Posted by Jack Stephens on October 13, 2008
Markets, if not an expression of aspirations implicit in human nature, are supposedly indispensable to any happy human prospect. Free market ideology has it that markets are the most efficient delivery system for goods; that competition will drive innovation and flexibility; that consumer-led demand will ensure that people get what they want (within their means); and that waged labour will incentivize hard work and thus produce growth. This fabular conception advises the most rudimentary assumptions of policymakers (who then go on to violate their own assumptions in practise) and a great majority of the intelligentsia. And, within its own terms, it has a certain allure. It is not obviously utopian, and doesn’t assume basic human goodness. In fact, it states quite bluntly that what humans had often considered the main source of evil, the accumulation of wealth, was the progenerator of unprecedented good. Adam Smith thus famously argued: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own neccessities but of their advantages.” Moreover, in the context in which the classical liberal economists were writing, it made a great deal of sense. The absence of that context makes any attempt to apply such precepts to today’s reality absurd.