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The Truth About Laissez-Faire

Updated on April 5, 2012

Right now in our crazy country, we have what is often referred to as a Pseudo-Free Market Economy - which basically means that our economy works through heavy Regulations, as well as political and public pressure, though mostly through regulations. There isn't a single thing you can do in this country without checking in with some figure-head or getting one form of permit. Why? Because if it isn't illegal, then it's economic, and if it's economic, the government(s) can regulate and they do. If it's something they don't yet regulate, you can bet that they will soon!

"Laisse Faire is true classical liberalism (now a days we call this "libertarianism") and is true capitalism. It bothers me that so many blame capitalism for our current economic problems, when truthfully, we don't have capitalism in America. What we have is regulated-capitalism, which is basically just government-run monopolies wrapped up in a pretty bow sitting next to a false flag."

“The Sage says: ‘I take no action, yet the people transform themselves, I favor quiescence and the people right themselves, I take no action and the people enrich themselves…’”

Recent economic trends...

Now, that being known, there are many in our country (myself included), who feel that all this regulation actually hurts our economy even more. Heck, there are only two reasons we have all these regulations in the first place:

  1. Because people are easily scared, and the government takes advantage of that by suggesting that an unregulated market would wreak havoc and leave us in some sort of barren waste land of corporate-ocracy and devastation, which people believe, and so the many of the votes are for regulating the market.
  2. It's easier to globalize a regulated market, which is why the government started spreading their propaganda and creating a psuedo-need for regulations - the end goal is and always has been globalization.

If you're one of the many who feel that we need to end our regulated-market, then you probably also feel that we could benefit from some form of Laissez Faire (french for "let it be") or what we think of as a "Free Market". Now, if you're on the same page with me, then you've either come to this conclusion through intense research, self-discovery and investigation - or you've been following recent trends that have shown more and more voters considering and supporting the idea of a totally free market. Ron Paul - follow Ayn Rands philosophies, has been a big part of ushering back this neo-traditional idea for the last 6 to 8 years, and it's starting to gain in popularity as we see our "free" country start to crumble around the edges. Even if you're here at this hub because you're not yet sure what kind of economy you would prefer to support more, it is my intention to help straighten some things out through this hub, so that those gaining this knowledge can make an informed decision about whether or not our country should re-consider a completely Free-Market.

Laissez-faire et laissez-passer, le monde va de lui même!

loosely translated, this means:

“Let it be and let goods pass; the world goes by itself.” ~Vincent de Gournay

A little history...

Now, for those of you whom are unfamiliar, Laissez Faire is actually a very old term and old form of economic philosophy. Basically, it's a completely Unregulated market (which is what they mean by "free") and there are no main governing bodies that control anything that comes in, goes out, stays in, fails or succeeds. The deciding factor of products, services, businesses, money and other economic tools - is based almost completely upon Consumer Interaction.

I can't say, through all of my time researching this subject (several years at least), that I have ever come across an economy in any country that has successfully even attempted to have a completely free market. The closest countries to attempt this have been China (between the Han & Ming Dynasties), where the oldest root forms of Laissez Faire have been traces, and France, where they originally coined the term "laissez nous fair", when the french minister of the 1680's pleaded with a random merchant for an answer to their economic troubles. He wanted to know how to improve industry, and the merchant advised him to, "Let it be" - interesting advice eh?

As time went on, Europe attempted to have it's own form of laissez faire, but failed because the kings law and certain stock laws could always take precedent over the rules and regulation of commodities. Later on, whence America was nearly established, our founding fathers fought for months - mostly over this very subject.

"To allow people to rule themselves is absurd!" many said. "To bind up the people under rules regulated by one small body of men, is the real atrocity!" yelled others. Back and forth it went until the constitution, bill of rights and federalist papers were all laid out on the table. In the end, an agreement was made that the government should have some control over the economy, law of the land and general welfare of the people, otherwise it would be all to easy for any small group of persons to sway the greater voters and create monopolies of their own, without being held accountable for any negative actions. From this, came our Republican-Democracy, where the influence of the majority has driven the will of the few (in our government), but the few were still in ultimate control of the many. This theme was supposed to help keep all things in balance, preventing the eventual suicide that all democracies have suffered, while avoiding the totalitarian rule that every republican body has become.

I would rather roam and idle about in a muddy ditch, at my own amusement, than to be put under the restraints that the ruler would impose. I would never take any official service, and thereby I will [be free] to satisfy my own purposes.” Chuang Tzu (369-286 B.C.)

The Benefits

No Government Regulation of Our Economy Would Mean:

  • The “Harmony of Interests" would take over as the metaphorical regulation of our economy. What this means, is that it would be the artists, entrepreneurs, property owners and philanthropists who would be the greatest influence over commodities, goods, monetary values and self-regulation of businesses. This may not be a perfect system, but it is certainly better than letting governmental thugs do it.
  • More money/monetary funds in your pocket - whether you own a business, work for a business or purchase from a business. With the government taking next to nothing (for basic governmental functions), we would get to keep more of our money and prices of various commodities would be more stable because there would be less influence from stock offices and government run monopolies lead by lobbyist.
  • Inspirational Improvisation - If you couldn't pay with cash, you could always pay with bananas, or apples or ipods - or anything else that held value with the person holding the commodity you seek. Basically, barter and open trading of goods would become very prevalent again, which would be very positive thing because it would cut out the middle men and create less invisible debt.
  • Home of the free... We've always said it, but we've never really had it. Heck, even if we had a completely unregulated market, we'd still be subject to various criminal laws and regulations on our behavior, though the benefit of a lack of government interference in our economic lives, would mean more physical, emotional, spiritual, monetary and intellectual freedoms.
  • No more economically driven wars. Clearly I cannot say there would never be anymore more wars. There's always the chance that foreign enterprise deciding they like our land better than their own, or other super nations that wouldn't like us detaching ourselves from their grips (cough**cough**Britain... did I say that?), but there would be no reason for us to take part in wars like the ones we are currently entrenched in and less 'extra' money for our government to use to go into those worse. Besides, why would we need Libya's gold or Iraq's oil when we could grow hemp, produce endless methods of sustainable energy and barter for our resources?
  • It is highly like that the Department of Education would also be abolished due to it's heavy economic tones and corruption. This would mean that parents, local authorities, teachers and family members would be the ones responsible for overseeing the ways their children's schools develop.
  • Individual Welfare - Currently, we are a power focused country. Who has economic power, who has legal power, who has medical power, who is rendered powerless. These are the things our government focuses on. By taking away government power to regulate the economy, we become a welfare based system (and no, I'm not talking about socialistic systems of food stamps and dshs funds. Not that those are bad, that's just not what I'm talking about). By becoming a truly welfare based society, we would determine our laws based on what is necessary for the good of the individual, which would domino out and become the good of the whole. The phrase "what's good for the goose is good for the gander" comes to mind. Currently, we run on a system where it is believe that if it's good for the gander, then the goose needs to suffer with it even if it's not good for the goose.
  • Do-Over - In my humble opinion, lassie faire isn't the end-all solution, but it is a chance to start over, no matter how many times we need to do so. Getting back to the basics, and scratching on a fresh drawing board, is the only way we are going to be able to free ourselves of more than half of the current governmental and economic destruction that is currently infection our lives. Granted, I do feel that people can generally regulate themselves, we might eventually decide that some governmental regulations would hold more benefits then contras, such as having state governments facilitate the maintenance of roads into busy business areas.

Fundamental Flaws - The Problems That Still Need Solving...

  • Fraud and other economic crimes would need to be regulated through the legal system without regulating the economy.
  • The FDA would no longer have any true power over what comes into or leaves from our markets. Granted, this would not be a bad thing in the end, because of all the current government-sponsored corruption of the agency, but what it means is that we would need to create localized organizations with the common interest of seeking out and reviewing anything currently on the market. They still could not have any power over the economy, but they would have high influence, which was all the FDA was originally intended to do, give people the straight information about products, toxicity, benefits, etc... Not to decide who should be able to sell their wares and who shouldn't.
  • Property Ownership - is an area of laissez faire that has never fully been defined. It's often a topic left to the various factions of statist and anarchists, who all have bold opinions and notions of what property ownership is or should be, but none of whom understand the value of compromise that preserves freedoms of others and enables healthy forms of growth. This is definitely a problem, and one that needs to be worked out before laissez faire really could have a chance.
  • If at some point, any group in particular did happen to create a monopoly that couldn't be balanced out by competition or moderated by consumerism, we might want to consider having some form of agency that could be responsible for ensuring that they couldn't take it a step further and start to influence criminal laws and other essential functions that need to be overseen by unbiased authorities. The only problem is, how do we do this without taking away freedoms and without regulating the economy?
  • Many feel that a Free Market economy can only function correctly if all persons involved make their decisions from an emotionally-detached, logical and rational position. Clearly, this isn't going to happen 100% of the time. In fact, most people make their decisions from an emotional position of one sort or another, which means that 90% of or decision making processes are not going to be 'rational' to everyone, even if they might be logical decisions for us individually. So where do we find the balance?

My grandmother always told me, "There are two things you can never avoid - that's change and change." ~Lyfe Jennings

What Would Not Happen

  • Corporate Take Overs - This is probably the biggest rebuttal I've seen thrown out against laissez faire systems. It is believed (mostly from the democratic side of the table) that if we no longer had federally regulated markets, that corporations and greedy ceo's would take over the country. Now, while companies who managed to come out on top, would probably hold a lot of public interest, there would really be no way for them to control much of anything other then their own operations. Sometimes there might be some companies that appear to build monopolies, but the mystique of free markets is that they focus on changeability, something that is inevitable, but which regulated markets try to avoid. The free market embraces change and if at any point consumers felt that a corporation had taken over or monopolized the system, the negative reviews passed there way would create the downfall of those corps. Not to mention, the only reason corporations have the current power they do, is because our market is regulated to allow them to have that power. Take away the regulations and they are just as susceptable to competition and human whims as any other business.
  • Criminals running wild through the streets. This would happen no more often than it does already. Just because the economic market would be deregulated, does not mean our criminal system would disappear. Sure, we would have less people in jail and our police forces wouldn't be able to work towards financial "quota's" anymore, nor would we have as many new fancy prison systems (which are economic enterprises), but we would still have a judicial system that works to keep people honest (or as honest as possible). Plenty of changes would need to be made, many of which would be changes from nationalized laws to localized laws, but we certainly would not fall into a hellish anarchy like many "experts" would have you believe.
  • People and business would pillage and pollute everything. Although pollution and protection of resources (like forests) are currently protected under economic laws, there is absolutely no reason they cannot be locally regulated, cared for by public organizations or protected under the judicial system in ways other than through economic value.
  • People would get ripped off left and right. First, people already get ripped off all the time, more so through many of the current regulations we have now. And yes, people would be somewhat freer to take advantage of others, but the economy would also be more dependent on consumers than ever before, which means that any hint of bad reviews or rip offs, would cinch off any swindlers attempts at continuing their scamming.
  • The Wages laws would fall apart. Yes, the truth is, our current wage laws would not work in a laissez faire. Though businesses would also be much more able to afford to pay their employees well when they have less taxes to pay and more room to expand or try new things. Yes, there would be some scum out there hell-bent of getting people to work for as cheap as possible so they can make the most profits, but can you see them lasting all that long in an economy run by consumers? (each worker is a consumer, and their influence counts too!)
  • Child labor would start up again. First, did you know that the working child is actually a normal thing in every country except America? Not that I am suggesting we should put all of our kids to work, but what I am suggesting, is that it's not necessarily a bad thing for older children to be able to work - especially for families or local community businesses. And on the issue of child labor starting up, you have to keep in mind that 1. the economy would be consumer driven, and our ethics of avoiding child suffering at all costs - would not disappear just because government regulation of our economy did, and 2. we would still have a judicial system that already forbids child abuse through labor, not through economic law, but through criminal law. So, while some kids would definitely be recruited into the work force, abuse of their labor would still not be permitted, and so long as the majority of consumers remain to be parents and family members, there would be no reason that school, playtime and other necessities wouldn't continue to take precedent in our kids lives.
  • Drug addicts would be everywhere. News Flash! Drug addicts ARE everywhere. That won't go away regardless of our economic foundations. Drugs are addicting/fun/relaxing/dangerous/available, whatever verb you want to use, they are here and they aren't going anywhere. Now, granted, the drug laws would be abolished if we had a free market, because they are almost completely an economic issue as far as our current laws regulate them. Truthfully, we wouldn't even need to create new laws either, because we only need laws against the victimizing other people in various forms (physically hurting, maiming or killing a person, stealing, etc...), which would be an umbrella act for any crimes that may occur from a person regardless of their level of sobriety. Not to mention, in countries where former drug laws have been abolished, the drug use rates went up momentarily and then fell dramatically where they have stayed.


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  • My Esoteric profile image

    Scott Belford 

    7 years ago from Keystone Heights, FL

    Great thinking BizGenGirl! What your last paragraph described is what Keynesian economics attempts to achieve and was pretty successful at for the period it was being practiced in America, 1940-2002. Now I know that you would disagree with the method Keynesian economists recommend, because it requires government regulation effect the big four, Inflation, Interest, Unemployment, and Greed.

    I will digress for a second to get back to the "equal footing" scenario, my position is that "if" a free-market capatalist economy cannot maintain relative equality using that as a starting point, then it is impossible for it maintain an overall equal distribution of wealth (with individuals going up and down, but in agregate, the GINI index remaining near zero) if the starting poing is actual reality.

    OK, back to the champagne, and here I am getting close to the edge of my knowledge base without doing more research. In any economy you choose to concieve of, whether it be 100% barter-based or 100% fiat-based, a system of exchange has to be developed where things have relative value to one another. Once those "exchange rates" become stable, e.g., 5 goats for 100 hours of your labor, the inflation/deflation cycle begins as the relative supply of things change. If the standard is 5 goats for 100 hours, and now you have to pay 6 goats for the same quality and quantity of labor, you have inflation.

    In normal circumstances, microeconomic market forces control this ebb and flow, but not in abnormal circumstances. Most often, those abmormal circumstances is mass greed throughout the economy. This is where an "unregulated" economy fails because it is those very regulations, properly created and applied, that are the counterweight to greed; it is what dampens or mitigates the effects of greed.

    To use the contemporary example of the 2002-2006 housing bubble, consider this. Half of the financial institutions were controlled by financial regulations, and, I would maintain, abided by them, albeit grudgingly. What happened, and you can find an analog for almost every historical economically-based recession/depression, is a major institution developed outside of the regulations that protected the citizens from unethical behavior; this was sometimes known as the "shadow banking" industry. They were able to practice all of the horrid things we have heard about a played on peoples natural tendancy to be greedy to their advantage; that got the ball rolling and mass hysteria took over.

    Now, I maintain that the Fed actually had sufficient regulatory power at hand to have curtailed much of the damage caused by these practices, but you had Austrian School, laissez-faire oriented people at the helm. Besides being true in the Fed, it was also true in Congress, the Excutive Branch, and the Judicial Branch of the government. It wasn't until it was too late did they (Greenspan and then Bernanke) understand what was actually happening and that their laissez-faire model wasn't working.

  • BizGenGirl profile imageAUTHOR


    7 years ago from Lake Stevens

    Yes, I agree that removing the Glass-Steagal act was a dagger in the heart. Though it's not like half the financial institutions were listening to those laws anyways... Which is an issue that I've noticed crops up continually with many financial/economic regulations. In theory, they should keep the greedy from taking over and discourage others from becoming greedy, but when the greedy don't listen/find ways around the laws, and everyone else is forced to struggle so much, the regulations end up working in opposition to their purpose. The greedy find new ways around the laws, then eventually get rid of those laws claiming they were already "out of fashion", and people become more greedy and self-serving then usual, because the trait becomes necessary to survive.

    I appreciate your clarification on what you meant about starting on equal footing, then going into the whole "rich/poor" downfall. Though I'd imagine because we could never start out on equal footing from this point, that the hypothesis of that outcome, could never come to fruit in that way. And because we'd all start out on varying levels, that a free market system would be more likely to remain diverse, which (in theory) would help to maintain a balance.

    On the issue with bubbles and the "boom and bust" cycles of economies, what captures my attention the most, is considering the possibilities of how such bubbles would function in an unregulated market. I mean, the farthest back that I've ever found a "bubble" document, was in the 1660's, when the South Pacific bubble was burst after "inflation" and stock trading (in a similar fashion to how we might recognize it today) really first got started. In my mind, an unregulated market would have inflation in the way that we see it today, and without inflation, there wouldn't be anything to 'inflate the bubble', and without anything to inflate it, the bubble wouldn't be able to burst.

    Now, I've thought about it a lot, and my hypothesis is, that obviously, every type of economy has some form of inflation, so even free market economics would have it's own form. Though I feel that instead of it being long and stretched out in both the boom and bust cycles we see now, but that it would be like a lot of tiny bubbles that inflate and deflate (without ever really "bursting"), at different times. Which would, in theory, create more stability because there would always be another bubble to replace the one that just deflated, if that makes sense. Instead of a national "burst", there would be local "pops" as some bubbles leave and others enter.

  • My Esoteric profile image

    Scott Belford 

    7 years ago from Keystone Heights, FL

    Oh my, so much to talk about, but for the moment, I will focus on the mechanics of economics after clarifying/commenting on a couple of things.

    What you state in your last paragraph is exactly what America is supposed to be all about, and, for the most part, has achieved, especially when compared to any other country on earth. Where you and I are going to disagree, of course, is the role government, both state and federal, must play (or not) to ensure we come as close to the ideal you just presented.

    The second point is my use of the term "equal". That was just a mechanism to explain the fundamental problem with unregulated "free-market" capitalism. All I was attempting to do was "suppose" the world started with everyone having exactly the same wealth and opportunity, unrealistic, obviously, but certainly a clear, difinitive starting point. My assertion was, even IF the starting point had everybody in an equal position, unregulated, free-maket capitalism (the kind you describe) leads enevitably to a bifurcated society with many poor and a few rich. The rest is to why.

    When all of the fluff is blown away, the Austrian School says that individuals make unemotional, calculated choices that maximize the "utility" to themselves. It is that fundamental belief which drives the theory of supply-demand and the power of price to regulate the enonomy. It encompasses their idea that the interaction of individuals "util" decisions and businesses production decisions that drive and control inflation, employment, and interest rates all in terms of microeconomics. The problem with this theory is that it is stable only in a small range of business activity. Within that range emotion is not a factor, so decisions on utility create the effect the Austrian theory predicts.

    It is when things go haywire, such as the most recent housing bubble, where the theory breaks down, with disastorous results in human terms. This is because there are no regulations to counter-act the emotion of greed and once that emotion takes control of a society, as it did from 2002 to 2005, the Austrian School has no mechanisms to stop it; what is worse, they don't want to stop it. The answer, according to the Austrian School, is to let it run its course, regardless of the devastation it causes society ... human suffering is the price you have to pay for unregulated free-market capitalism.

    Keynesian economics, on the other hand, assumes that the forces that drive inflation, interest, and unemployment are different than those that work at the individual level and, therefore, must be dealt with differently. Part of the controls to greed that Keynesian economics brings with it is regulation; regulations to prevent the greedy from taking advantage of the honest citizen and to make it difficult for honest citizens to become greedy. By 2002, all of those financial regulations set up between 1937 and 1970 to protect the public had been dismantled and we were back to the regulatory situation that was common in the 1800s and early 1900s. In fact, when the Glass-Steagal Act was rescinded in 2000, I told friends, we were heading for big trouble.

  • BizGenGirl profile imageAUTHOR


    7 years ago from Lake Stevens

    You have a well thought out and very educational argument My Esoteric. I can tell that you've spent a lot of time thinking about and researching this subject as well.

    And I agree that there are many large flaws to having a Free Market system. In fact, I even added that bit of 'thought-food' to the hub, because it needs to be thought out. I agree that much of laisse faire would depend on the rationality and emotional-detachment of consumers and participants, though I don't feel that it rules out laisse faire as only a "utopian dream". I feel it's just one of those "devils in the details" that has yet to have been refined.

    It's like the issue of taking the constitution back to it's original state (not that I am suggesting this is something we should or shouldn't do, but I've had the argument alot), where many folks feel that by losing amendments like the 14th Amendment, that slavery and women's discrimination would come back. After all the years we've had without it, using tons of tools to bring about the positive morality that all human beings are equal regardless of gender or race, and that no human should be subject to slavery - I doubt that we would suddenly fall back into that sort of 'dark ages' draconian structure, if the constitution were brought back to it's original format. Granted, the whole constitution as a living document/dead document issue is another subject, but I feel it's relevant in terms of Laisse Faire.

    Yes, people make most of their decisions from an emotional position, that is one of our more unique human qualities. Does that mean that all emotionally based decisions will be harmful to others or negatively effect the economy? Not at all.

    I would also like to point out, that unless you can correct me, there are no economic systems that are complementary to our emotional and irrational nature. Neither control nor anarchy are aligned with the way we humans are, and so even with the flaws that will forever remain in laisse faire, those same flaws are inhierant in every other system as well (including our current system)and it will remain that way until we either become less emotionally based (which dehumanize us) or we develop a system aligned with our emotional nature.

    Now, one of the trickiest issues, as you said, and that I agree with, is that there are those who would find themselves in powerful positions, whom might use their wealth for nefarious actions. This is a flaw in the every system (especially in our current situation), and it is something that really needs to be well-thought out, especially in the instance of laisse faire. I feel that a consumer-controlled economy would mostly regulate itself, but in terms of "larger" problems, more attention needs to be given to the repercussions of those acting nefariously. There has to be a way to control any criminal elements (heavy pollution, fraud, etc...) without controlling the market, otherwise the system would follow the same problems we currently have. I think a localized Liberty Bell system would handle it best, but I alone can't make that decision. There are many other ideas and notions well worth consideration when it comes to the deciding factors of economic changes.

    Yet and still, as noted in the hub, I feel that if barter and trade were more prevalent amongst people, then there would be less of a chance for any one person or small group of people, to amass such an amount of wealth that they could truly hold that much power over the majority. With the combination of the ability to trade/barter goods for resources and luxury items, why use cash/credit if you don't have to? Monetary currency would become the intangible paper it really is. It's simply a convenience, which people do like, but as you said, many whom would not be as successful with paper money, would be cut out of that area of the market, but they would not be left to suffer as they do with our current system where we rely almost solely on worthless green paper and plastic cards to gain resources with. In fact, the "wealthy" in a laisse faire system, would be the farmers, entrepreneurs and artists (of varying industries).

    Though their wealth would be in different arenas of the economy, and so no one could truly establish a "take all" kind of wealth. The farmers would be wealthy in terms of land, the entrepreneurs in terms of money and the artists in terms of influence. All very powerful, yet different forms of wealth. Sure, some entrepreneur could buy a farm and capitalize on the land to make more money and hire some artists to engagement and influence, but the same could be said for others. A farmer could just as easily gain themselves an artist and an entrepreneur and do the same things in their own ways. Yet and still, their success would depend on their level of motivation and ability to reach consumers - who weild the real power. The great thing about that, is that because of our "differences" and constant nature of change, that no single entity could hold power for too long, if they could even reach that level. In fact, it is buy our very nature to collect and protect (or be greedy), that it would be less likely that the "wealthy" could share long enough to really amass true "power" in economic terms. And heck, people have been trying since the dawn of humanity to amass that sort of power, and it has always been thwarted by our supposed 'flaws' (emotion, irrationality, etc...) rather than the altruistic theory that we can "control" people through regulations and similar tactics.

    Example: was it "altruistic" for our founding fathers to revolt? No way. It was selfish, self-satisfying and macro-sacrificing. It put hundreds of thousands of people at risk of loss of life, and many of those who were in the position of intellectual "power" at the time, were not there simply to think about those "without", as would be necessary in order for it to have been an altruistic action. Heck, the American revolution was probably one of the most irrational, illogical and emotional decisions that we humans have made throughout history, and it also happens to have been one of the best things that could have been done by our ancestors, and because of those actions it became more 'altruistic' than it was intended to be. By fighting for their own freedom from economic and physical restraint from Britain, our founding fathers paved the way for 'equality' amongst those with less as well as those with more, even though that truthfully, was not their full intention.

    On another note in your comment, I am curious as to where you've come to the decision that laisse faire considers everyone to be "equal". I have seen a few editorials that considered this to be so, but I've never really found anything concrete to satisfy my view that laisse faire is based on the individualities we each possess. Now, in a way I could see that as being "equal" because we are all 'equal in our diversity' or 'equal in our differences', but in terms of cognitive and emotional intelligence, beginning resources and our instinctual level of motivation, we are anything but "equal". Though I am of the opinion that being "equal" really isn't as important as everyone makes it out to be. I am currently broke, and lacking in many resources, but that does not make mess less of human being, nor does it make me "unequal" to those with more than I currently have. I have just as much ability and motivation to gain what I need, which is all that matters. Those with more or less motivation get what they go for. I feel that many use the word "equal" out of context, way to often, much in the same way that the word "unique" is misused and misunderstood. What we need isn't "equality", it's balance and objectivity, which we'll never fully have do to our emotionally-based nature, but here's a quote that I think relates best to how many people view 'equality':

    *"Equality to the person who believes in the Constitution is the natural right of every individual to live freely under self-government, to acquire and retain the property he creates through his own labor, and to be treated impartially before the law.

    Those who believe

  • My Esoteric profile image

    Scott Belford 

    7 years ago from Keystone Heights, FL

    An extremely well written hub, BizBenGirl, unfortunately it works only in Utopia and not the realy world that can ever exist. The cloesed this experiment ever came to fruition is in America from around 1812 to the anit-trust days of President Theodore Roosevelt in the early 1900s, then continuing after that short period until 1933 when it died in the Great Depression and President Franklin Roosevelt's New Deal.

    The Austrian School of economics, which you are describing, is fundamentally flawed because it is based on human being making rational, unemotional decisions virtually 100% of the time, and we simply don't do that much of the time. What you describe also requires a 100% alturistic society, for if only one smart person is not alturistic, then government is needed to control his or her economic activity lest they take over most of society.

    The reason for this is that an economy based purely on microeconomic is inherently unstable in two regards. First, if you assume 100% of society starts off on an exactly equal footing, the nature of "free-market" capitalism rewards those who do better and punishes those who do worse and this is called a "positive" feedback mechanism where "positive" is not a good thing. A positive feedback accelerates momentum in either direction and without a counterveiling force of sufficient maganatude, the rich Will get richer and fewer in number and the poor Will get poorer in increasing numbers. Because the Austrian school denies the existnce of macroeconomic, i.e. the interraltionship between unemployment, interest rates, and inflation, there is nothing in a "consumer-driven" only economy to counter-act the natural forces of "free market" capitalism to concentrate wealth with a few. The reason for this is that the premise of Conservative economics, that people will make rational unemotional decisions based on their percieved desire to maximize the utility of a particular purchase, which, of course, allows for zero alturism. Conservative economics is based on inward, self-serving decision making while the economy you describe, to succeed, requires outward, alturistic decision making.

    The second problem with Conservative economics is, because of the positive feedback mechanism, inherantly unstable as evidenced by the frequency and magnitude of economic downturns prior to 1937, a period of almost unbroken Austrian school-style of economics, to the period after 1937 (until 2002) when Keynesian economics took hold. In the Conservative period, economic dowturns due to market reasons is, on average, once every 5 years with the vast majority being recessions at least the size of the on in 2008. After 1937, it was once every 10 years with none the size of the 2008 recession.

    It is hard to argue with reality.


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