax privileges to the wealthy, when it fails in fairness. Unregulated, the market lets some people exploit others, acting out the truism, “Absolute power corrupts absolutely.” We need reasonable regulation to limit power, rules to govern the game of buy and sell.

Undeniably, our society presently fails in this: massive inequalities; crumbling infrastructure; education and health services in trouble; underfunded police and fire departments; streets littered with homeless, many of them veterans and the mentally ill, some of them employed. All this and we bear the title of richest nation on earth!

In itself, wealth is good. When used for the common good, wealth is good. But every society needs rules that direct wealth properly, and that’s the job of government. Only thus can a society provide freedom and opportunity for everyone; only thus can it protect our common rights, our freedom, and our common property—our air, water, and soil.
Carol writes:
From my study and teaching of U.S. History (in particular the Gilded Age Era), I agree 100% with your comments about the mal-distribution of wealth problem. We are surely back with a vengeance into the spirit and practices of the Gilded Age…new robber barons in our midst!
How strange that the populace as a whole does not seem to notice this. But then, again, Americans generally do not have a good grasp of history and too often see only what they want to see. Sad—
Derek writes:
Thanks for sharing this. I’ve connected with a group of wealthy folks who are trying to raise awareness of income inequality. One of them is Nick Hanauer; you might be interested in his little book The True Patriot, , which argues for greater contributions to society from the most well off
To save our democracy, we must correct the imbalance of wealth in the U.S.
Biblical warnings about money have never been more relevant. Would that Christians paid attention.


Florian said...

We already have rules that properly direct wealth. If someone steals wealth, for example, then it should be directed back to the one from whom it was stolen.

Of course, Jeanette wants more rules, more regulation. But, eventually, the government will be directing the wealth itself, and that is definitely NOT the job of the government. In the first place, the U.S. Constitution does not give the federal government that job. In the second place, the only proper director of any wealth is its owner; and our federal government does not own any wealth, the people do. Governments have money to spend only because they are given power to levy taxes.

Now, even if it were the job of a government to direct wealth, as dictated by its constitution, there is no reason to think that it would do so “properly”. With the government in control, our economy is no longer free. The controls in a controlled economy cannot plan for every contingency, while free markets allow actors to adjust to changing circumstances. One might think that we only need economic planners who are sufficiently intelligent. But no planner can really know the actions and reactions of actors in an economy if the actors have free will. Further, what is required in economic planning is not only intelligence, but information; and no group of planners knows as much information as millions of actors in an economy put together.

So, it is actually not too surprising that free market economies turn out to be healthier than controlled economies, and they are so precisely because they are free. This assertion is not even controversial anymore. Even those as far to the left as Jeanette admit the need for free markets; they only advocate lots of government regulation to keep markets from running wild. But there has to be a limit on government intrusion. Every additional regulation makes the markets less free. If we are going to have free markets, then we have to let them be free.

Jeanette said...

Rules that properly direct wealth? If the power of extraordinary wealth were adequately curbed, the Wall Street financiers who contributed to causing the recession would be in prison instead of receiving 100s of millions in bonuses every year.

We may have rules. We don't have power sufficient to overcome the money power influencing Congress, law enforcement, and the market, which now is erroneously said to be "free."
At present, "millions of actors" no longer direct the market; money power does.