HOW FREE- MARKET IS OUR ECONOMY? (…much depends on what …free…means)

All our career politicos, solemn pundits and experts of one kind or another, not to mention our media hordes, keep spouting the same shopworn shibboleth about how America owes its pre-eminent economic position in the world because it is the epitome of a free-market economy.

How free-market is our economy? Much depends on what ….free…means.

Our old economics professor at Georgetown once defined it for us with this bit of racy doggerel verse:

Jack and Jill Went up the hill… They each had a dollar and a quarter. When they came down, Jill had two-fifty. That’s the free-market working…. Just like it oughter…

In today’s America, however, such a “free” quid quo pro transaction is no longer allowable or possible because of all the regulatory restrictions which now exist. To be more precise about it ours may be a market economy…but there’s nothing “free” about it.

How and where you can set up and locate an enterprise to produce something; how you may or may not raise capital for your enterprise to produce something; who and how you can hire or fire someone for your enterprise to produce something; how you must compensate your labor to produce something; how and in what way you can sell what you produce; how you can distribute and market what you produce; where and to whom you can export what you produce; all of these things, and more, are all regulated. Non-compliance is not an option…and futile…because of if the regulators don’t come at you, a swarm of single-issue “advocates” of one kind or another will holler and scream for your blood…if not your head.

Here are some other examples of how “unfree” our market really is. Take – Unemployment Insurance – Theoretically, it is an “insurance” policy paid for by employers, in the event business conditions and/or circumstances require them letting go any of their workers. A fair and decent enough idea, but the question is…if it’s an “insurance” policy why are both State and Federal bureaucracies involved with administrating it?

The States regulate how and in what way anyone can receive compensation from such policies, and now, Congress is involved with deciding how long such a policy should run. How is that part of a free-market economy?

Then, of course, there is the matter of “minimum” wage. How minimum should it be, and who should decide that? Employers have little or no say in the matter anymore. Local communities, States, and the Federal government, are all enacting laws and regulations to determine that, regardless of the relative value of workers’ tasks to the overall functioning of a business or enterprise. Here again, the market is not “free” to decide that. Even those employers and businesses which have the canny self-interest to offer exceptional wage and benefit packages of one kind or another, including any kind of profit sharing arrangements, are restricted by the tax codes on how and in what way they can do so.

In short, almost everything related to our economic structure and how it can operate is directed and regulated in some way or another. For all practical purposes, ours is a government managed market economy…not a free-market one. In that sense it is an unbalanced system where the natural dynamic factors which might otherwise reach some sort of equilibrium are actually manipulated to suit whatever policy du jour is desired.

While we proudly hoot and holler about our equality of opportunity, and our promotion of bootstrap entrepreneurship, we really do everything possible to keep it within a very narrow range of so-called “free” enterprise. The moment it shows any signs of expanding beyond that level, we do our best to keep it down.

Such is America today.

CENTURION