I get tweets. I had an exchange with a Buddhist friend on Twitter over “the market” and a few other items. The following is just a representative example of a tweet she sent to me.
@MarkStoval The “market” is not a god, and it is comprised of humans and all that being human entails, for better or worse.
She also tweeted that Rothbard and Rand were the same. I think I got her straightened out on the fact that Ayn Rand and Murray Rothbard were not of the same opinions. I hope everyone knows that they had a famous war with each other for a long time. Rand kicked Rothbard out of her little cult for having the nerve to disagree with her. I also hope that none of my readers think that anarcho-capitalism is the same as Ayn Rand’s “Objectivism”.
But the topic is the “market” and its role in our society. What is the “free market”?
Murray Rothbard on “The Free Market“:
The Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a news dealer for fifty cents, the news dealer and I exchange two commodities: I give up fifty cents, and the news dealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager (an agent) with the authority to hire. Both parties undertake the exchange because each expects to gain from it. Also, each will repeat the exchange next time (or refuse to) because his expectation has proved correct (or incorrect) in the recent past. Trade, or exchange, is engaged in precisely because both parties benefit; if they did not expect to gain, they would not agree to the exchange.
I had asked my Buddhist friend if she believed in the non-aggression principle and she responded that he did indeed believe in non-aggression to the point of being a pacifist. I am not a pacifist and neither was Rothbard in that we believe that one must respond to aggression or invasion by resisting the attacker. I would certainly use lethal force on anyone who attacked my wife for instance; but I would never initiate violence against anyone. However, both of us have stated that we believe in the non-aggression principle and that leads ultimately to the laissez-faire market since the NAP rules out force, fraud, and coercion.
With the above setup out of the way, what can a Taoist say about the market to a Buddhist (or anyone else) about the Tao of The Free Market? Tao (pronounced “dao”) means literally “the path” or “the way.” It is a universal principle that underlies everything from the creation of galaxies to the interaction of human beings. It is the absolute principle underlying the universe, combining within itself the principles of yin and yang — the workings of Tao are vast and often beyond human understanding. In like manner the workings of “The Market” are also beyond our effective control if not beyond our understanding.
The “free market” just means the free, voluntary, cooperative exchanges that happen Trillions of times a day on planet earth. Sometimes you trade with yourself! You exchange some leisure time to go work with children because that sort of charity makes you feel better about yourself and the world. Sometimes a man trades his time watching a football game to do something else for his wife. Sometimes you simply trade a dollar for an apple because you value the sweetness of a ripe apple at that exact time more than the dollar. Many of us trade our time and talents to an “employer” for money and other benefits. The employer is trading money and benefits for the value the organization gets from your efforts and knowledge.
A young boy used Craigslist and and old cell phone to trade up to a Porsche car over a two year period involving 14 trades. Every trade involved two sides who were both happy about the trade. (subject of my post for next Wednesday) In a totally free laissez-faire market, every trade is made because both sides of the trade expect to be better off after the trade. How can this be? It is because at the time of the trade both sides have different subjective opinions on the worth of the goods or services to be traded. Both sides walk away a “winner” because both sides got something that they valued more highly than what they gave for the good or service. But that is when the trade is a free will, voluntary trade with no coercion, violence, threat, or intimidation involved. Many exchanges in our country today (and most of the world) are not at all free will exchanges. There may well be trillions of laws, rules, regulations, interpretations, and other barriers to a really free market. Some market anarchists have called for ditching the term “free market” as we don’t have one and those ignorant of economics think that we have a “free market” — they call for using “freed market” to mean laissez-faire markets.
Most, if not all, trades in our country are coerced trades where a third party (the government) becomes part of the trade, and that is because we have an economically fascist or corporatist system. The government is involved in every aspect of a citizen’s life. Some say we actually follow the mercantilist economic model and some call it the “crony-capitalist” model. Regardless, the robber benefits at the expense of the coerced and the robber is the state. As the Austrian School of Economics has pointed out for generations, every intervention by the agency of force (government) reduces the wealth of the country. It makes some elites very wealthy but the common folk suffer from the intervention.
And so, my Buddhist friend, the “market” is not “god” but is the principle of free humans acting on their needs and desires by cooperating in a peaceful and voluntary manner. It is the root of the “division of labor”. Perhaps the word “market” is tainted in your mind due to people calling our present system a “free” market when it most certainly is not one. Try to think “market anarchy” or “laissez-faire free market” when someone talks about “the free market”. (if they really mean “free” of course)