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The free market’s lapse into crony capitalism

Milam's Musings,

On a good day, when I'm proffering my views, conservatives tend to mistake me for a progressive and progressives tend to mistake me for a conservative. However, looking over my Musings, I realize I may tend to take it easy on the liberal types.

I've written 40 "Milam's Musings" since my first unofficial one Jan. 26, 2012 (stay away from the search bar; trust me, it's terrible). Looking over what I've written, I tend to write about issues I'm most passionate about: feminism and sexual assault, social issues (race, transgender and Islamophobia) and war (drones, torture and the folly of intervention), along with issues personal to me.

Certainly, there were times when I went after progressives hard - mostly on guns and war, especially with respect to President Obama. But it's time I flesh out the one area I've barely touched: free markets.

A small note on terms: "free market" is a better phrase than capitalism since capitalism is understood to be our present economic order, which is used interchangeably with the free market. It also doesn't help that conservatives call themselves proponents of the free market when they actually are not.

Only in two articles in more than three years have I written anything strictly related to an argument for the free market. In one, I rejected intellectual property laws. In the other, I argued for a profit-incentive in organ donation.

It's no wonder that I was offered a writing position with Brickwork, a progressive-leaning magazine in Oxford. They thought me a progressive. I'm not a progressive in the sense of the term as it's applied today. I'm closer to the classical liberalism of Adam Smith.

With my peers slobbering over Bernie Sanders and his socialism - although I would argue he's not actually one - it's high-time I offer a defense of free markets.

First things first, nobody in their right mind can truthfully claim the United States has a free market.

The government highly regulates the banking system and currency (most prominently through the Federal Reserve), utilities, the healthcare industry, the food and pharmacy industries, land-use through zoning and building codes and has a virtual monopoly on the education system, roads and mail delivery. There's also the problem of labor regulation through the minimum wage, occupational licensing and immigration policies generally.

Then there's the pesky business of tallying taxes at all government levels, tax breaks and loopholes, and the various subsidies to higher education, farming, energy companies, the airline industry and so on.

The United States has crony capitalism: the collusion of government and business, where government picks winners and losers in business and creates an atmosphere of "too big to fail." For instance, bailing out the auto industry in 2008 does not a free market make.

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It's problematic to continue to confuse the American economy for a free market because when the economy crashes, like in 2008, it's the free market that is blamed, bringing calls for even more government control.

Secondly, it's important to understand that proponents of the free market are not proposing a panacea, wherein the free market will improve people's lot in life overnight. We're talking about reversing centuries of deep intervention.

And there are other interventions that would impact the economy and people's lives that are not so readily obvious: the War on Drugs, prohibition on paid sex and perpetual war overseas.

The more government is involved in economy, the easier it is for the wealthy and companies to use the system in their favor. Why compete on the truly free market, where you have to deal with competition, when you can just get the government to craft the right piece of legislation for you?

Precisely what free market advocates like myself are saying is, yes, there is inequality, but the inequality derives from this practice of currying government favor, not from the mechanisms of a free market.

Moreover, this is why it's fallacious to say those who favor the free market are necessarily pro-business. I'm pro-free markets, not business. If a business goes out of business because it can't compete, then it goes out of business.

But there's no need to get too esoteric here. My philosophy is simply that I believe individuals peacefully and voluntarily engaging in mutual exchange is not only preferable, but leads to greater freedom and outcomes than government-directed central planning of our lives.

I know what my preferences are better than a bureaucrat. Government can't legislate me to be more wealthy or more equal or better off. Government, by its definition, exists as a monopoly on force, violence and coercion. That's not a moral framework I'm comfortable with, especially when it anoints itself the arbiter of good economic practices.

Perhaps a better way to understand it for progressives is to look at foreign policy. Many good progressives rightly deride our interventionist foreign policy, saying we can't plan the Middle East and all its potential outcomes. We don't know which rebel forces to give weapons to, for instance.

It's the knowledge problem, i.e., it's practically impossible to predict even an individual human action, much less millions and millions of them and to know whether intervening in this way and at this level will do this or that.

And yet, when it comes to the untold number of individual economic exchanges occurring in the United States, there's a belief among progressives that the knowledge problem can be overcome and the economy with all its players centrally planned for the better.

The inverse obviously holds for conservatives who confess a desire to not centrally plan the economy (although I don't believe them), but think they can centrally plan the Middle East.

Inherent in the quest to centrally plan the economy and the faith in government to do so is a lack of faith in humanity to better direct their own lives.

Erring on the side of freedom means pragmatically recognizing that we can't know all the outcomes, nor should we want to, and that we'll be better off for it.