Can We Do It Better?
Free-market capitalism operates differently from the way it is described by economists / politicians.
Given the significance of capitalism in our lives, “We the people” might profit from discussion of this difference, which I propose to offer in sequentially numbered installments.
Your comments, of course, are welcome.
Free-Market Capitalism—a phrase with strong popular appeal, is to my mind a description of a wish-dream.
It doesn’t exist.
Our belief that it exists interferes with our ability to do capitalism better.
Consider—in a truly unregulated market…
There would be no zoning laws. There would be no licensing requirements for doctors, nurses, lawyers, electricians, plumbers, veterinarians, cosmetologists, bar tenders, waiters/waitresses, insurance salespersons, psychologists, real estate agents, and others.
There would be no building codes.
There would be no schedule of controlled substances.
Selling and buying slaves would be legal.
Anyone could sell or buy any type of firearm. Hygienic laws for food factories and restaurants wouldn’t exist.
There would be no maximum permissible interest rate. Corporation officers would not be legally required to function in the financial interests of stockholders.
Regulation is assumed to be a negative influence on the (assumed-to-be-flawless) operation of the unregulated market. People must be totally “free too choose” if, when, what, where, and how to sell or buy. The free-market form of capitalism seems based on an assumption that no corrective whatsoever will ever be necessary to check the negative manifestations of human nature. ¹
Lets play “What if…”
“What if…” the government decided to get real on the subject of—lets call it the “Sexual Services Industry”, SSI for short, concluding that the world’s oldest profession, being ever with us, practical regard for public health and safety required the following:
Within a given municipality, all SSI workers would operate within a single precisely defined red-light district, the sole legally permissible area of operation, with substantial penalties for setting up shop off the reservation. All would be required to purchase a license to practice, which could be suspended or revoked for cause, such as flunking periodic mandatory testing for sexually transmitted diseases, (STD’s). In addition, all SSI workers would pay income tax, the proceeds of which, together with licensing fees, would help to finance the licensing, medical testing, treatment, and policing of SSI workers and their clientele.
What benefits might accrue to society through the above-described regulation of this hypothetical industry and its market? For openers, no poxy doxy could operate until he/she tested clean. Granted that mandatory periodic testing is not a perfect system, it would unarguably guarantee some reduction in STD infections.
Confining all SSI workers to a single red-light district would make it easier for morally conservative folks, parents and their kids, school busloads of students on field trips, etc. to avoid contact.
SSI workers, operating legally, openly, in the red light district, therefore not fearing the cops, might be more likely to report people who commit crimes against them. Criminals, realizing that SSI workers were no longer soft targets, might tend to lay off. So, all other things being equal, the SSI workers could enjoy safer lives, and the city might enjoy some reduction in the crime rate.
In the above “what-if” discussion I have illustrated ways in which government regulation can serve useful purposes. Before that, I noted types of regulation, which together with the inherent benefits, would be lacking in a truly unregulated, free-market practice of capitalism.
There is actually no market which is not regulated in some way. We’ve lived with the regulations and the free-market hype for so long that we’ve become blind to both.
Capitalism is no myth. Free-market? That’s a myth.
¹ Some professional economists need to revisit rock-bottom basics—if it were really true under any circumstances that all checks on the negative side of human nature were unnecessary, then God needn’t have given Moses the ten commandments.
Once again—unnecessary? Ask any lawyer, cop, detective, psychiatrist, priest, minister, rabbi, mullah, youth counselor, or parent for that matter.
Do you prefer a shortcut? Ask crime victims.