Re: Will the free market solve everything?

Lee Daniel Crocker (
Tue, 25 Feb 1997 13:01:22 -0800 (PST)

> It was not a complete description. I make no appologies for that
> since covering all the bases would have turned a paragraph into a
> documentary. To do so was not necessary to the point I was making.

I'm all for brevity; I use it (perhaps too much) myself. If I
misinterpret your elided meaning, please clarify. But what I think
you are referring to is the very common perception of libertarian
ideology that we have naive faith that free markets solve lots of
human problems and makes everyone peaceful and prosperous--in short,
the L. Neil Smith fantasy world. It is my contention that very few
of the libertarians I know are like that. Most are more accepting
of many present systems, wanting to change things in the free market
direction where they feel it is needed. Some, like me, hold moral
positions that the free market is a necessity, but even we don't
think it will be without problems. We just believe problems in a
free market are created by reality rather than by the state. I
recognize reality's right to create problems for me; I make no such
grant to any state.

> > "Stable" is exactly what a free market isn't--and why it's superior
> > to any possible planned market. Stability is stagnation. Stability
> > is death.
> By "stable" I only mean that it remains productive, as opposed to
> grinding to a halt or exploding in a conflict. I did not mean to
> imply that it is unchanging.

Even that limited definition fails for all systems, including the
free market. Booms and busts are a natural consequence of supply and
demand; accidents, disasters, blind-luck discoveries, and other events
happen all the time that would destabilize /any/ system. I happen to
think a free market will handle such conditions deftly and quickly.

> "Highest correlation of effort with reward" is something I would
> include in the definition of "fair". Might also add some degree of
> equality of opportunity.
> Lack of coercion is a desireable ideal, but it is not the feature
> that makes free markets successful. It is the promise of reaping some
> reward in return for your productivity. Without a reasonable
> correlation of effort with reward, and without a reasonable
> opportunity for success, then the incentive to produce disappears.

I agree completely (except for your words "desirable ideal"; I would
use "necessary precondition"). It would be "better" in the sense of
more productive and fair, in your terms, if there were a higher
correlation of effort and reward. I cannot, however, conceive of
how that is possible to achieve without constraining and controlling
every human in the system and choking all creativity. The fact is,
random events will occur. Rich brats will inherit their productive
father's estates and squander them. Bums will win lotteries. Which
scientist makes a critical discovery is more a matter of chance than
either the scientist or Rand would like to admit. These are just the
facts of reality, and trying to change them is like arguing about
what value of pi would be "best".

> Without those two elements, you are left with something that is no
> more productive than pure socialism. Perhaps even worse since even
> coercion is more effective than no incentive at all.

This I have to disagree with completely. Yes, the free market does
not ensure a perfect correlation between productivity and reward.
No system possibly can. But it /does/ achieve more than enough of a
match to be incredibly productive, and far more than any socialist
system could.

> Are you arguing that these ideas, whether you include them in the
> definition of "fair" or not, are not an integral part of the
> Libertian ideal of a free market economy? It is because of these
> elements that capitilism has enjoyed such success.

Some people's ideals maybe. I think most are more realistic than
that. Maybe not. Maybe they really do believe the L. Neil Smith
nonsense. But not the ones I know.

You ask me to recognize that there are "problems" with capitalism
that libertarian ideology doesn't deal with. That's two claims:
(1) Capitalism has problems, and (2) Libertarians don't deal with
them. The first I concede: yes, capitalism has precisely those
problems that the nature of human life and reality have--but without
those additional ones created by states. The second might be true,
but I think it may be an impression left by the fact that the most
vocal libertarians tend to be the most evangelical, and don't like
to talk about problems even if they do recognize them.

Lee Daniel Crocker <>