On free markets
So, just to clarify a position I hold: My belief in free markets is based in the concept of failure. I believe in markets because I believe they allow for failure to occur. Also, I believe in markets not because I think they will lead to some magical realm of prosperity for everyone, but because I distrust the alternative more. I think our interventions into free markets have enormous capacity to do harm either directly or indirectly.
This is why I also believe so strongly in safety nets. If we believe in markets because they allow for failure, if we believe that the organic nature of a free society is preferable to one that is planned or managed or riddled with tariffs and barriers to trade – then we must also accept that society is full of cracks. Failure leads to suffering. We need to alleviate that suffering. We need to pick people back up and put them on their feet again, either through health care benefits or unemployment benefits or grants for school and so forth (or really all of the above). So I say – yes on markets, yes on freedom of trade and labor – but yes also on safety nets, on health care, on these many programs that make a market economy and society possible to begin with.
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"
Scott’s phrasing may be better – “sustainable in the long term” is exactly what I mean. But it’s not really any different. For a market society to exist it has to be sustainable in the long-term. The moment the market begins to function, i.e. there is widespread failure and the corresponding adjustments, people will find themselves falling through the cracks. This will necessitate political reaction. Worst case scenarios would be out-an-out revolt. More likely, in a democratic society, there would be some response such as increased regulation, protectionism, etc. or the rise of a powerful labor movement. In other words, the free market society in question will cease to be free quite quickly when uncertainty and the inevitable pains of a functional free market begin to be felt. So Scott is exactly correct when he says, “I think he is arguing that having them [safety nets] is the price we should pay for keeping our markets free.” This is exactly what I meant by this post.