B: I’m not an economist, so I won’t claim to be. I’m not going to go into a terribly lengthy dissertation about this. If you’re interested in that, read a book on economics, like Murray Rothbard’s “Man, Economy, and State with Power and Market.” Mr. Rothbard begins with a principle which may be summarized thus: it doesn’t matter what reasons a person has for his actions; assume that if he does a certain action, it’s because it was highest on his value ranking list of available actions, regardless of the reason for it. This is just one of many basic principles that many either don’t recognize, or agree with, leading to proposals of perhaps unnecessarily complicated (and freedom-restricting) solutions to the problems of economics.
The forces in play in the Free Market arise naturally. We can analyze these natural forces, using them to our advantage (e.g., in the stock market), but we can’t do much to control them, if anything. We might try using governmental forces, which we can somewhat control, on the market, but these forces don’t seem terribly able to control the natural forces of the Market either. Enacting governmental regulations on the government may have many very unforeseen and undesirable consequences. Besides, they restrict our freedom.
As an example of failed government intervention, consider price controls. The idea behind it is that prices of some of the goods higher in demand aren’t allowed to get too high for common people to buy them. Because the goods are high in demand, the natural forces of the market drive up their prices. But if government disallows the price to get higher than a certain value, what’s a supplier supposed to do if it costs more money for him to provide a product than the government-controlled price will allow him to sell it for? He’ll simply not produce it, that’s all; otherwise he’s just throwing his money away. Thus fewer suppliers will be available, so there will be fewer of the goods high in demand – i.e., there will be a shortage. An attempt at controlling oil prices in the late ’70s inevitably led to the long lines at gas stations.
Many have differing ideas about how to produce the most efficient economy. There is a science to it, yet “experts” aren’t generally in agreement about it. As usual I support freedom, and the most possible. The more freedom people have, the more efficiently the economy runs. The Austrian School of Economics seems to favor this also. Yet disciples of this school are few and far between. Most people think there should be government intervention in economics. Why?
A: Probably because if there isn’t, the rich would oppress the poor, there’d be too much inequality, etc.
B: The rich can’t really oppress the poor in a truly free Free Market, as we’ll see later. As for “inequality” – if this is referring to an imbalance in the amount people have, why should it be necessary that everybody has the same? In the Free Market, everybody works for what they get, and if one doesn’t have as much as he wants, it’s his own fault; he needs to devise a way on his own to obtain it. This is actually a great thing, since it helps people be responsible for themselves and become industrious and innovative. Had it not been for the innovation of many who may have been desperate – acting, probably, out of necessity, the proverbial “Ma of invention” – we probably wouldn’t be enjoying many of the conveniences we do now.
A: Not everybody can work, though.
B: True, there are those who are disabled in some way. But these are few and far between. We see many who, while extremely limited in the jobs they’re able to work, have found a way to be productive and “contribute to society,” again, due to remarkable innovation. For those relatively few who are so disabled that they have no hope of finding work or starting their own business, they have families, friends, or charities available to assist, as we mentioned before.
Those answers take care of the concerns you mentioned. Is there any other reason why government shouldn’t keep their grubby hands off of business?
A: They should make sure the businesses aren’t unethical in their dealings.
B: Some of this goes back to the “right to do wrong” stuff we were talking about before. Some business practices are outright dishonest and fraudulent, which interferes with free trade; I would say it’s the government’s responsibility to see to it that this kind of behavior is eliminated. But there are other things businesses do that, while perhaps “shady,” aren’t necessarily dishonest, fraudulent, or against the law; that is, taking people’s freedoms away. Should government interfere with these actions? I don’t think so; besides, it may be that if it’s “shady” enough, the business gets a bad enough reputation simply by customer reviews that it sees the need to cease that practice by themselves. In that case, there’s no need to get government involved.
A: What if a downright immoral practice is seen as generally acceptable, as racial discrimination was in the southeast during a large portion of the 20th century?
B: While I don’t agree, myself, with the general idea of a business discriminating against races, I’m not convinced that the only way around this was to adopt a new law. It’s always possible to start your own business, or conduct transactions with only those of your “own people” (or anybody sympathetic). While this isn’t the ideal situation, it’s not like people haven’t been able to make do all the same. There are other examples of people being discriminated against, and they managed to get along without the enactment of a new law. It may come down to simply leaving the area and resettling in a place where people aren’t so prejudiced.