Monday, June 24, 2013

The Free Market and Libertarians

There was one thing that John Maynard Keynes understood about people is their nature.  Keynes was a keen observer of humans and often made remarks about them in his discourses with other people.  In particular, he had an affinity for hands.  It's weird, but, we all have our quirks that help to define us in some mild way.  But in the realm of understanding human nature, Keynes understood the instability of the human condition which, I believe, helped shape his views about government interventionism.  Keynes argued often that Capitalism was necessary but unstable, and required a hedge against severe shocks to the system.  This is where the ideal of government interventionism comes into play.  The government is the only entity large enough in the economy to affect any form of influential change to the market and the only investor large enough to stabilize supply shocks or credit shortages.

Libertarians would have you believe that we should turn over all our policing force to the private sector.  They argue that supply and demand can solve all problems and that markets will adjust themselves in time.  And on a micro-level I believe this to be true as well, however, on the macro-stage, the rules are different.  When a shock occurs to a region vs. a nation, the regional economy can seek resources out of state or out of region to help stabilize the markets that have been shocked.  A sudden drop in the supply of coffee in the area can cause a price increase, but, with the interstate markets like they are, obtaining a new supply of coffee is relatively easy.  However, when the entire national market is affected by a supply shock...say the price of oil spiking to unabsorbable levels like what happened in the 70s, the sudden shock on a macro-scale can be too much for the market to absorb and the government would need to take steps to stabilize the supply shock.  Government interventionism isn't about seizing control of the market, but taking steps to ensure that it doesn't collapse in on itself.  As Europe is finding out that the lack of public investment and stimulus spending, which is designed to give demand a crutch until the private sector can take over, is harming their economic growth substantially.  Many Euro-zone states are in recession because the ECB (European Central Bank) has been very tight-lipped with the money supply.  Partially responsible are the Germans because they're currently the nation who is in charge of the bloc's money supply.  Normally these nations in Europe would take their own currency, spend on public investment, run some short-term deficits, cause a smidge of inflation, and everybody would be back to full employment only after a few years.

Libertarians have another story.  It has been my observation that Libertarians tend to sharply moralize the market believing that any government involvement in their lives is immoral, and that the assertion that anyone should pay for anyone else is objectionable.  Now if I were to come up to you in the street, say to you "Give $10 to that guy in front of you and pay for his groceries or be jailed."  You'd look at me and say "get bent" or some variation of that.  I think most rational people would.  However, if I were to come up to you and everyone else in society and say "Please provide $10 so we can build a bridge for everybody to use."  You'd perhaps be a bit more sympathetic to that because the money is being used to build a good that everybody can use.  Or, sticking with the example of groceries, "Please provide $10 so that we can provide food to a family that's impoverished so they don't starve and end up on the streets."  Most people would find that to be at least reasonable on the premise that nobody believes anybody should starve.  Libertarians place an unreasonable amount of optimism and faith in people in business to provide for all our needs.  And while the sentiment may be noble or even somewhat rational to a limited degree, it's not logical.

By placing our faith in business and the private sector to provide our needs exclusively, including poverty services and charity, we are depending on a system that can change at a moment's notice.  The benevolence of an individual is dependent on that individual choosing to engage in an activity that is directly against his interest and being happy to do so.  And while we do have examples of individuals rising above their own wants and giving away vast amounts of money, it wouldn't provide the necessary stability to sustain and assist in rebuilding a person's life.  In the world today, there are dozens of individuals who have demonstrated great generosity.  But I fail to see examples of full-blown social poverty programs that are privately run that have been notable in helping people from rags to self-sufficiency.

Most Left-Liberals (which I identify as), argue that problems such as hunger, homelessness, and poverty affect society to a greater degree than asking for a little money to help those who have nothing.  The argument is that a starving person will follow their most basest survive.  And to survive, most human beings will do whatever is necessary to preserve their corporeal existence.  Starvation, severe inequality, classist social mechanisms and severe injustice are the root causes of political uprisings, and, while I believe we're definitely not to that point, I do believe that if we continue on the course we're on now, specifically in regards to business and economics, we may reach that boiling point.

Wealth inequality will continue to have a toxic effect on our society as long as it remains an unsolved problem.  The fear that many progressives had during the 1890s is that the corporate machine would exceed government power, and impose itself on the citizenry as the defacto true government.  The Mr. Monopoly Cartoon is a perfect example, shown above.  This sparked the Sherman and Anti-Trust acts of the early 1900s, and has been the basis for government regulating wealth distribution and concentrations of political, economic and monetary power.  The Sherman and Anti-Trust acts were responsible for the breakup of Standard Oil, Ma Bell, and several other super-large firms which threatened to unseat the duly elected government of the people.  Maybe not through revolutionary means, but by way of becoming so large that their departure from the economic stage would cause a severe disruption to society, therefore making their presence more important and their needs more important than that of the people.

There is no evidence historically or even anecdotally that the Free Market as Libertarians contend it to be have any interest in furthering the interests of anyone except those that consume their products, buy their stock, and seek their company for employment.  There has been no notable private interest that has taken the initiative to care for the poor in any great capacity that would be necessary to abolish the social safety net.  And what few private interests are present are too small to carry the entire burden by themselves.  Government-assistance programs are necessary to help move people out of the cycle of poverty and into a position where they can meet their basic needs then move to greater levels of need hierarchies.  The Libertarian view of society is an idealism, unrealistic, and naive.  The only real solution is a blending of private market forces with government oversight managing and responsibly regulating the activities of business to protect the interests of the people, and to ensure that government of the people is the only government present.


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