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May 14, 2008

Do Republicans Believe In Free Markets?

-- by Dave Johnson

This post originally appeared at Speak Out California

A news story on Monday, McCain urges free-market principles to reduce global warming. Which"free-market principles" does McCain mean?

McCain's major solution is to implement a cap-and-trade program on carbon-fuel emissions, like a similar program in the Clean Air Act that was used to reduce sulfur dioxide emissions that triggered acid rain.
Summary: the government sets a limit on how much CO2 companies will be allowed to emit. The government sets a fee for any emissions above that level. The government allows companies with emissions below that limit to sell "credits" to companies above the limit.

McCain describes this as a "free market" approach.

Conservatives always come up with nice-sounding ways to describe their ideas. They talk about "free markets." "Free" sounds so good. Has a nice ring to it. But is there really such a thing?

In McCain's example every single component of this market is defined, set up and regulated by government. But conservatives always say that government is the enemy of freedom and of markets. Do they not see the contradiction?

In fact, is there a market that is not defined, set up and regulated by government? Would markets even exist if there were no government? First, there is the money that is exchanged in a market. Unless we revert to a pure barter system where goods are exchanged money is entirely a creation of government. And it is entirely regulated by government. Next are the laws that, excuse the word, "govern" the market system. These laws are entirely a creation of government and it is government that enforces them and government that runs the courts that resolve disputes. And yes, these laws are "regulations."

So when conservatives complain about "government" and "regulation" and advocate "free markets" what is it they are really saying? The best way to understand what they want is to look at what they do, not what they say. If we look closely at the results of those times when conservatives gain power we can see that they really seem to mean they will use the power of government to protect the wealthiest people and biggest corporations.

For example, conservatives in government have always defended the big energy companies against threats to use of their products. They oppose mass transit, alternative energy research, even requiring cars to get better gas mileage.

A closer look reveals that what they really stand for is a protection of the status quo, defending the rich and powerful against the rest of us.

Click through to Speak Out California

Posted by Dave Johnson at May 14, 2008 9:34 AM

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Comments

You're right about the Republicans and the Democrats. They don't believe in free markets. People who really believe in free markets (like me) are understandably depressed by this.

BTW - the the answer to this question

Would markets even exist if there were no government?

Is YES. Markets exist even when there is no government. People always trade no matter what situation they are in.

There are many forms of money that governments don't control. The most famous is gold. In prisons - cigarettes are often used. Government is completely unnecessary for markets to function.

Posted by: Jay Muntz [TypeKey Profile Page] at May 14, 2008 7:15 PM

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