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Thing 1

There is no such thing as a free market

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Chang, H. (2011). Thing 1. In Chang, H. 23 Things They Don't Tell You About Capitalism. Bloomsbury Press, pp. 1-10

The free market doesn't exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How 'free' a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined 'free market' is the first step towards understanding capitalism.

The first two sentences are pretty obvious but the political definition angle is interesting.

at the same time, you have to wonder how much of a strawman this is--perhaps a conservative response to this would be that they're just trying to find the right balance of govt interference, and that liberals are asking for too much

by Ha-Joon Chang 7 years, 2 months ago

The free market doesn't exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them. How 'free' a market is cannot be objectively defined. It is a political definition. The usual claim by free-market economists that they are trying to defend the market from politically motivated interference by the government is false. Government is always involved and those free-marketers are as politically motivated as anyone. Overcoming the myth that there is such a thing as an objectively defined 'free market' is the first step towards understanding capitalism.

The first two sentences are pretty obvious but the political definition angle is interesting.

at the same time, you have to wonder how much of a strawman this is--perhaps a conservative response to this would be that they're just trying to find the right balance of govt interference, and that liberals are asking for too much

by Ha-Joon Chang 7 years, 2 months ago

[...] the free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.

by Ha-Joon Chang 7 years, 2 months ago

[...] the free market is an illusion. If some markets look free, it is only because we so totally accept the regulations that are propping them up that they become invisible.

by Ha-Joon Chang 7 years, 2 months ago

All this does not mean that we need to take a relativist position and fail to criticize anyone because anything goes. We can (and I do) have a view on the acceptability of prevailing labour standards in China (or any other country, for that matter) and try to do something about it, without believing that those who have a different view are wrong in some absolute sense. For though China cannot afford American wages or Swedish working conditions, it certainly can improve the wages and the working conditions of its workers. [...]

on the fact that there is no objective way to define "unacceptably low wages" or "inhumane working conditions", especially because it evolves along with our social mores over time. thus free-market economics can't give us the answer

by Ha-Joon Chang 7 years, 2 months ago

All this does not mean that we need to take a relativist position and fail to criticize anyone because anything goes. We can (and I do) have a view on the acceptability of prevailing labour standards in China (or any other country, for that matter) and try to do something about it, without believing that those who have a different view are wrong in some absolute sense. For though China cannot afford American wages or Swedish working conditions, it certainly can improve the wages and the working conditions of its workers. [...]

on the fact that there is no objective way to define "unacceptably low wages" or "inhumane working conditions", especially because it evolves along with our social mores over time. thus free-market economics can't give us the answer

by Ha-Joon Chang 7 years, 2 months ago

Furthermore, reflecting its political nature, the process of re-drawing the boundaries of the market has sometimes been marked by violent conflicts. The Americans fought a civil war over free trade in slaves (although free trade in goods--or the tariffs issue--was also an important issue). [...]

by Ha-Joon Chang 7 years, 2 months ago

Furthermore, reflecting its political nature, the process of re-drawing the boundaries of the market has sometimes been marked by violent conflicts. The Americans fought a civil war over free trade in slaves (although free trade in goods--or the tariffs issue--was also an important issue). [...]

by Ha-Joon Chang 7 years, 2 months ago