Monday, December 28, 2015

Why We Have a Difficult Time Selling the Idea of the Free Market

Cholita at a mercado in La Paz, Bolivia

Democracies thrive on the principles of the free market. The market economy always trends toward an equilibrium between price and cost, and between supply and demand.

The free market has always been distrusted by socialists, who in the US now call themselves progressives. (In the case of Bernie Sanders, he admits he's a socialist, but qualifies himself as a "democratic socialist" which basically means that the people are deluded into voting to give government control over the economy.) Socialism is highly seductive, offering the illusion that government can manage the economy to create a fair and equitable system for everyone.

When the socialist system inevitably fails to deliver sufficient goods to the people, those who operate the system can easily explain its failure.

They blame others.

For example, with the readily predicted failures of Obamacare, progressive politicians blame Republican interference. The US is $18.8 trillion dollars in debt? It's Bush's fault. Students aren't passing basic math and English standards? We haven't spent enough money on education. There are still poor people? Rich people have stolen all the money through greed.

There is no end to progressive blame throwing.

Progressive programs have a long and venerable history of failure, yet progressives sell their bankrupt ideas with the promise that more money or fewer Republicans will fix everything. Their arguments and conclusions are entirely false, but that doesn't matter to a population seduced into thinking that the government will pay their medical bills, or for their cars and houses.

Getting back to the market system, we know that it works because it has produced the richest countries with the least amount of poverty in history. Even the poor people of the US have more than people from non-market and non-democratic countries.

Yet the market system is a difficult sell. It doesn't have the seductive promise of (illusory) equality. It doesn't pretend to promise to take care of all the nation's poor. Most people cannot even readily explain why a market economy is so successful. Even those who have promoted it, such as Adam Smith, rely on vague explanations of its success ("the invisible hand").

And that is why, in today's world of ignorant Americans, the market system is distrusted. It's a far more difficult sell than the unicorn promises of socialism.

As the free market diminishes, so does democracy.