On Free Markets

I continue to believe that the libertarian philosophy sounds good in theory, but in practice does not work. I feel as though pure libertarian philosophy works in the same universe that pure socialism works, aka one in which human nature is something other than it actually is, and I want to put down a little bit of why, because I'm tired of making this argument, and I'd like to have it consolidated in one place.

Part of the problem is the "some of something is good, more of that thing is better" philosophy that people so often fall prey to. Think of water. If you're in a desert and have been for a few days, it's hard to imagine there ever being TOO MUCH water. But if you're in a tsunami, it's hard to imagine ever WANTING for water. It's all a matter of the middle ground.

In our American diet, we eat too many fats, and so a lower fat diet is good. A diet that eliminates ALL fat is bad, and we would die if we followed that for too long.
This, I think, is a large part of my philosophy on life: It is a continuum. There isn't a binary state between liberal and conservative, there is a continuum, and it's OK to be a bit more liberal on some things and a bit more conservative on others, and find that in just about any area of life, you will find people who exist further to the extremes on BOTH sides of you.

I find it very odd that libertarians regularly make the argument that smaller government would "stop screwing the little guy", while the big money players all push for smaller government because they know less government would mean less regulation which would mean making more money. So who is government really helping, the little guy or the big guy? I'm inclined to believe the that the little guy is being protected a whole lot more than he's being harmed.

For the free market to work, we have to have a number of things which are simply not in evidence in human nature: a good source of reliable information, the ability to efficiently process information to filter out the BS and only keep the good information, the time and organizational skills necessary to keep that information on everyone we have business dealings with, immunity from advertising, and a tendency to look to the long term over immediate gratification.

Taking these one at a time.

Good source of information we have, but we have TOO MUCH of it. We're inundated with it, and it is simply not possible for most people to process all of it. As I write this, there's a minor kerfuffle over Barilla brand pasta because one of their executives said something homophobic, and right now, that has our attention. But as we go to the store and buy our Prince pasta and think we're taking a stand against Barilla's homophobia, we are ignoring the fact that many people simply aren't even aware of this issue (and so our token protest probably doesn't even amount to anything), and also that we DON'T know what we don't know about Prince. Let's say for a moment (and this is all hypothetical, none of it is true to my knowledge) that Prince dumps toxic waste products directly into a lake near their factory, or produces their pasta in a sweatshop, or donates money to white supremacist groups. But we aren't aware of it, and so while we think we're doing something good, perhaps Barilla is actually the LESSER of the two evils, and we've gone the other way because we didn't get the good information.

Reliable filter we certainly don't have. I've told the Bubble Yum story before, but here it is again: When I was in high school, and Bubble Yum bubble gum was a new brand, I remember it was “common knowledge” that Bubble Yum had been found to contain spiders eggs, and that there had been at least one instance of a child biting into a piece and finding a mouth full of baby spiders. It was, of course, complete BS.

Now, imagine that Hubba Bubba had in fact that very problem. To get out in front of it, they start a viral marketing campaign convincing everyone that it is Bubble Yum that has the problem. Eventually it blows over.

Now, when it comes out that in fact it is Hubba Bubba that has the problem, how do most people react? Either with brand confusion, saying “Oh, that’s old news, it wasn’t true” and dismissing it, or saying “Oh, well, I guess they all do it” and dismissing it, or saying “Yeah, fool me once, shame on you, it wasn’t true last time, why should I believe it this time?”

When someone has the monetary equivalent of a bullhorn, they can control (to some extent) the information flow, and the free market does not work as it should.

Immunity from advertising we definitely do not have. I've also told the Coke vs Pepsi story before, but again, here it is: In college, my friends and I were pretty evenly divided into the “Coke people” and the “Pepsi people”. We each sort of privately considered our cola of choice to be the best and couldn’t really understand how the other side could drink that “sewer water”.

So one day, we decided to do a blind taste test. Not double blind, maybe not scientifically valid, but it was good enough for us. So we bought some Coke, some Pepsi, and some RC Cola as a control.

And guess what, the RC Cola (which cost about 20% less than the other two) won the taste test. Almost universally, we preferred its taste over the big two.

And yet within a fairly short period, the Coke people were back to drinking solely Coke, the Pepsi people were back to drinking solely Pepsi, and I (as the lone guy still sticking with the RC Cola) being looked at kind of funny when I’d grab the RC on a shopping run.

Time and organization to keep it all current I sort of already covered in the first section.

Prioritizing long term good over immediate gratification we absolutely don't have, and if you think we do, just look at the obesity problem in our nation. With all of that tasty fast food around, so very few of us are willing to say "Hey, I'll be a lot healthier throughout my life if I don't stop for that big mac as a snack between meals".

Look also at shopping. How many people decry some of Wal*Mart's business practices, and yet how many of us shop there, because we can find the same things there at a significantly cheaper price than we can most anywhere else? Would it really make the majority of people be willing to spend more just because they knew product x was made in a facility that polluted heavily, when given the choice between saving money NOW vs. the threat of an unlivable environment LATER?

And the free market people say "Well, if people value cheaper products over clean air and water, then the market works, and whose business is it to force them to make a different choice?"

And to that I say two things: Sometimes, we really DO need someone to look over our shoulders and make sure we do the right thing. But more importantly, things like pollution affect EVERYONE. So without someone saying "Hey, we need to protect the commons", I can spend twice as much as everyone else for environmentally conscious products, and if almost no one else does, all I've ended up doing is spending more money and STILL having to live in a world with air I can barely breathe and water I can't drink.

It's SO very easy to make the free market case (and so many of the other cases we hear these days) when you have it good. We have generally clean-ish air and water. We have relatively safe and effective medications. We have a relatively safe food supply. (And if you point to the exceptions to claim we don't, let me point out what a big deal it is when we hear about an e-coli outbreak. They happen so infrequently that it's a big deal when they happen!)

If we enact libertarian philosophies, and in 25 years we have to purchase all of our water from industrial purification companies because the ground water is undrinkable, and have to wear masks when we go outside because the air is toxic, I'm pretty sure at that point no one is going to be objecting to a little government regulation to keep things clean and safe.

We have a good road system, so it's easy to complain about having to pay for it, because we don't see what it would be like NOT to have one. We have a strong military and generally effective policy/fire/emergency teams, and a generally fair judicial system. Is any of it perfect? No, nothing made by humans ever will be. But when things are at their best, it's easy to forget or ignore the level of effort it took to GET them there and just object to having to do your part.

Now, having said all of that, don't take ANYTHING I've said here to mean that I don't support capitalism. What I'm arguing against is the extreme. Absolutely there are aspects of the capitalist, free-ish market system we have which are vital to the way our country runs, and a lot of progress would not be made without the potential to reap rewards for taking the risks. But honestly, I don't run into very many people (other than caricatures and straw men in the minds of the right wing) who truly advocate for a fully socialist society here in the U.S., while I DO hear people claiming that completely unregulated free markets would cure a lot of the problems we have and do so more efficiently than government does, and with less corruption and bloat, and that is the argument I simply find unsustainable.