Here’s a series of questions, challenges, and responses about a free market. It started on Facebook, but went to a blog and carried on.
Matt Petersen –
“Carson Spratt and I started having a discussion on a third friend’s facebook wall. I didn’t want to hijack the thread, so I’m bringing the conversation over here.
In response to my claim that “free markets” are not necessarily any more “free” than “free love is”, and so the syllogism “free men therefore free markets” is no more valid than the syllogism “free men, therefore free love”:
“Now you’re equivocating on “free.””
Since I’m not defining “free”, but asking for a definition of a “free market”, I am not equivocating. If “free market” means “Markets freed by the freedom of Christ”, it is not obvious that so called free markets are in fact free markets, and we would need to argue that free markets means free markets in the common sense. On the other hand, if “free market” has it’s usual definition, it’s not obvious whether free markets are created by Christ’s freedom, or destroyed by Christ’s freedom, and either direction needs arguments.
What we cannot do is use “free” as a substitute for argumentation.
Then he says:
“A free man, who bows the knee only to Christ (which is true freedom) will not serve wealth, but will seek it out as a good and God-given tool. A free man will ensure that he does not infringe his neighbor’s freedoms. A free man will encourage trade, diligence, and prosperity. A free market will imitate these things.”
But since he’s defined “free market” with the usual definition, the last statement is not necessarily true. That is, he still needs to argue that “free markets” promote the ends he describes–that is, that they are truly free.
Next, in response to my claim that “free men make free markets” treats human freedom as a means to the end of a free market, whereas this is backwards, man’s freedom is greater than the free market, and (as argument above shows) freedom of a market is subordinated to freedom of man, he says:
“About ends and means, yes. That’s how creation works. God was a means by which earth was made. Men are the creators of markets, and thus they too are means. There are various types of means, and I’m not sure how being a means of something is objectionable.”
As an aside, God was the means by which the earth was made, but God is also the end of all earth, and God Himself, in the Incarnation, was the end of creation. But the question isn’t whether men are the means to a free market, but but whether the freedom of men is a means toward the greater thing, the freedom of the market, or whether the freedom of the market is a freedom of the greater thing, the freedom of man. (And man’s freedom is a means of the freedom of the market only inasmuch as the freedom of the market is a means to other men’s freedom.)
That is, we should define freedom of the market as that which helps or encourages or allows men to be free–that is, to willingly pursue the good–perhaps particularly, in their market dealings. And while a “free market” may be truly free, that judgment needs argued for, and cannot be assumed.
Finally, Carson concludes:
“As to ends, nothing is an ultimate end except God. But there are mediate ends, one of which is making free markets because God told us to.”
But this last point, again, turns on the definition of “free market”. Is a “free market” truly free? Or is it only called free, but is not in fact so? This point needs argument.”
And here’s some responses in the comments:
Carson Spratt –
“I wasn’t actually looking for a debate, so this is my last statement.
You made it through a whole response without defining what I meant by a free market, or what you meant by a free market, although you said I defined it in the usual way. But somehow you managed to bring a distinction between free markets and free men, directly the opposite of my point, which might be an intimation that you don’t have a great handle on my position.
A free market is one that participates in (is under) the freedom of man. There is not one kind of freedom for markets and another kind for man. There is only one true freedom, and it is serving Christ.
Because there is only one true freedom, free men and free markets share important qualities, which I listed above.
Thus, freedom for the individual man starts in Christ and spreads to the other spheres of his life. Civil liberty is one consequence (end of slavery) and a free market is another result. This is basic Gospel infectiousness, yeast, etc.
A last note: while the “usual” definition of a free market might not mention Christ, the principles therein are organically connected to the Gospel. The system can work (for a time) without acknowledging its source, just like an unbeliever can live while denying God. Today’s markets in the U.S. tend not to be free in the usual or classic or Gospel sense, but the impetus and efficiency which they retain find their source in an older, godlier society.
I hope this clears up any confusions you may have had regarding my position, and I also hope that you agree with me. Although you’re free not to.
In response, Matt Petersen –
“Carson: I think I agree with the first four paragraphs. But the question is, when we define “free markets” in that way is: Are markets in an economic system in which prices are determined by unrestricted competition between privately owned businesses, free markets?
If we define free markets as above, then we need careful empirical observations, and theoretical examination to determine whether markets in an economic system in which prices are determined by unrestricted competition between privately owned businesses are in fact free markets.
And I have not seen a willingness to engage in either the empirical or theoretical arguments.
As to why I didn’t define it: I’m asking you to define it and be consistent with your definition.”
And in final response, Carson Spratt –
“The reason that kind of market is free is because (and this really is my last word) the consumer and the company both freely engage in commerce. By choice, the consumer chooses who to buy his product from, and his demand sets the prices. The prices are not, as you stated, ever set merely by the companies (except in the case of monopoly, which is dangerous, given human greed). It’s simply untrue that the business sets the prices. When the buyer has a range of options, he chooses the most advantageous one. If he thinks the prices are too high, he doesn’t buy, and the prices are adjusted downward as a result of his actions. If anything, in a healthy capitalist economy, the prices are always set by the consumer. Supply and demand are a law that cannot be safely messed with: they work naturally. Not because we say they will, but because the laws of supply and demand are merely a reflection and description of how humans naturally act. In other words, the laws of supply and demand can never be removed from the market because the market will always involve humans. (I suppose you could find a counterexample to that last statement in the bot-trading that goes on in Wall Street: but even then, the prices they trade at are based on human demand for and confidence in various products and businesses.)
This is not to say that today’s U.S. economy is a healthy capitalist system. In fact, because of government intrusion, prices are adjusted contrary to supply and demand, creating artificial value that doesn’t reflect consumer demand. Sooner or later, the consequences set in, and they already have.
So, to sum up thus far: unless there is an unrighteous monopoly being exploited by greed, prices are created by the consumer, not the business. Prices set by consumer demand are an expression of the freedom of the consumer to buy what he pleases, and the conformity of the business to public demand.
Now you may object that this might not be fair for the businesses: to compete with each other, they must lower prices and cut into their profits. This is a good observation: but look further down the line. This same competition spurs the companies to wise stewardship of their resources, becoming more efficient with what they have. The primary way to increase profits in a business is to become more efficient and use less resources. Good for business, good for the world, better for the pocketbook of the consumer.
Not only that, but the competition does not only occur when two companies are selling the same product. It also occurs when, to get a edge on their competition, a company develops a better product. Now the consumer has a better product available to him, and the company is making more money. This spurs development, research, and progress in general, which is good for culture.
Once you address the fallacy that “businesses create prices,” and see that consumer’s freedom creates healthy competition and drives progress, the concept of a free market, based on competition, is a great thing.
Thanks for the discussion!”