Free Markets vs Intervention

In “Irreconcilable Differences” Barry Liebling suggests that the reason free market advocates and those advocating government intervention can rarely agree  is that “when you drill down, the conflict between conscientious free-marketers and interventionists is not about facts or about what people are likely to do. It is about values”

He goes on to explain that “the core premise supporting the free-market is individual rights. Every person has the right to life, liberty, property, and the pursuit of happiness. This means that all economic exchanges must be by voluntary mutual consent.”

In contrast, he suggest that “the assumption of the interventionist is that society and the state take precedence over the individual. It is the group that counts and has rights. Thus, interventionists focus their attention on ‘social justice'”.

Both by his writing and the publication he writes in, Liebling’s prejudice on the matter is fairly clear. And his presentation a bit unbalanced. But his fundamental argument is true: “Principled free-marketers and interventionists cannot reach consensus because they have incompatible visions about how people should live”.

My sense is that the issue is deeper. And I will clearly reveal my own prejudice toward the free markets perspective.

In my experience, those favoring intervention tend to see the world as a zero sum game, where in order for one party to win, someone else has to lose. Thus differences in wealth are viewed as wealthy individuals depriving others. In regulatory matters they tend to view  private for-profit enterprise as selfish and less worthy than government and non-profit endeavors.  They seem to generally view business and regulatory transactions as one party winning at the expense of the other.

Free market advocates tend to see the world from the win-win perspective of opportunity and creativity, with the overall wealth of society being created and increased by human endeavor and the mutually beneficial transactions of the parties involved. We tend to believe  people generally enter voluntary transactions only if they are mutually beneficial.

Interventionists tend to value control and predictability of outcomes, while free market advocates put higher value on opportunity and creativity.

Interventionists tend to want to limit change and risk, and are willing to change the rules of the economy to preserve stability. Free marketers fundamental premise is that our role in the world is to create positive change and we are more willing to accept the risks to make that happen. But we see an essential need for stable rules of law and economics in order to be able to understand the risks we take in the marketplace and make the long term commitments necessary to see our creative endeavors to fruition.

There are several areas where the two groups can generally find consensus, like the mutual distaste for fraud and crime which Liebling points out. Thus folks on both sides of this divide are angered by the corruption of some of the current economic mess our society is facing. But naturally, one side blames the government while the other blames an under-regulated market, and in a society empowering certain well connected players to rewrite their own rules for the economic game, both sides have some truth to support their positions.

The fundamental differences go deep. This is the root source of most of my political and philosophical differences with my friends in the environmentalist community, many of whom tend to view the world from an interventionist perspective and see the clearly obvious limits on natural resources and ecosystems as insurmountable limits to human endeavor.

I cannot accept where the moral logic of that view ultimately leads, in the need to be brutal in limiting human populations.

My own perspective is that while ecological and natural resource limits are unquestionably very real, it is the unbounded abundance of human creativity which is the truly critical resource in the world. In a world of freedom, peace and stable rule of law, human creativity can overcome the challenges we face.  My biggest problem with excessive government intervention is that ultimately it will lead to conditions that stifle the essential creativity and innovation we need to address the difficult challenges ahead.

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Filed under Best Stuff, Environmentalism, Fundamental Perspectives

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