Government bureaucrats once again interfering with the free market.
Why Markets Always Work
This articles is basically to point out the victories of conservative thinkers and corporations on the topic of the triumph of the markets and the total lack of necessity regarding regulation.
The case for free markets and unfettered entrepreneurialism is even greater than the Hoover Institute and the American Enterprise Institute points out. Yes, the past few years have demonstrated that financial regulation is completely unnecessary and that financial institutions of every stripe do a better job of self regulating than any “government bureaucrat” could ever do. However, there are many areas that naturally percolate with free market zeal that conservatives do not highlight. These areas include but are not limited to:
- Child pornography
- Human Trafficking
- Blood Diamonds
Why Child Pornography is Underdeveloped as a Market
There is an active market in child pornography that is waiting to develop, if it were not for law enforcement. Now if child pornographers had a lobby, they would most likely take the same position as General Mills on advertising atrociously unhealthy foods to kids, or Goldman Sacks on financial regulation. All of these companies would like to self regulate. However instead pushy government workers (called police and prosecutors) interfere with the development of a full functioning child pornography market through midnight raids and other forms of government interference with Adam Smith’s invisible hand. As stated in A Wealth of Nations.
“It is not for the benevolence of the butcher, baker or child pornographer that we receive things beneficial to us, but through their concern for their own self interest.”
(FYI, we learned some time ago that we can make up any quote we like regarding A Wealth of Nations, as almost no one who quotes it reads it. Borderline illiterate conservatives how have almost no other interest in books from 18th century authors show a strange interest in this one book).
Blood Diamonds
Blood diamonds are an extremely profitable commodity that really shows how innovative the US economy can be when the profit motive is in the right place. The fact that American businessmen have the moxie to obscure the origin of diamonds that are from conflict regions by saying that they simply purchased the diamonds from their connection in Israel or Antwerp. They keep the diamonds flowing from conflict regions in Africa where women and children are getting their arms hacked off by machetes, to newly engaged couples in the US who need a small shinny object to declare their desire and intent to mate with one another. The money is then used by African warlords to buy more machetes and machines guns to perpetuate the cycle of violence without end. This epitome of the free market was interfered with by nosey and self righteous do-gooders who have now placed socialist limitations on this burgeoning trade. Its seems these communists will not be happy until we have a Stalinist centrally planned economy. We now are saddened to report that these nattering nabobs of negativity have so limited the sale of blood diamonds that the free market has almost been destroyed. Lets hope that these negative and bureaucratic restrictions will someday be lifted and that trade can once again flourish.
Jewelers who sell blood diamonds in the US can see no evil. They can’t be held responsible for the resale of conflict commodities. Look, they just bought their diamonds from a middleman, how can they know. Get off their back already.
Human Trafficking
Human trafficking is simple. People are needed in one part of the globe, but are born in a different part of the globe than where they are needed. Human trafficking, called human arbitrage by Goldman Sacks, is really just a way of matching supply with demand. There are a number of ways of moving people from supply to demand, and entrepreneurs around the world are always coming up with out of the box ways to move people. Except in instances where they have to put people in boxes, such as the back of trunks, or in ocean containers for long term journeys across oceans leaving them only a few pounds of rice and some buckets for their waste. When they arrive at their final destination they are totally dependent upon their captors, which translates into big profits for savy investors, and work in the sex trade, where they get to meet a lot of people they never would have if they had just stayed home. This interaction also creates a wonderful market in sexually transmitted diseases, which also would not have had the same opportunity to flourish with stodgy government protections for individuals.
Human trafficking is a market that could 5 times bigger than it is presently. However, here again onerous regulation interferes in the development of properly functioning markets. Milton Friedman would be rolling over in his grave if he saw how the FBI and INS deliberately interfered with the rights of capital owners to sell people into bondage like livestock. As Milton Friedman pointed out, corporations have no moral responsibility. As Dan Quale, another bright shining light in the conservative movement would say, “how true that can be.”
Conclusion
Free markets work. Whether is opening factories across the US Mexican border to hire slave labor and dump industrial heavy metal pollutants into area rivers, or seamstresses in Guatemala who are beaten for not meeting their sewing goals in a Nike sweatshop and paid 9 cents an hour, the evidence from economies around the world is in, regulation is unnecessary. Commies and socialists need to get over themselves. If their daughters get caught up in child pornography, it was the will of market, and should not be questioned. Self regulation always fixes any perceived problems, and government regulation is always an interference and never works out in any case. Seriously, does anymore research even need to be wasted on this topic?
Che,
This is one of the weaker assaults on free markets I’ve read in a while, but it’s still worth commenting on, I guess.
You seem to have some disillusions about what a “free market” is. I’ll help you. The free market is merely the matrix of free exchanges entered into by individuals. Since resources are scarce, decisions about what to produce, how much to produce, using what methods, and in what locations, are made in light of satisfying the most urgent demands of free individuals.
I mentioned the word “free” here a bit. Child exploitation, slave labor, human trafficking, etc. are all assaults on liberty and freedom and are crimes against humanity. If America were to abandon free markets and become a police or totalitarian state, would a market for slave labor, human trafficking, or child exploitation dry up? Of course not. In fact, history has shown that where there is totalitarian state control, there is usually atrocities and crimes against humanity.
Your assault on “free markets” is a weak straw man argument. What you are describing in your examples are crimes that you claim are the product of free markets, and that we need regulation to prevent these crimes from happening. But of course, a market will always exist for anything when there is demand, even if the product is illegal. The problem is that there is a demand, not that there is market.
Of course, for markets to function, businesses and individuals rely on the rule of law. Such law obviously already prohibits the activities mentioned in this article.
Finally, people who understand economics realize that America is really a corporate-collectivist state, not a “capitalist” or “free-market” state. Corporations rely on government for subsidies and for other favors not available in a pure free market. Goldman Sachs would not exist today without the government; they would be in bankruptcy. These giant banks all have friends in government. They operate under the implied guarantee that the government will rescue them if they fail. Free markets temper greed with the fear of failure. There is no government backstop, so if you act recklessly, you go out of business. Then there would be a MARKET for the safest institutions to invest your money in. That’s not what we have.
“Government bureaucrats” are also “in business” – to get elected. They “regulate,” but offer special breaks to groups they need most to get re-elected. “Regulators” can be bought and sold. They are simply not the missing piece to your Utopian society you dream about while lying in your dorm room smacked out on crack beneath your Barack Obama poster.
Oh, also, whether you have a Republican administration or Democratic administration, your government is LYING to you.
I am pointing out essentially the ludicrousness of what conservatives and or the corrupt describe as the lack of necessity to have regulation. Time and again the fiction of “the market” is used as an excuse to essentially continue abuses. The description of a free market that you use exists in very few places in the US economy. It is really more a term of propaganda. For instance, Exxon does not exist in a market, but is part of a cartel. Large consulting companies have significant monopoly power. I can rattle off industry after industry that is not operating as a free market. You came up with an example yourself in Goldman Sachs, yet, the term “free market” is used all the time. Why is this?
The trade in blood diamonds is still active and as you pointed out illegal (although enforcement is an serious issue and so blood diamonds still flourish.) There are many businessmen who have fought against restrictions on blood diamonds and up until the mid-1990s it was completely legal, and justified undre free market ideology and the idea that Africans always kill each over over something, so what is the difference. Human trafficking was also not always illegal, and was justified on free market concepts as well and the right of property owners to make a profit. The, other examples that I gave such as seamstresses being paid 9 cents an hour in overseas sweatshops is still completely legal. In fact it is encouraged by the very structure of globalization and the face that buyers are not policed by the home country. All of the ideas about globalization have turned out to be simply justifications to maximize profits and screw over people, animals and the environment. They result in lower worker power in the wealthy countries and terrible mistreatment of foreign workers, and freedom from environmental regulations in overseas plants. This is leading China to become a giant cesspool of industrial pollution. American companies know exactly what they are doing, and they just don’t care. The rule of law that you bring up does not control these activities that I am discussing, and up until very recently did not control several of the main categories I discuss in the article. However, I have a question. Why is child labor or sweatshops, or how Wal Mart treats employees, or how animals are treated in slaughterhouses ok, but child pornography, and blood diamonds not ok? Does your morality essentially extend merely to those things that are officially illegal? How about slavery? At one time slavery was legal, so was it moral because it was legal? If you lived several hundred years ago would you write that those opposed to slavery are unrealistic and want a utopian society? The argument you are making is essentially the same argument made by slave owners in the Antebellum south to justify slavery.
Here is my proposal. Markets must be regulated. Those that propose self regulation have no evidence to back up the idea that businesses can control their greed. People who propose that markets are the answer to all of our ills should be made to read history and or gain a better appreciation of what is happening in the world. Regulation and economics should start off with the basic premise that humans are flawed creatures and if left to accumulate too much power, will abuse other humans, animals and the natural environment. The city state of Venice, which was the longest continual stable system of government understood this and put into place checks and balances. However, our current ideology does not say this…it encourages the least ethical to set our policy and to grab as much as they can. The justification for this seems to be that it is ok because “free markets” will work everything out. No they don’t and no they won’t. How about replacing markets with that which is most sustainable, most fair, most moral? Imagine a world where executives at Nike have slightly smaller mansions, and Guatemalan seamstresses are not beaten and paid 9 cents per hour.
On Obama, if you actually think Obama is a progressive, I urge you to read this article. I have written in an earlier post that Obama is nothing but a tool for corrupt concentrated power. I have no idea where you picked up that I support Obama’s economic policies.
http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout
Hi, I approved your first comment because I thought it would be a good straw man for me to reply to because I think a lot of people who are at your low state can learn. However, your second comment is not actually listening to my response but is just a reiteration of your standard pro-corporate ideology. Markets are in many cases not voluntary, that is what you don’t understand or realize. You are applying something from a textbook that does not exist in this reality. I have several examples of legal and completely involuntary markets and you are ignoring the examples. You want to talk and not listen. There are other sites I can suggest for hyper-conservative zombies who are rude and do not either know what they are talking about or don’t look towards evidence but just repeat what they are told. I can suggest foxnews.com, the Wall Street Journal and Glenn Beck. Further reading of this blog will lead you to feel more angry, so I recommend you stop.
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