This Month the Venango County Tea Party Patriots will focus on Free Markets, culminating in our March 22 meeting with special guest Elizabeth Stelle of the Commonwealth Foundation.
I’d like to share just a couple thoughts about “free markets”, and free market economics.
First, what does it mean to have a free market, or to practice free market economics? Basically, in a free market I am free to enter into any contractual agreement that I wish. Let’s consider for a moment some areas that are impacted by the freedom to enter into contract:
1. Employment and attainment of wealth. The Bible tells us that man was created to work and to create. This includes creating wealth. Part of wealth creation is the freedom to enter into private contractual arrangements for the procurement of supplies, raw materials, goods, services, and labor. It also implies that I will be able to compete in a fair and open market place – one in which government does not use regulation to create an unfair market opportunity for some, and/or punish others.
2. Purchases and use of wealth: Once I have acquired some wealth, a free market allows me to use that wealth as I see fit. If I choose to purchase a car, a home, a bag of groceries, or a hospital with my wealth, and I have the means to do so, I should be able to do so, free of government intervention, coercion, or burdensome regulation. Alternatively, I should not be forced – by my government or anyone else – to use my acquired wealth in a way that I do not choose. The government should not be able to force me into a contract that I do not want, or force me to spend my money on things that I do not want and/or do not agree with (think Obamacare and taxpayer funded abortion.)
3. Acquiring, using, and dispersing of property: Property is a form of wealth. Property includes any tangible object that is under my direct control, and which I have acquired through by exercising my right to enter into contract. Land, houses, machinery, jewelry, clothing, etc. are all property. Once I have acquired property, and established ownership, that property is mine to do with as I see fit. I may use my property to generate more wealth. I may choose to just keep my property for myself. I may choose to share my property with my family or friends. I may choose to enter into another contract to disperse some or all of my property to others. All of these private transactions are my choice, and I should be permitted to enter into these activities free of government encumbrance or intrusion.
So what is the role of government in a free market? Well, contrary to the situation we have now, the government’s Constitutional and moral role in a free market economy is to protect and preserve the free market. The government should only intervene in the free market when doing so preserves the free market. The government should NEVER intervene in a free market for purposes of manipulating the market, or creating an unfair advantage, or burdensome disadvantage, for one individual or group compared to another individual or group.
Here are some of the most egregious current examples of how the government is systematically dismantling our free market economy. Obviously, space and time do not permit a thorough exploration of this topic, so these examples only serve as illustrations:
- Obamacare (aka the Affordable Care Act): This tops the list at the present time as the most chafing example of the “nanny state.” The government is forcing us to enter into a contract against our will, for services we don’t want, at a price far above the fair market value. The service this act is supposed to provide is neither affordable nor caring. This whole bill is just an Obamanation.
- The Food Safety and Modernization Act: Unlike Obamacare, which forces us into a contract, the “Food Safety Act” makes it “illegal” for us to enter into a contract for things like raw milk and farm fresh produce. The primary purpose of this bill is to protect the interests of big agribusiness and destroy the family farm and the whole foods movement. This is the first era in history in which the government is actually telling you what you can and cannot put in your mouth. The irony of the bill’s nickname is a bitter pill to swallow – the government forces us to eat highly processed, genetically modified, and potentially dangerous “food like substances” while preventing us from eating genuinely safe and healthy, locally grown, real food. Then they force us to buy health insurance so that doctors can pump us full of chemicals to attempt to battle the effects of our bad diet. And, as is most often the case, it is the poor among us who suffer the most from the ill fated schemes of a government intent on “helping” them.
- The Farm Bill: Like it’s poisonous cousin, the Food Safety Act, the Farm Bill is slowly destroying our food supply. The bill manipulates the markets in unnatural ways through subsidies, stipends, and regulations that favor one producer over another, one region over another, one product over another, and one production method over another. Competition is nearly eliminated and instead of diversity we end up with a propensity toward corn, wheat, and soybeans while other, more nutritious food crops languish. In addition, the Farm Bill penalizes the farmer by limiting what he or she can charge for provided goods and services, instead of letting the market decide what is “fair.” This unfair penalty forces many farmers out of business, and plays into the hand of Big Industrial Agricultural concerns by creating an unfair advantage for them. Burdensome regulations, which require a full time legal staff to address, can not be accommodated by the small family farm; eventually the small producer is forced to surrender.
- The Energy Bill and energy policy in general: Again, favor the big corporations, limit or eliminate competition, and kill any entrepreneurial business or innovation that might spring up (anyone remember Solindra? The Chevrolet Volt? Diesel engines that were actually efficient and economical?) Our energy policy is one of the best examples of over regulation on steroids in our modern economy. Coming soon: a “tax” on people who choose to live “off grid” – you will be penalized for not “participating” in the power grid. The current government moves to kill the coal industry, hyper regulate wood stoves, set virtually unattainable goals for fuel efficiency in private automobiles, tax those who produce their own power, and a host of other ill-conceived and demonstratively damaging directives all serve to keep us energy-dependent and force the price of energy ever higher.
- The Minimum Wage Law: What I get paid is essentially a private contract between myself and my employer; what I charge for goods and services I provide or produce is a private contract between myself and my customer. the government does not have a Constitutional right to interfere with either of these contractual arrangements, since doing so tends to unbalance the Free Market. If my skills are in high demand I will receive more compensation for my labor; similarly, if my skills are in low demand, or if the market for my skill set is “saturated”, I will receive less compensation. In a true free market economy, in a society with individual liberty, I have the right at any time to accept or reject any and all offers of employment; I also have the right at any time to acquire a new, more valuable skill set, increase my production, or take other perfectly moral and legal means to increase my value and, hence, my income. When the government forces an employer to pay more than the fair market wage for goods or services, the price of all goods and services is affected; the result is inflation, stagnation, and market collapse. In addition, when one nation undertakes to dabble in this way with the market, that nation will lose its competitive edge compared to other nations on the World market; jobs will be moved to other nations where labor is cheaper and/or markets are less “regulated.” This is exactly what we see happening now as the U.S. economy stagnates, the investor market remains troubled and uncertain, and jobs hemorrhage to overseas markets.
It is true that a Free Market economy will engender a certain amount of risk, ebb and flow, and fluctuation. It is interesting that God declared a seven year economic cycle for the nation of Israel, and every 50 years a year of Jubilee to reset the markets; experience and history has shown that 7 years is the approximate “small scale” cycle for markets, and 50 years is the approximate large scale cycle. What this means is that the market goes through periods where there will be shifts, and then the market will adjust. This creates alternating cycles of “boom” and “bust.” this is not necessarily a bad thing, and it is something that the wise can prepare for. It is an acceptable level of risk for those who love liberty. The simple fact is, these cyclical adjustments in a Free Market are far less catastrophic when the market is truly free; the adjustments tend to be more incremental and less severe. Often, government intervention serves only to “mask” the cycles, or distort them, so that when the “bust” eventually comes, as it will, it can be truly devastating.
Elizabeth Stelle will bring us more news from the economic front when she talks to us about Paycheck Protection in March.