Sheldon Richman on what Free Market Defenders Get Wrong
Subsidies, stimulus, regulations, protectionism, trade restrictions, government-bank collusion, zoning, bailouts and more do not equal a "free" market, Sheldon Richman writes. What we have—and have had for a long time—is corporatism, an interventionist system shot through with government-granted privileges mostly for the well-connected–who tend to be rich businesspeople. Even some who have prospered apparently by market means have actually done so through government intervention, such as transportation subsidies and eminent domain. Wealth can be transferred in many ways besides welfare and Medicaid, some of them quite subtle. Most transfers are upward.
Free-market economists know this, but they often seem to forget it, such as when they indiscriminately defend firms (such as oil and pharmaceutical companies) in today's corporatist economy. These economists convey the message that since in a free market people get rich and companies get big only by serving consumers, anyone who is rich today and any company that is big today must have gotten that way by serving consumers. By claiming the contemporary market is free, we alienate potential allies who are concerned about those who are having a tough time of things.