In his column of Friday, March 26, Shawn Redden made two important points. He writes that “the language of the ‘free market’ has been used for centuries to justify slavery, theft, and patriarchy” and “politics concealed behind the rhetorical fiction of ‘free markets’ has benefited a tiny sliver of the world’s population.”
He’s right, but shady rhetoric and shadier politics do not condemn the market, which is properly characterized by non-aggression. This means that slavery, theft, patriarchy and the political shenanigans of corporations like Archer-Daniels Midland (or the East India Tea Company) are not free-market phenomena.
Agreements notwithstanding, the collection of insults and non sequiturs that comprised the rest of his article did not refute our contribution. In this article, we will address his concerns and offer additional sources for the interested reader.
Redden takes issue with our stance on inequality. Granted, the income distribution may be getting more rigid, but he ignores three crucial points. The first is that the endpoints on income distribution deciles are not fixed, and the long-run tendency is for everyone to enjoy higher incomes. Second, the increasing regulatory burden on commerce makes the economy less dynamic than it would otherwise be. Restricted markets have locked in European inequality. Finally, income may not be the right way to measure inequality. Rich or poor, Americans eat well.
Contrast this with history, say, 17th century Scotland. The rich ate well, but “the rabble” got most of their calories from two sources: oatmeal and beer. Today’s “poor” can choose from an enormous selection at any grocery store. Aldi carries lobster tails. Capitalism has brought us a long way in a short time.
Also, “shock therapy” is not the free market, nor is it supposed to be a magic bullet. It is a way to move from socialism to the free market, and the costs of transition do not come from the market per se: they come from the historical absence of free markets.
What about labor? A child working in a garment factory tugs at our heartstrings, but we have to consider the child’s alternatives. Theory tells us these are necessarily worse, in the family’s opinion, than the factory job. In many countries, these “alternatives” are crime, prostitution, or starvation. Developing countries are latecomers to global capitalism, and capital inflows (like sweatshops) are improving their standards of living dramatically relative to what they would otherwise be.
Again, we stress that it is insufficient to list the market’s “crimes” and suggest that it is “vampire-like” in any meaningful way. Dramatic metaphors are no substitute for careful argument. Why is the wage gap “devastating?” What does redistribution entail? Why will people work? Will we force them? Will we follow Lenin’s advice and “shoot every tenth person” to maintain productivity? Is it superior to the voluntary market outcome?
Our search for a superior alternative has been fruitless. Theory and history support the market. We reiterate that Mises, Hayek, and others demonstrated that “socialist economy” is an oxymoron. Communism failed in theory and in practice. Capitalism, meanwhile, has flourished.
Revealed preference is the most powerful evidence of the market’s superiority. Thousands of people died trying to cross from East to West Germany and from North to South Korea. Many Cubans have risked their lives to come to the United States. Very few have assumed the same risks to migrate in the other direction.
Our claims about the environment also stand. Countries with secure private property rights have cleaner environments. Former communist countries are home to some of the world’s greatest environmental nightmares.
It is ironic that Redden condemns the market’s “exploitation” of women when the market economy loosed the shackles of patriarchy. Capitalism allowed women to work for wages and flourish as never before. Far from being a “vampire-like system whose sole function is to exploit,” capitalism liberated many oppressed women.
In summary, we have not been refuted, nor did we “prove his case” about the a-historicity of the market. Our arguments have been stated clearly (twice), and Shawn Redden’s response showed that he doesn’t understand the definition of the market, let alone its workings.
To close our contribution to the debate, we refer interested readers to the works of Ludwig von Mises, George Reisman, Murray Rothbard, and Robert Higgs, many of which are freely available as PDFs on Mises.org.
Happy reading!