Liberty Not License Part III

Jun 22, 2012 by

When one examines exactly where it is that Liberty exists, it seems only natural to think of Liberty in terms of politics.  However, the range of liberty is much more broad that mere political liberty.  Now, let us look at Liberty in economics, for instance.  I would like to begin this examination by distancing my ideas from our current economic system.  When I speak of Capitalism or Free Market Economics, know that I do not mean our current economic system.  Our current economic system revolves around two principles.  There is a limited amount of pie and there is a need to regulate who gets how much of the pie.  I call this Corporate Mercantilism.  Mercantilism is the idea that there is only so much wealth in the world.  Thus, the main goal of anyone is to acquire as much wealth as possible.  Take a pie.  I decide I want some pie and my good friend Adam decided he wants some too.  The fair thing would be to split the pie in half.  However, my goal is to take as much of the pie as I can.  Thus, fairness goes out the window, I punch Adam and take the pie for myself.  However, Adam can do the same thing to me.  Thus, we form regulations over who gets how much of the pie so as to keep violence from escalating.  This is what is Mercantilism.  The goal is to gain as much wealth as possible through any means possible without it escalating to violence or illegitimate means.  Mercantilism took place around the 1600′s and early 1700′s between nations.  However, today this occurs in the same way.  Corporations are trying to amass as much wealth as they can, lobbying for regulations to try and keep others from gaining more of the pie through ways they see as illegitimate.  This is what I call Corporate Mercantilism, where corporations try and gain as much of the pie as possible.

Now, this theory seems to be wrong on the basis that we can keep making pies.  Wealth is based on production, production on labor, and labor is continual.  Thus, wealth renews itself and the goal becomes to create the most amount of pies possible, not take as much of them.  The idea becomes increasing the total amount, not the personal amount.  Because, seventy percent of one pie is less than ten percent of ten pies.  All efforts go into expanding the market, not into increasing personal wealth.  This creates a fluidity of capital.

However, with this distance, let me also point out that a need for many regulations goes away.  You see, the thing that drives a Capitalistic Economy is demand.  An object’s value is only as much as a person holds it to.  The best example of this is gold.  Gold, in and of itself, has no value.  It looks pretty, but does little more.  If all the gold disappeared off of the face of the earth, no item would be lacking beyond gold itself.  There is nothing that we use gold for that gold is a necessity for.  Thus, the value comes not from its use, but the value we see it to have.  This is demand.  Gold, in essence, is a large, long lasting, and secure bubble.  It may have lasted this long, but it is a bubble none the less because it has no real use.  Demand is what keeps its prices high.

Now, in a Free Market Economy, there are no regulations by the government.  However, this does not mean employers do as they please.  Many people claim that if the minimum wage was taken away, employers would pay their employees nothing.  However, this is a circular effect.  First, if you pay your employees nothing, they will not stay employees long, and you lose the good, efficient employees.  This means a bad product and no one buys the product.  Also, if you pay your employees nothing, it might be the case that your customers do not appreciate that.  This could form a boycott.  Many people resent the idea of boycotts, but they are the way people voice distaste for a practice by a business.

In essence, the business fails in both scenarios because the customer drives the market in a different direction.  This is what is Economic Liberty.  We have the liberty in our market to choose the direction of our market.  A capitalistic market is driven by demand.  Because, without demand, a product is worthless.  Thus, when you purchase something, you are directing the market.  Some people may claim that this is not liberty due to the inequality of wealth.  However, this is a system to give those people who understand the market best more of a voice.  Now, with this liberty does come a responsibility.

First, you have a responsibility to keep informed on the market.  You avoid purchasing from companies who are forming a monopoly, you avoid stores that mistreat their workers.  You buy from good businesses.  This leads to the second responsibility, researching the product.  You see, people complain that products are not well made any more.  This is not merely because companies are conspiring against the average person, but because people do not research the longevity of a car before buying it.  They only look at price, style, and (sometimes) safety rating.  People complain about how the market is, yet they are not willing to do the research or buy the products necessary to create a better market.  In economic liberty, like all other kinds of liberty, if you fail to keep up your responsibilities, other people will fulfill them for you.  When other people fulfill your responsibilities, they gain your liberty.  Thus, if you want economic liberty, you, not the government, have to go out and research what you are buying, set your own standards for businesses, and voice your opinion.  If you do not, you are doomed to the fate of having someone else control your personal economy.

Related Posts

Share This

1 Comment

  1. Vince Giglio

    Is there a difference between what is fair and just? In the world of economics is it efficiency that rules the day or the accumulation and or distribution of wealth? Which is fair and which is just? Fairness dictates the equal distribution of wealth (average for all), while what is just depends on the efficiency and productivity of individual effort and the resulting wealth is earned.

Leave a Comment

You must be logged in to post a comment.

This site is protected by Comment SPAM Wiper.