What free market? — VOICES for REASON

The upcoming Spring issue of The Objective Standard includes an article by ARC’s Yaron Brook and Don Watkins challenging the notion that America had a free market economy before the recent crisis. In  “America’s Unfree Market,” they argue that since World War I the U.S. economy has been increasingly saddled with–and damaged by–the anti-free market elements of taxes and government controls.

As noted in the article, with the latest federal budget surpassing $3 trillion and tens of thousands of regulations already on the books, people’s belief that America has a free market is only possible because of a gross misconception of what a free market actually is. That’s why I think one of the most important passages in the article is the following:

To be sure, today’s economy does have significant elements of freedom. Americans can own private property, choose their jobs, select from a smorgasbord of goods. Entrepreneurs can start businesses, hire and fire workers with relative ease, reap virtually unlimited rewards if successful. But the fact that our economy falls short of a socialist dictatorship does not make it a free market. America today is a mixed economy–a market that retains some elements of freedom but is subject to pervasive, entrenched, and expanding government control.

The actual meaning of “free market,” which advocates of government intervention seldom state openly, is: the economic system of laissez-faire capitalism. Under capitalism, the government’s sole purpose is to protect the individual’s rights to life, liberty, property, and the pursuit of happiness from violation by force or fraud. This means a government limited to three basic functions: the military, the police, and the court system. In a truly free market, there is no income tax, no alphabet agencies regulating every-or any-aspect of the economy, no handouts or business subsidies, no Federal Reserve. The government plays no more role in the economic lives of its citizens than it does in their sex lives. It does not impose on them the “will of God” or the “will of Society.” It simply protects their rights.

Although “America’s Unfree Market” will only be available in full to TOS subscribers, you’ll find a lengthy excerpt in the just-published March Impact, the newsletter of the Ayn Rand Institute. Check it out here.