Free Markets

The Economist magazine asked in a recent issue: "Why on earth can’t the world’s richest country ensure that Baghdad has water and electricity?" One might think that a publication dedicated to covering the world of markets would already know the answer. The US government is trying to solve economic problems in Iraq, including the provision of essentials like utilities, through military means. If guns and force could provide the essentials of life, the Soviet Union would have been a utopia.

It is not a short step from poverty to prosperity, and the transition itself has long been exploited by opponents of the market economy.

A growing recognition of the superiority of markets over planning has created an unviable hybrid: the planned market, one created not by property owners by the state and for the state.

The fundamental issue in banking and monetary policy, writes Guido Hülsmann, is whether government can improve the monetary institutions of the unhampered market. All government intervention in this field boils down to schemes that increase the quantity of money beyond what it otherwise would be. Such schemes confer no social benefit but rather only serve redistributive purposes.

Wilfred Beckerman is an outstanding economist of a type probably more common in Britain than America. Like Anthony de Jasay, Amartya Sen, and I.M.D. Little, Beckerman is thoroughly at home in philosophy;

Complete privatization will not lead to ideal results, but it will unravel most of the anticompetitive practices that exist in the cable industry. The lesson that we should draw from the results of the Telecommunications Act of 1996 is that efforts to partially privatize the industry are likely to retain those elements of regulations that benefit concentrated interests in business most.

Since 9-11, many commentators have asked question: can the West can really ever be at peace with Islam? If the cooperative spirit of the market economy prevails, the answer is yes. An example is Malaysia, which defies the stereotype. It shows what peace is possible when governments permit market exchange and freedom of cultural contact, while avoiding imperial overreach and belligerence.

The critics of free trade persist in their insistence that permitting individuals in this country the freedom to invest where they please undermines the effectiveness of the U.S. economy and ultimately leads to a lower standard of living. The implication: Americans are better off only if everyone else in the world is poor. This flies in the face of sound economics.

The historical record shows that commercial freedom is the best policy in peace and war. Cooperation is more fruitful than coercion. And if one wants the friendship or assistance of others it is better to appeal to their interests instead of their fears.  Above all, foreign trade should be as free and unrestricted as trade within a nation.