Free Markets and Chained Minds

Frédérik SisaThe Recreational Nihilist

We repeatedly hear from Republicans and libertarians about “free markets.” Despite the deregulation ushered in by Reagan and continued through Bush 1, Clinton, and Bush 2 — and what is deregulation if not a “freeing” of markets? — the catastrophic near-failure of the economy hasn’t been enough to get rid of the more virulent strains of this ideology. But what happens when market challenges are confused with political challenges?  

In the opening to a recent piece, Mark Ames lays it out (  

“While Tea Party movement followers ran around Nashville last week dressed up in their Paul Revere-period costumes, blathering about their heroic struggle against Obama's Islamosocialist tyranny, the right-wing elite that nurtures them, and their paid libertarian ideologues, have been openly advocating the abolition of America's democracy in favor of a free-market junta, because, as they say over and over, voters cannot be trusted to rule themselves.”  

In sum, Ames suggests that the Republican/libertarian economic elites view democracy itself as a threat to economic prosperity. For an example, it’s worth reading one of the sources Ames cites, Kevin Hassett, director of economic policy studies at the American Enterprise Institute. In a piece entitled Does Economic Success Require Democracy? (, Hassett replies no. Dictatorships with free markets are more economically successful than democracies. While Hassett doesn’t outright endorse turning the U.S. into a free-market dictatorship, the envy of “unfree” countries’ economic success is plainly there. Throw in other like-minded folk, like George Mason profession Bryan Caplan, and recall how capitalist saints like Milton Friedman actively lent support to dictators like Gen. Pinochet, and it seems that Ames, with a few quibbles here and there, makes his case quite well.    

What about those, like Grover Norquist, who don’t suggest a capitalist dictatorship but prefer instead shrinking the government to an easily-drowned size? These are the anarcho-capitalists in all but name, who would prefer to be rid of government and let the markets sort themselves out. The concept is flawed, however:    

• Private property, being distinct from possession, is itself only meaningful as a construct of law.  

• For law to be meaningful, it must be enforced.  

• Enforcement requires force, which means a judiciary, police, army, or combination thereof.  

• Capitalism — the profitable exchange of goods and service — is rooted in private property.  

• Therefore, capitalism is rooted in law, which must be enforced by the threat and actuality of force.  

In other words, anarcho-capitalism is an oxymoron as truly free markets are impossible. There must always be some sort of authority, government, to support the fundamental tenets of capitalism, to protect the rights of property owners and money-holders, and repress anyone who opposes the wealthy elites. Whether pseudo-anarchist or totalitarian, the end result is the same — the reduction or elimination of little things like civil rights, environmental stewardship, labour rights — pesky restrictions on profit and the economic power of banks and corporations. By its very nature, capitalism can lead to dictatorship in its own way just as surely as communism, in its concentration of economic power in the state, leads to dictatorship. No wonder we catch people like Hassett gazing enviously at countries like China and wondering if, perhaps, we shouldn’t just discount stupid voters altogether. Hassett certainly doesn’t seem opposed to the idea when he writes “Democracy might be a form of government that many prefer to live under, but there is nothing theoretically compelling that suggests that it is the form of government that best reflects the underlying preferences of citizens.”  

The conclusion Ames doesn’t fully articulate is that as bad as it is that some people envy dictatorships for their supposedly superior economic output — and one could ask if China’s markets really are all that free — it is the ideology of capitalism itself that deserves greater scrutiny. The question is whether or not we want to allow the criteria for human success to be defined solely in terms of economic success. Or is there more to life than money and profit?  

Frédérik invites you to read his blog,