The Sovereign Mind

Free thought on politics and real life

Posts Tagged ‘capitalism

Freedom vs. Fairness

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I am a free market supporter. Capitalism is the economic system on which the United States is built, and it is the key to our relative economic success. It’s genius is that it relies on the natural human characteristics of greed and fear to stimulate economic growth. Without greed and fear, there would be no invention, innovation, and no motivation to work hard. Nothing is more motivating and empowering to the individual that knowing that he is responsible for his own success or failure. Yes, the free market is the most successful economic system the world has ever known, and it can be credited for the relatively high quality of life that many of us enjoy.

But the point of this post is not to praise the free market. The point of this post can be summarized in one word: “but”.

There is a difference between saying that the free market is the best economic system we have found, and saying that it is perfect. It is most certainly not perfect. But the difference between “best” and “perfect” is lost to many free market ideologues. To some, any attempt to restrict the freedom of the market is always wrong, whatever the justification. They have confused the free market as the goal, rather than a means to the real goal: economic prosperity and fairness. They fail to recognize that even if the free market is a beautiful rose, it still has its thorns.

The fundamental problem with the free market is this: it isn’t fair. Some might scoff at this assertion, since the whole intent of the free market is fairness. What could be more fair then to allow individuals to make their own choices and reap the consequences of their efforts and choices? I agree that the free market is fair in general, and therefore it is a great groundwork for a fair economic system. In general, hard work and good choices are rewarded and laziness and foolishness are penalized. But, it is not fair in every individual circumstance. Certainly there are people who work hard who come across misfortune, and there are those who are rich despite their foolishness. They might be the exception rather than the rule, but why should we not try to improve the fairness of the system if we can? Just for the sake of the purity of the free market? The common phrase “life isn’t fair” doesn’t imply that fairness is not a worthy ideal.

There are two reasons why the free market fails the fairness test:

  1. There are some things that happen to us that are not the knowable result of something we have done. For example, if someone gets a non-preventable disease, the sick person would be punished by a pure free-market healthcare system, whether the sickness was his fault of not.
  2. We do not exist as individuals. Our choices affect other people, which means that others must deal with the consequences of our decisions, which is fundamentally unfair. Our children are especially affected by our choices. Clearly, it would not be fair for a child born into a poor family not to have access to the same educational resources as a rich child.

Again, some will argue that these are just facts of life, and trying to solve those problems is like trying to turn back the waves of the ocean. I agree that they are not solvable, but we can do things to mitigate their effects. It’s true that in mitigating them we would mute some of the positive effects of the free market. The key is to be sure that the whatever restrictions are placed on the free market are done with a full understanding of both the benefits, as well as the consequences of a weakened free market. To do that, we need to understand both why the free market works, and why it doesn’t. Ideologues on both sides are destined to be wrong.

The purpose of this post is to lay the fundamental groundwork. Several future posts will explore specific issues where this balance is at the core.


Written by Mike

October 11, 2008 at 9:12 pm

Posted in politics

Tagged with , ,