On free markets


Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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38 Responses

  1. Avatar gregiank says:

    Off topic. I am enjoying your posts over at BJ. I’ve seen some harsh stuff in the comments. Fuck em. And also it should be obvious but John is more then happy to tell people to fuck off, STFU and that they are spoiled pricks. And that is to his loyal commenter’s, so some heat in the comments is really to be expected.

    On topic. I think this makes sense. I might add that changes in the economy do deeply hurt. I very much agree with safety nets but i think what we have seen a lot in the last 20-30 years, and certainly in this recession, is that structural changes are not solved by safety nets. At best they are a band aid. That band aid is necessary but doesn’t really deal with the long term displacement. What to do about that is a real problem. Having long term high unemployment due to structural changes is a serious national issue. Most likely more investment in forward looking infrastructure and safety nets to help people through retraining are likely to be part of the solution.

    This all makes sense.Report

  2. Avatar dexter45 says:

    This post really does not say much. You are for free markets, but don’t say if you think we have a free market. Is a free market one where Americans have to compete with Chinese factory workers making an average of 87 cents per hour with no enviromental controls and the knowledge that if you say the word union bad things happen? Is allowing failure bailing out the banks so they can invest in foreign lands and make billions, is it a free market to bail out GM so they can invest in China? You talk about strutural changes. In 1965 I had a very menial labor job in a foundry making 4.50 per hour. That comes to 31.14 per hour in todays wages. That foundry moved to China. In 1972 I had a union carpenter job making 7.75 per hour. That equals to 41.71 per hour in todays wages. That job has been given to an illegal immagrant. So your structural changes are immense. What is never mentioned is that the jobs are not coming back, they are gone and will stay gone. The middle class got whacked by off shoring. All the money is either in petro countries, China, or Wall Street. Is that the free trade you so admire?Report

    • Avatar North says:

      @dexter45, Come on Dex, this is hyperbole. It is important to keep in mind, for instance, that the US is -still- the leading manufacturer in the world. The thing is that our sophisticated factories use more automation and smaller numbers of highly paid workers to produce it. Yes, a lot of manufacturing jobs have been offloaded to China. Chinese peasants who once starved in rural China now gets paid a meager buck an hour to manufacture stuff. This has lifted millions out of poverty. Once the Japanese, the South Koreans, Hong Kong and Taiwan were doing what the Chinese do now. But now they’re being paid more than the Chinese (though less than us) and now they’re buying stuff, both from the Chinese and us. We’re looking at a slow moving wave of prosperity as millions of people are elevating out of grinding poverty and growing the global economy. Certainly it’s far from perfect, there are serious questions about energy, the environment and other issues. But we’ve seen, both abroad and at home that growing economies create pressures for worker welfare. And, frankly, it’s the only game we’ve got.

      I mean what is the alternative? A trade war with China? They’re a growing global power but one that is keenly dependant on tolerable relations with its neighbors. Cutting it off from that network is an invitation for it to follow the old rulebook for growing global powers: aggressive wars to obtain resources and to placate its masses. I don’t think anyone wants that.Report

    • Avatar Sam M says:


      “All the money is either in petro countries, China, or Wall Street.”

      Well, not all of it. When a single mother of three goes to a big box store and pays $20 for a chair made in China instead of $60 for the same chair made in Kansas, sure, some of that $20 goes to China. But all of the $40 stays in her purse. Or goes towards diapers or the heating bill or… something made by an American!Report

  3. Avatar Smeldrick says:

    It would be interesting if there were a way to compare the per capita value of all current “safety nets” (worldwide) against the per capita value of all human labour extorted from the powerless by entrenched interests. What percentage of what is taken from the powerless by the rich is returned in the form of “handouts”? It would really blow me away if it turned out to be more than 1%.Report

  4. Avatar dexter45 says:

    Is it hyperbole if it is true? ” What is the alternative?” That is what I was, and still am trying to find out. How far does one allow the American worker to fall? I know that I have heard that the only thing worse than working in a sweat shop in a third world country is not work ing in a sweat shop, but I don’t think you fully understand the gravity of the situation for the blue collar people in America, the ones that produced all the wonders you see around you.Report

    • Avatar North says:

      @dexter45, Hyperbole takes something that’s true and inflates it beyond all reason. The point is that America still manufactures a ton of stuff, more than anyone else. And, to be honest, historically the post world war to 80’s era was a very unusual fluke. America was the only major economy in the world both industrialized and not flattened by war. We cannot expect those conditions to come back.

      I agree with you that American workers produced the wonders I see around me. Where we disagree is that I still see American workers producing the wonders around me. All the cutting edge stuff, the new stuff, the exciting stuff; made in America. Yes the Chinese are making our bathtub stoppers and plastic soup spoons? But as long as they’re willing to work for a buck an hour and american workers are (rightly) unwilling this is inevitable without trade barriers.Report

  5. Avatar Mike Farmer says:

    We’ll never preserve the American worker by force and government protection. American industries will have to compete by means of productivity, innovation, quality and expansion through the invention of new technologies. There’s no way China can continue with slave labor — it’s not a match to what we can accomplish with educated, motivated, well-paid workers — each American company will require fewer employees through productivity gains, right-sizing and technology advancements, and they will make good money — so we will have to expand throught start-ups to lower unemployment — but start-ups will only thrive in a free and open market with educated, skilled workers. So, along with a free market, we need a reformed education system free from government control.Report

  6. Avatar silentbeep says:

    I don’t have much to say other than: I like this post and I heartily agree. Approved!Report

  7. Avatar silentbeep says:

    regarding last comment: like you need my approval, but that’s besides the point. I think you get what I mean 😉Report

  8. Avatar dexter45 says:

    What exactly is the cutting edge stuff that you are buying that is made in America? You see cutting edge stuff and I see unnecessary stuff. I don’t own a mobil phone, ipod or most of that useless stuff. I do own my house and two acres of land so it won’t be as bad for me as for you when it finally hits the fan. You strike me as a person with a brain so I suggest you do a little research and find out how much money has been transferred to the uberrich. Galt won the culture war and plumed princes run things. Finally, what exactly did I inflate in my first post.Report

    • Avatar Plinko says:

      @dexter45, What’s necessary that’s made in China, then, if it’s only junk we make here?
      If all you need is a house and land, what are you looking for that’s made abroad? It’s the Chinese in a precarious position with over a billion people in a smaller area than the US with a lot less arable land should the world economy collapse.Report

      • Avatar North says:

        @Plinko, Indeed, as the saying goes: “If the bank lends you a hundred thousand dollars you’ll sit up at night worrying about the bank. But if the bank loans you a hundred million dollars the banker will sit up at night worrying about you.”Report

  9. Avatar ThatPirateGuy says:

    I’m a programmer so a big part of my job is making most office staff redundant. Combined withe other automaters/world shrinkers out there what exactly do we do when we realize that there are more people than people we need doing stuff? Every-time we improve productivity we get the great benefits but we also make more people irrelevant.

    We shouldn’t get rid of free markets. Average people are still so screwed because the one resource that the world will not have a shortage of again is people to do work. Barring a horrific catastrophe we simple are not going to run out of workers. So I really can’t see a world where labor doesn’t get kicked in the teeth.Report

    • Avatar Simon K says:

      @ThatPirateGuy I find this idea odd – that somehow when we make people more productive we make them unnecessary and therefore somehow do them harm. Not picking on you TPG – I think about it that way myself a lot of the time, but when I look at it from the perspective of what I actually see around me rather than what I hear on the news I find it oddly inconsistent.

      There are two things you can do with improved productivity – you can make more stuff, or you can use less people. Are we really saying that in the long run our response to this is to use less people? In other words that large numbers of members of our species are so totally useless that just because there’s not much call for filing clerks or widget flippers any more we might as well just sort of shelve them in high-rise housing estates somewhere out of site, give them food stamps and make sure they don’t cause any trouble? Because if so I find that so sad I might go and kill myself.

      I mean, there was an NPR story the other day about 99er – people who’ve exhausted all 99 weeks of possible unemployment, supposedly after apply for thousands of jobs, and just can’t find anything. I just find it almost unbelievable that anyone is really that (literally) useless! I mean, wouldn’t you do something? Mow your neighbours lawns, start a business making papier mache cats, deal pot. Something! How on earth can anyone spend 99 weeks applying for jobs and not think at some point “Hey, that idea I had about becoming a professional clown, maybe I could do that? After all, this sending out resumes business is pretty tedious and doesn’t seem to be getting me anywhere.”

      Okay, so I’m starting to sound like my reactionary grandfather here. But really, there’s something messed up about the way people think about work – as if it was just a matter of letting someone push you around for 8 hours a day in exchange for money and nothing to do with, y’know, actually working at something.Report

      • Avatar Simon K says:

        @Simon K, Bringing this back to ED’s article, I think well-designed safety nets help a lot here. If people can be confident they’re not going to end up with no means of support at all, they should be more willing to take risks and make good use of their talents rather than going for the next filing-clerk job that comes up and getting turned down or laid off again, because really, filing-clerks, not so necessary any more.Report

  10. Avatar TGGP says:

    “these many programs that make a market economy and society possible to begin with.”
    There were no market economies before the welfare state?Report

  11. Avatar dexter45 says:

    I did not mean to imply that what is made in America is junk, only that it is not needed as much as wanted. Besides, what bright shiney thing do you own that was made in America? It might have been created in America, but the factory that made it is probably in Asia. All I was asking is how far one lets the American worker fall. Do the conditions devolve into Chinese sweatshops? There was an article I read the other day about one factory were people were comitting suicide because the conditions were so bad. Do we, as a Christian nation, buy things from that factory while saying that workers have to take it in the teeth. That is all I want to know. How far do we allow our fellow humans to fall so the rich can get richer? This site is full of liberatarians so I want to know if free trade is good when your neighbor is hungry? That pirate guy says we have to take it in the teeth, but what happens when his job is sent to India?Report

    • Avatar North says:

      Dexter, I will emphasis again that America manufactures the most stuff in the world. More than China, more than any of them. Plenty of it is needed and plenty of it is wanted as well. I’ve never understood the nativist obsession with manufacture but even by that limited criteria America continues to manufacture a ton of stuff.

      Beyond that the question is what can be done to prevent labor competition that doesn’t cost you the benefits of free trade? The American worker in post war to the 1970’s era was in a unique position, one that will likely not come again.
      If you’re talking about consumers in general deciding not to buy products made in inhumane factories then I’m all for it. Problem is most consumers only care about one thing; the bottom line. Also, the “Christian Nations” have been buying things made at as low as literal slave wages (made by slaves in fact) for as long as nations have existed. The nonchristian ones have been as well.Report

      • Avatar Steven Donegal says:

        @North, This has always been the dilemma of capitalism: how much of the spoils of capital must be shared with labor to keep labor from revolting? At the turn of the 20th century, this country was on the verge of class warfare. Two world wars and the economic boon of being the only country left standing produced economic conditions that made laboring people more prosperous than they had ever been. The promise was that this would continue. People are now realizing the promise was a lie. Our economy will only be better for some of us, and for the rest of us, well, good luck. Be glad you live in the most prosperous country on the planet, but don’t ask for too much of that bounty, because we really can’t afford it.

        Frankly, this is why the prominence of the TeaParty right is frightening. Those folks aren’t ok with the safety net. They basically want it gone (except of course the part that they are lying in). If that happens, it will take a long time to put this country back together.Report

        • Avatar North says:

          @Steven Donegal, I pretty much share your sentiments I think. Certainly as a filthy neoliberal my primary interest is how to bring the greatest prosperity to the most people. Which places me pretty much in line with E.D. and Hayek, not terrible company to keep.Report

  12. Avatar Jason Kuznicki says:

    You are saying, in other words, that you stand with F. A. Hayek. Not a bad place to be. The above was his program too, social safety nets most definitely included.Report

  13. Avatar Bob says:

    Free markets, both a sanitized and totally anonymous term, seems to have replaced capitalism and capitalist as the preferred term to hoodwink the public. Some PR firm is earning their pay.Report

    • Avatar Mike Farmer says:

      Yes, socialist overlords are much better. I’ll take Stalin over Bill Gates any day. Those damn capitalists! I’m chained in Iphones and $200 sneakers. Free us from stuff!Report

      • Avatar ThatPirateGuy says:

        @Mike Farmer,

        Why yes Mike those are the only two possibilities Stalin and Bill Gates. It isn’t like we can look at Europe or Canada and see mixed economies that feature something other than totalitarian hell-scapes.Report

        • Avatar Bob says:

          @ThatPirateGuy, correct.

          I see absolutely no point in using such an empty term, free markets, today and probably since the first states provided roads and military power to promote and protect trade.Report

          • Avatar E.D. Kain says:

            @Bob, I’m just not sure how you’d prefer to speak about it then. Non-intervention into market economies. Hands-off economics?Report

            • Avatar Bob says:

              @E.D. Kain, neither suggestion goes to my point. Free markets, just as free lunches, don’t exist. What we have, and always have had, at minimum, are state supported markets.

              Does anyone really believe that no governmental action, either in support or regulation of markets, is desirable? Would free market types like to see the end of governmental interference in the granting patents or copyright protections?Report

  14. Avatar ScottinAL says:


    I forwarded this posts link to my brother, who like you is a big believer in free markets and is much more to the right of me on government / markets issues.

    Here is how our conversation went.
    MY BROTHER: His conclusion does not follow from his premise.
    ME: Hmm So you believe his argument is fallacious. Let’s try this. Find the fallacy.
    1) WHEREAS, free markets, by definition, have failures
    2) and WHEREAS minimizing the negative impacts of those faIlures to society at large benefits the continued growth and “freeness” of free markets and encourages the entry of new businesses, people and products into those markets.
    3) and WHEREAS government social safety nets help to minimize the negative impacts of free markets
    government social safety nets benefit free markets
    There is a syllogism. Where is the logical flaw?
    My main point is that the argument that social safety nets make markets work better is just silly. I am not saying we shouldn’t have any social safety nets.
    I dont think he is arguing that though.
    I think he is arguing that having them is the price we should pay for keeping our markets free.
    ompare what you said with the syllogism you presented earlier. Still, my original critique holds. He says”but yes also on safety nets, on health care, on these many programs that make a market economy and society possible to begin with.”
    In what reasonable sense does a social safety net make a market economy possible?
    He does say that. And you’re right that safety nets don’t make free markets possible. I think the last sentence should read more like THIS:
    “but yes also on safety nets, on health care, on these many programs that make a market economy and society –healthier and therefore more sustainable in the long term.”
    So E.D. he asks a valid question, in what sense do safety nets make free markets “possible”Report