I am not slavishly devoted to free markets.
And I am deeply cynical about democracy as it is effected through electoral politics. But to almost everyone “democracy” is electoral democracy — and a “good thing”.
Of course, a goodly fraction of the people who think of “democracy” as a good thing have a particular formulation in mind: The “people” ought to decide how resources are allocated, businesses are run, profits are distributed, etc., etc., etc. The only practical way for such things to be done is for the “people” to elect office-holders who will use the power of government to make such things happen, as they (the office-holders and their unelected bureaucratic minions) prefer them to be done.
So the end result of electoral democracy isn’t democratic at all. The masses of people who are affected by government decisions about their social and economic affairs don’t really have a say in the making of those decisions. They only have a say in the election of office-holders who offer vague and nice-sounding promises about the things that they will accomplish. Those office-holders then turn things over to bureaucrats who have their own, very specific, undemocratic views about what should be accomplished, and how.
Which brings me back to free markets. Free markets are those in which buyers and sellers, through the price mechanism, determine what products and services should be produced, at what prices, and for whom. Every market participant acts voluntarily, and no one is coerced into selling something that he doesn’t want to produce or buying something that he doesn’t want to have. (Government intervention in markets yields exactly that kind of coercion by dictating, in effect, what can and cannot be produced, under what conditions, and by whom. The consumer is therefore coerced into a range of choices, or non-choices, that aren’t the ones he would prefer.)
Free markets, in sum, are democratic, in that their outcomes are determined directly by the participants in those markets.
And so we are left with the paradox that the loudest proponents of “democracy” are responsible for subverting it by their adamant opposition to free markets.
2 thoughts on “Free Markets and Democracy”
I’ve been enjoying your recent critiques about the limits of the market, from a conservative point of view. By coincidence I came across this recent essay by Dr. Ed Feser that makes many similar points. He also says some things about Hayek on socialism and tribalism that I think you touched on in your recent commentary re: Marx and alienation. https://www.claremont.org/crb/article/hayeks-tragic-capitalism. It all seems to be part of an interesting growing dialogue on the topic.
Thanks for the link. I’ll check it out.
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