The American version of “free market” is a big, fat lie! It’s time to denounce it as such!
It must be denounced for two main reasons:
- It is too extreme because many Americans believe that the government has no role in the economy.
- It is totally fake because the American government has always been playing a critical role in the economy throughout American history.
Which country, then, has the best practice of “free market”?
China!
China has a hybrid economy, mixing the planned economy with the free market economy, without being extreme at either, neither in theory nor in practice.
1. What is “free market”?
Below is an excerpt from Wikipedia – free market.
In economics, a free market is an idealized system in which the prices for goods and services are determined by the open market and by consumers. In a free market the laws and forces of supply and demand are free from any intervention by a government, by a price setting monopoly, or by other authority. Proponents of the concept of free market contrast it with a regulated market, in which a government intervenes in supply and demand through various methods — such as tariffs — used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.
2. Where did “free market” come from?
“Free market” can be traced back to Adam Smith.
“Free market” has been most passionately advocated by two empires in sequence: first the British Empire and then the American Empire.
3. “Free market” and empires
“Free market” per se and an empire cannot co-exist for one key reason: an empire requires a strong military force, which, by definition, is not a part of a free-market economy, because it is supported by the government.
In other words, no empire has ever had a “free-market” economy per se. This was true throughout the British Empire (which ended in 1945), and this has been true throughout the American Empire (1945 – present).
The image below highlights 2019 US government discretional spending, illustrating how much the taxpayers are “subsidizing” various industries, especially the military.
4. “Free market” and capitalism
Capitalism is the best thing that ever happened to mankind. Capitalism has not only been feeding more and more people on earth but also created huge prosperity around the globe. For example, it was capitalism (and colonialism) that propelled the West ahead of China some 200 years ago, and it is state capitalism that has enabled China to lift some 800 million people out of poverty over the past four decades, without dropping a single bomb!
Capitalism has many endemic problems, not the least of which are its business cycles and the reckless pursuit of profits by [most] greedy capitalists.
In other words, “free market” (or laissez-faire) capitalism, has never really worked, nor will it ever work. Two grand examples of disasters:
Both caused great misery to society and both required great government interventions. Two examples of government interventions during the Great Depression:
5. “Free market” and socialism
“Free-market” capitalism must be counterbalanced with socialism, which is the government’s job. For example, capitalism creates extraordinary wealth for the able and lucky folks, while socialism provides the less fortunate with a safety net, thus creating and maintaining a “harmonious” society.
6. “Free market” in America
A republic is socialistic by definition, as everything is supposed to be for the “public”. America is no exception. For example, American slavery is one of the worst forms of socialism: socialism supporting capitalism with free labor! For more, read American Political Taxonomy Simplified.
The image below highlights an important perspective.
America has indeed been hugely successful, especially economically. However, here is the cruel truth behind America’s “free-market” economy: throughout American history, there has always been a huge underclass supporting America’s economy, from slaves in the old days to prisoner labor nowadays (Prisoner labor is modern slavery. I’ve been sent to solitary for speaking).
Bottom line: America has never been a “free-market” economy per se throughout its life, not even for a single day!
More profoundly, America was founded by/of/for the rich and remains so today.
For more, read What is America, anyway?
7. “Free market” and China
China has a mixed economy as follows:
- At the macro level, it is a planned economy run by the government.
- At the micro level, it is a “free-market” economy.
For more, read What is China, anyway?
8. Discussion
“Free market” per se has been abused in the West. Two highlights:
- Adam Smith invented it innocently, but it was hugely abused by Britain as a theoretical foundation to expand its Empire via colonialism and imperialism.
- America has simply continued the British tradition, with folks like Milton Friedman blindly advocating it for the American Empire.
With China’s comeback, it is time to re-write [parts of] the history, especially the notion of “free market”.
For more, read History 2.0 – China’s Comeback vs. America’s Decline.
9. Closing
The American version of “free market” is a big, fat lie!
There has never been a true “free market” economy as it is known in the West, especially in America, nor will there ever be.
China, on the other hand, has the best practice of “free market”, which supplements its overall planned economy.
Yeah Frank free market in China? I have been there and seen the fake goods for sale,folks working to sell them seven days a week, and the government could care less. Free market to sell (in some cases) dangerous not very well made junk to whoever wants to buy it. I guess this is China’s idea of a planned economy to give the lower class something to do seven days a week. Yes US is far from perfect but you most always saying China is almost perfect, is stretching the truth a tad.
You may pick-&-choose your examples. Fact: China has lifted 800 million people out of poverty over the past 4 decades, without dropping a single bomb! https://econcurrents.com/2022/05/21/is-america-the-last-big-colonial-power-standing/
While I disagree with many of your posts, I have continued to read them. This one is over the top, denigrating the most successful economy the world have ever seen, and praising China for its success in stealing our ideas. Please delete me from you mailing list.
The Communist Socialist China Free Market, has truly helped China to prosper. One thing you don’t see in 2016 to now, is the Shandytown tube style homes people lived multiple families in , with one shared a bathroom & a 8-10 sq. meter apartments. They are now new multi story 35-45 sq. meter apartments with individual bathrooms per apartment. That’s good. But you’ll never see in traveling China , nice quarter acre lots with separate homes with green lawns and hundreds of homes per Block with separate families living in 2000 square feet plus homes with 4-5 bedrooms & 3 bathrooms per home. The apartments in large multi story buildings is home to Chinese families. It will take a hundred years to build what the USA landscape looks like at night from outer space. Guess what , it is No lie that a Free Market , was the result of why the USA is lighted from the East Coast, North to South.. all the way to the West Coast, from the outer Space Station looking at Earth the USA is lighted up. You don’t see that in China. That shows past progress already built , from a Free Economy.
> it is No lie that a Free Market , was the result of why the USA is lighted from the East Coast, North to South..
It’s a country built on stolen land!!!