Friday, 22 April 2011

Free-Market Economics

"If the market is blind to need or merit, how can those who have no reasonable expectation of benefitting from it be reconciled to their situation?" (Friedrick Hayek)

This is indeed a problem for free-marketeers. Ever since the days of Adam Smith, the fundamental notion has been that the "hidden hand of the market" has meant that, while I work to make money for myself, I also benefit the community as a whole. But supposing this is not the case? If the working of the market means that I lose my job, or my hard-earned skills become worthless, or the goods I produce can no longer be sold at a profit, what possible motive can I have for supporting this system? If I, or my family, have urgent needs (such as sheer starvation) which the market is not satisfying, surely I am entitled to demand some other system? I suppose that some appeal could be made on the grounds that I ought to subordinate my personal wellbeing to some greater cause: patriotism, the "general good" and so forth, but such metaphysical notions really have no place in free-market theory.

Intellectuals of all kinds, from Karl Marx to D. H. Lawrence, have despised the mercantile approach. This is because intellectuals want to discuss questions such as "Is it good?", "Is it beautiful?", whereas all the market wants or needs to know is "Will it sell? And for how much?"

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