Time To Talk Economy and Government Part 1 - The Market

Note: This is going to be a hell of a read. I started going one direction, and I ended up going somewhere totally different that I was eventually going to get to with another blog. So I made it in two parts, and it's long-winded, but in the beginning I'm laying the foundation for what comes later.

Lately it seems like there are only 2 ways to do business. Either you are a capitalist or you are a socialist. I think I've already covered that to an extent, we are already a hybrid system that is neither truly capitalist or socialist. Our economy, right now, is healthy enough to support that system, so we can debate the merits of it but as long as we live in a society of abundance, it's really not going to matter. We can afford to completely support some of the population. It's not going to be the downfall of our economy or our sovereignty, probably even without long-term ill effects. I just want to put that out there. I don't agree with that or think it's the best or right thing to do, but I am not a person who thinks there is only one possible solution for every problem. I am not a "if it's not black, it's white" person. Rarely is there more than one best solution, but often more than one way could work.

Here's the best solution. I love a free market. I love the thing that comes naturally, I love the path of least resistance. People have been using a free market forever. Even nature uses a free market. You don't have to establish capitalism, you don't have to establish a free market. It already exists, you'd have to destroy it just to change it. Supply exists, demand exists, your market is ready made. Also, a free market will solve its own problems. If you sell a product, and your prices are too high, your competitors will eat you alive. You will have to bring your prices down to the place where they should be, and as long as your product is quality and you have some business sense, you should have a healthy business. But the market forces the right thing to happen. If somebody is not successful, they are either not selling enough or they are spending too much, or both. The market will put you out of business for doing business poorly, just as it will reward you for doing business well.

There's a problem, though. The market isn't perfect. The market can't defend itself from outside forces. It can't defend itself from regulation. You can't tax dry-clean businesses in one county more than another, or you will put the dry cleaners in the other county out of business. You can't subsidize a preferred industry and let another industry flounder. The market will try to fix those problems, but since those problems were never the market's to begin with, it will spiral out of control.

We subsidize farming in the United States. There are too many farms and farmers in our country. It's been that way for a while. Supply is high, so demand is low. The prices have to be low. Well, the farmers aren't making enough money because the prices are low. So they farm more. It sounds idiotic, but I don't know that I can blame them, it's their job and they've got to eat somehow, and that's all they know to do. The result is that supply is even higher, demand is the same. They are making the same amount of money doing even more work, because the market only has so much money for what they do, and regardless of how much they produce, that number can not change. That number is demand and it is set in stone. In a real market, some farmers would just have to find other jobs. It sucks, but sometimes life sucks. But we subsidize them. We take tax money, and we pay the farmers more than the value of their work. This hurts our pockets by paying excess taxes for our food, but it also keeps food prices extremely low, and it screws up the world markets, who can't compete with American farmers' artificially low prices. The market can't fix a problem when there are forces actively working against it. Also, it's not fair to pay somebody for nothing if you aren't going to pay everybody for nothing. It's not my fault the market isn't there for their goods. Plenty of people get laid off when the market changes. They find new jobs. It's not my fault the farmers can't find a way to live on less money, because there are plenty of people in Africa that would love to pay our farmers their going rate for our grain. But our farmers can't live inside the market like everybody else, so they leech off of the rest of us. Like I said before, we can afford to pay them, our society is more than abundant, but it's not right, and I can think of better things to do with my money than pay too much for our food. On top of that, by subsidizing our farms, we are also subsidizing the food cost of anybody in a foreign country that buys from those farms.

This is just one example of why socialism doesn't hold a candle to a free market, and why you should have the balls to pick one or the other. It's not fair to bail farmers out, or carmakers, or lenders, but then you don't bail out everybody else going through a tough time. We could be socialists, it would probably even work for 100 years or so. But we're not. We could have a free market without government intervention. But we don't. We've got something in the middle that helps some people and doesn't help other people. And that's not fair. It's not right. At least socialists are fair for a little while.

Next I'm going to delve into the necessary evils of regulation.