Brutish Markets or Brutish Government?

January/​February 2016 • Policy Report

The morning after Christmas, a Washington Post article referred to “the brute market forces of unbridled capitalism.”

It’s an all‐​too‐​common theme. And it’s particularly annoying because real capitalism — free markets and the rule of law — is the least “brutal” political and economic system imaginable. Indeed, it’s the one system that doesn’t rely on brute force.

In his new biography of Margaret Thatcher, Charles Moore reports that she told Mikhail Gorbachev that communism was “synonymous with getting one’s way by violence.” Ouch. But absolutely true. What’s obviously true of communism, fascism, national socialism, theocracy, military dictatorship, and other authoritarian or totalitarian regimes is also true — though less obviously — in social‐​democratic and mixed economy systems.

Every law that requires people to act in ways they wouldn’t choose requires enforcement, which means the potential of punishment. Consider alcohol or drug prohibition. The government orders citizens not to use a particular substance. If they do, they will be arrested, fined, possibly jailed — or even killed in a SWAT raid or other police encounter. People have been jailed for smuggling — that is, selling to willing customers — tobacco and orchids. Two days after Christmas, in yet another article in the Washington Post, a Harvard professor complained that “we haven’t tried everything [to discourage obesity]. In the United States, we consistently stop short of our most powerful policy instruments: taxes and regulations.” The professor wants to use force to stop people from eating more than he thinks they should.

Marvin and Laura Horne of Kerman, California, didn’t want to give nearly half their raisins to the government created Raisin Administrative Committee. The committee sent trucks to the Hornes’ farm to collect the raisins, but the Hornes refused to let the trucks on their property. They sold their raisins and were fined $680,000. They sued the government. After a decade in court, the Supreme Court ruled in their favor. But suppose they had just sold the raisins and refused to pay the fine. The government would have escalated; it would have confiscated the Hornes’ bank accounts and maybe returned to the farm with armed agents. It would likely, as Thatcher said of communism, have insisted on “getting [its] way by violence.”

Or take the lifeblood of our current government, taxation. Does anyone believe that Americans would hand over so much of their income to the federal government if not for the ultimate threat of imprisonment and violence?

Using violence or the threat of violence to get your way is brute force. It’s the opposite of markets, which are based on consent. In a free market, to get money from someone else you have to offer them something they value. In a fully libertarian society, government would use force only against those who had themselves used force first — to prevent or punish theft, assault, and other crimes.

Part of the problem may be that the Post author thinks that “unbridled capitalism” is what we have in the United States today. In fact, our form of capitalism is rife with privilege and barriers. Wall Street bailouts, taxi cartels, raisin cartels, trade protectionism, high tax rates with complicated loopholes, ethanol mandates, central‐​bank inflation, occupational licensing, corporate subsidies — all these policies tend to redistribute income upward and thus exacerbate inequality. Those are some brutal policies that defenders and critics of capitalism should unite to reform. It may well be that the word “capitalism” is the problem. That word, coined by Karl Marx, implies that the system is run by and for capitalists. I wrote in The Libertarian Mind, “The right term for the advocates of civil society and free markets is arguably socialist.” We support a system that favors society, not the state.

The full sentence in that article was, “Mormonism’s communitarian past and welfare system in the present should rebuke the brute market forces of unbridled capitalism.” But there would be plenty of community, mutual aid, and charity in a free market society (as indeed there is in our mixed‐​economy society).

And of course, even our very imperfect market system of the past 200 years has done more good for the poor and the middle class than any other system in history did or does today. Free‐​ish markets in so‐​called capitalist countries have given us, in the words of Deirdre McCloskey, “a rise in real wages 1800 to the present [of] 2,900 or 9,900 percent.” Markets have brought us from a society characterized by backbreaking labor, bare subsistence, and an average life expectancy of 25 years to today’s truly amazing level of abundance, health, and technology.

Markets have given us longer, healthier, and more comfortable lives. Perhaps even more importantly, free‐​market libertarianism is the only political system that renounces the use and threat of violence. Brute market forces, indeed.

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