Written by Frank Li
“Free market” is a good idea, but the American version is a big lie, because it’s so extreme and so fake!
- It’s extreme, because many Americans believe that the government has no role in the economy.
- It’s fake, because the American government has always played a critical role in the economy.
Please share this article – Go to very top of page, right hand side, for social media buttons.
Which country, then, has the best practice of “free market”?
China!
China has a hybrid economy, mixing the planned economy with the free market economy, without being extreme at either, neither in theory nor in practice!
1. What is “free market”?
Below is an excerpt from Wikipedia – free market.
In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and by consumers. In a free market the laws and forces of supply and demand are free from any intervention by a government, by a price setting monopoly, or by other authority. Proponents of the concept of free market contrast it with a regulated market, in which a government intervenes in supply and demand through various methods – such as tariffs – used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.
2. Where did “free market” come from?
“Free market” can be traced back to Adam Smith.
“Free market” has been most passionately advocated by two empires in sequence: first the British Empire and then the American Empire.
3. “Free market” and empires
“Free market” per se and an empire cannot co-exist for one key reason: an empire requires a strong military force, which, by definition, is not a part of a free market economy, because it is supported by the government.
In other words, no empire has ever had a “free market” economy per se. This was true throughout the British Empire (which ended in 1945), and this has been true throughout the American Empire (1945 – present).
The image below highlights 2019 US government discretionary spending, illustrating how much the taxpayers are “subsidizing” various industries, especially the military.
4. “Free market” and capitalism
Capitalism is the best thing ever happened to mankind. Capitalism has not only been feeding more and more people on earth, but also created unprecedented prosperity around the globe. For example, it was capitalism that propelled the West ahead of China some 200 years ago, and it is state capitalism that has enabled China to lift some 800 million people out of abject poverty over the past four decades, with a burgeoning middle class.
Capitalism has many endemic problems, not the least of which are its business cycles and the reckless pursuit of profits by [most] greedy capitalists.
In other words, “free market” capitalism, or laissez faire capitalism, has never really worked, nor will it ever work! Two grand examples of disasters:
Both caused great misery to the society and both required great government interventions. Two examples of government interventions during the Great Depression:
5. “Free market” and socialism
“Free market” capitalism must be counter-balanced with socialism, which is the job of a government! For example, capitalism creates extra-ordinary wealth for the able and lucky folks, while socialism provides the less fortunate with a safety net, thus creating and maintaining a “harmonious” society.
6. “Free market” and America
The image below highlights an important perspective.
America has indeed been hugely successful, especially economically. However, here is the cruel truth behind America’s “free market” economy: throughout American history, there has always been a huge underclass supporting America’s economy, from slaves in the old days to prisoner labor (Prisoner labor is modern slavery. I’ve been sent to solitary for speaking) and millions of undocumented migrants doing the “essential work” nowadays (‘We’re Ignored Completely.’ Amid the Pandemic, Undocumented Immigrants Are Essential But Exposed).
Bottom line: America was founded by/of/for the rich, and remains so today, without a real government that works for all: rich and poor, white and black. In other words, America is practically governance-less!
7. “Free market” and China
China has a mixed economy as follows:
- At the macro level, it’s a planned economy run by the government.
- At the micro level, it’s a “free market” economy.
Let’s look at China via one example: towards cashlessness … China is quickly becoming a cashless society, with e-payment by iPhone everywhere, from super-markets, to street-side mom-&-pop shops, and even to the homeless …
Watch the video below.
.
Two profound questions:
- In addition to the technological infrastructures behind China’s almost cashless society, what kind of social structure is there? Tip: think in such terms as law-&-order, inequality, and even moral standards.
- Is this ever possible in the U.S.?
Watch this video highlighting China’s phenomenal growth over the past few decades.
.
For more on China, read:
8. Discussion
“Free market” per se has been abused in the West! Two highlights:
- Adam Smith invented it innocently, but it was hugely abused by the British to expand their Empire via colonialism and imperialism.
- America has simply continued the British tradition, with folks like Milton Friedman blindly advocating it for the American Empire. For more, read: Milton Friedman: A Man of the Past?
With China’s comeback, it’s time to re-write [parts of] the history, especially the notion of “free market”! For more, read: History 2.0 (Version 2).
America, reform our failing political system, as I have suggested (American Democracy – Why is it failing & how to fix it?), or become a fiddle, second to China!
9. Closing
The American version of “free market” is a big lie! There has never been a true “free market” economy in the West, especially America, nor will there ever be!
China, on the other hand, has the best practice of “free market”, which supplements its overall planned economy.
Now, please sit back and enjoy the long video below.
.
| Page Code: $divide1 = “410”; echo $divide1; ?> | Count: $headline = “”; include “/home4/aleta/public_html/pages/contributors/frank_count.php”; echo $headline; ?> |
