Lesson 7: What is the Free Market?
(Sandel, Chapter 4)
As I read Sandel, I constantly ask myself, “What is the free market?” Almost all his examples and arguments assume it is lurking in the shadowy background to make sure its role is considered. Yet although Sandel continually refers to it, he never really defines what the free market is.
What is the free market? Is it a natural process like evolution or gravity; a characteristic of human relations, such as self-centeredness? Is it an economic premise that simply takes for granted this is the way things work or a social theory based on evidence? If it is the latter, what kind of evidence: data, historical evidence, or common sense? On the other hand, is it really rational observation or simply cynical conclusion?
Of course, I am not asking academic questions. Any quick observation indicates there is nothing like the academic concept out there in the real world. With our tremendous separation of the rich and poor and the “too big to fail” institutions, it is next to impossible to argue supply and demand lead to a just society.
When I paid attention to how the concept was used in the media, I found people almost always brought it up to argue against making decisions or taking action. It usually was used by those in power to justify the power they had or to speak against reforms or regulations or to explain why a problem happened (very often a problem they had created through their own bad decisions or immoral actions).
The former Federal Reserve chairman, Alan Greenspan explains the 2008 financial collapse in these terms. He admits he and many others believed institutions operating in a free market would self regulate, and they didn’t. In other words, he sat back and waited. Yet many again use the free market to argue we should not enforce governmental regulation or any checks and balances to hinder these same institution from doing whatever they want.
I have come to see the free market as a default mechanism to which we turn when technology seems to have shown God and traditional principles are irrelevant, naive, and even destructive. With nothing else, we look to the next election or the free market, pretending they will answer the questions we can’t.
There are obviously times when it is wise not to act or to interfere with natural processes. However, for the most part, Christians should not allow a shadowy concept to excuse us from making moral decisions or taking ethical actions. In a situation calling for neighborly love, we should not sit back and wait for God or the free market to kick in.
As we shall see in the next lessons, justice is primarily about controlling power, especially the violent use of power. Yes, justice can be defined as fairness, but the reason we seek fairness is to control power. When we do not speak or act, we allow power to have its way. Love, not power, is what makes the world go round.
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Nobody argues today that the “free market” should operate without any regulation. Nobody argues that a totally state controlled economy is an engine for economic growth or prosperity. So everybody supports some idea between total regulation of the economy and no regulation. Certainly in recent years the proponents of “less regulation” have been more influential. Of course, one can always be supicious of those for whom “less regulation” is not only a philosophical position and also the road to more profits for themselves. In USA we have at times moved back and forth between “more regulation” and “less regulation.” An important question today is whether the need for and importance of money in the elective process gives the “less regulation” party excessive power. Perhaps so, but remember Obama was elected, not Romney.
I read Washington Post article in Comments for last week. Of course this whole area invovles both egg donors or sperm donors and people are always looking for the “ideal” donor.
At my church there is a monthly Thrift Shop. Each month a couple brings their little boy who is about three. He is the happiest, most smiley little kid I have ever seen. He amuses himself while his parent shop. He is great fun to play with. I told his mother that when he gets older, if his present personality perserveres, he should be a sperm donor. A couple would be wiser to use him rather than any Ph.D., handsome genius. Any current parent understands this fact.
Although I agree for the most part with Bob’s comment, I nevertheless believe much of the public discussion and a lot of the political action aims at getting rid of any regulation except that which benefits those speaking and acting. One of the news reports about Florida Gulf Coast University, made famous by their success in March Madness, is that the Koch brothers finance and control their Economic department, even to the extent of handing out free copies of Ayn Rand’s Atlas Shrugged to those taking classes. And in his book What Money Can’t Buy, Sandel claims economics as now taught is presented as an inclusive philosophy based on financial incentive. These kinds of things make me hesitant to say “nobody” argues for the free market or state control. No matter what the speaker truly believes, the rhetoric does make the case for one or the other.