21 March 2012

On Market Freedom

(thanks to my students at John Jay)

A free market is not a market where someone can buy or sell "anything" they want, or where people are free to deal in illegal goods.
The term free market has little to do with the freedom of the individuals participating in market transactions.  
The misconception that market freedom somehow relates to personal freedom is a commonly held min this society, and is dangerous in the sense that it equates a process (market transactions) that should be at best neutral, and is part of capital's power in this country, with a process that many of us deem to be positive (personal freedom).  

A free market is one where the price is free to move and is not constrained by regulations, etc. Nothing more, nothing less. 


Anonymous said...

I hope this doesn't make me sound like a total idiot, but... what would be an example of an economy that exists without regulation in regards to price? I'm assuming (perhaps wrongly) that any economy today that participates in international trade (and is thus bound by tariffs, trade restrictions, etc.) would not be considered a 'free market economy'... or is that way off base? Tariffs and taxes affect price, but is that a completely separate issue?

James Miehls said...

Not like an idiot at all, a very valid point.

My post is more about the general discourse of conversation around markets in American society rather than specific macro economies.

A "free market" is an abstract idea that (probably) does not exist in its pure form in reality. Similar to "perfect competition" in that regard.

In terms of an economy without regulation I am not aware of one. In terms of a market without regulation, cocaine on a campus?
I mean there are attempts at regulation, but the buyers and sellers determine price based upon exogenous factors.