From Marxist to Markets

--“Of all tyrannies,” C.S. Lewis once wrote, “a tyranny sincerely exercised for the good of its victims may be the most oppressive.

“It would be better to live under robber barons than under omnipotent moral busybodies.

“The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”

--There’s a sculpture on display in front of the Federal Trade Commission building in D.C.

It was erected when Roosevelt was in office, depicting a man holding back a wild horse. It is called “Man Controlling Trade.”

It, of course, implies that we need institutional protection from the overwhelmingly wild force of grocery lists and car salesmen.

Man Controlling Trade Sculpture

But, we know what you’re thinking. This metaphor is full of plotholes.

For one: “Since trade is not really a wild horse,” Sheldon Richman points out in Reason, “but rather a peaceful and mutually beneficial activity between people, the Roosevelt administration’s propaganda purpose is clear.

A more honest title would be ‘Government Controlling People.’ But that would have sounded a little authoritarian even in New Deal America, hence the wild horse metaphor.”

The idea that government is necessary to “tame the beast” is not an unpopular one. But, Richmond goes on, “What’s looked over — intentionally or not — is that the alternative to a government-regulated economy is not an unregulated one.

“The term ‘free market’ does not mean free of regulation. It means free of government interference, that is, legal plunder and other official aggressive force.”

Rather than having a centralized decision-maker, individuals can (and should) voluntarily participate and create regulatory environments on their own. These voluntary decisions are what make up and regulate the market — not arbitrary and outdated restrictions and barriers.

And, though a free market will have its bad players, they will be in the minority. The incentive to cheat and defraud, without a centralized power structure, will be lower and far less disastrous. And, better yet, the threat of violence won’t be baked into the cake.

Rather, rules will be created by consent and not by agenda-driven third-parties with goons with guns and big cages.

“Bureaucrats,” Richmond writes, “who necessarily have limited knowledge and perverse incentives, regulate by threat of physical force. In contrast, market forces operate peacefully through millions of cooperating participants, each with intimate knowledge of her own personal circumstances and looking out for her own well-being.”

People, naturally, tend to value order and peace to chaos. And free markets, in the pursuit of self-interest, provide a way for humans to interact, create order and foment peace. But, Richmond goes on, those who forget that “liberty is the mother not the daughter of order, will be tempted to favor state-imposed order. How ironic since the state is the greatest creator of disorder of all.”

Today, to drive this point home, we turn to Mr. Thomas Sowell.

Sowell’s here to rap about his transformation from Marxism to the Markets. And show us why a robber baron is a much safer foe than a meddling bureaucrat… or worse, someone who sincerely believes they’re helping.

Read on…


From Marxist to the Market

By Thomas Sowell

How and why had I changed from a young leftist to someone with my present views, which are essentially in favor of free markets and traditional values?

In a sense, it was not so much a change in underlying philosophy, as in my vision of how human beings operate.

Back in the days when I was a Marxist, my primary concern was that ordinary people deserved better, and that elites were walking all over them.

That is still my primary concern, but the passing decades have taught me that political elites and cultural elites are doing far more damage than the market elites could ever get away with doing.

For one thing, the elites of the marketplace have to compete against one another.

If General Motors doesn’t make the kind of car you want, you can always turn to Ford, Chrysler, Honda, Toyota, and others. But if the Environmental Protection Agency goes off the deep end, there is no alternative agency doing the same thing that you can turn to.

Even when a particular corporation seems to have a monopoly of its product, as the Aluminum Company of America once did, it must compete with substitute products.

If Alcoa had jacked up the price of aluminum to exploit its monopoly position, many things that were made of aluminum would have begun to be made of steel, plastic and numerous other materials.

The net result of market forces was that, half a century after it became a monopoly, Alcoa was charging less for aluminum than it did at the beginning. That was not because the people who ran the company were nice. It was because market competition left them no viable alternative.

How you look at the free market depends on how you look at human beings. If everyone were sweetness and light, socialism would be the way to go.

Within the traditional family, for example, resources are often lavished on children, who don’t earn a dime of their own. It is domestic socialism, and even the most hard-bitten capitalists practice it.

Maybe some day we will discover creatures in some other galaxy who can operate a whole society that way. But the history of human beings shows that a nation with millions of people cannot operate like one big family.

The rhetoric of socialism may be inspiring, but its actual record is dismal.

Countries which for centuries exported food have suddenly found themselves forced to import food to stave off starvation, after agriculture was socialized. This has happened all over the world, among people of every race.

Anyone who saw the contrast between East Berlin and West Berlin, back in the days when half the city was controlled by the Communists, can have no doubts as to which system produces more economic benefits for ordinary people.

Even though the people in both parts of the city were of the same race, culture and history, those living under the Communists were painfully poorer, in addition to having less freedom.

Much the same story could be told in Africa, where Ghana relied on
socialistic programs and the Ivory Coast relied more on the marketplace, after both countries became independent back in the 1960s. Ghana started off with all the advantages.

Its per capita income was double that of the Ivory Coast. But, after a couple of decades under different economic systems, the bottom 20% of people in the Ivory Coast had higher incomes than 60% of the people in Ghana.

Economic inefficiency is by no means the worst aspect of socialistic government. Trying to reduce economic inequality by increasing political inequality, which is essentially what Marxism is all about, has cost the lives of millions of innocent people under Stalin, Mao, Pol Pot, and others.

Politicians cannot be trusted with a monopoly of power over other people’s lives. Thousands of years of history have demonstrated this again and again.

While my desires for a better life for ordinary people have not changed from the days of my youthful Marxism, experience has taught the bitter lesson that the way to get there is the opposite of what I once thought.

[Ed. note: This article originally appeared in Capitalism magazine here.]

Regards,

Thomas Sowell

Chris Campbell

Written By Chris Campbell

Chris Campbell is the Managing editor of Laissez Faire Today. Before joining Agora Financial, he was a researcher and contributor to SilverDoctors.com.