Free Market vs. Fair Market

I'm a big fan of the market.

It allows trade and advancement based on mathematical calculations that resist corruption, racism, sexism, etc...

I support an open market regulated by democracy as the referee. The condition of the referee has been changing. Our governments have become more accountable and more representative (more democratic) over time. I don't want a dictator or a king to be the referee.

While getting more democratic over time, I also understand how someone might see government becoming less a referee and more of a player. This is true in the United States (FDR and other more recent presidents have been increasing the role of government programs), but in a larger historical sense, we are distancing ourselves from a history full of authoritarian regimes, kings, and dictators that controlled most aspects of society.

I don't want to return to authoritarian rule of our societies (and neither does Ayn Rand after her experience with the Soviet system), but that doesn't mean I want to go in the complete opposite direction of having an unfettered free market with no democratic referee.

I prefer a balance somewhere in between that involves a democratic debate that will last as long as our species is alive. We will constantly need to adapt to our experiences, discoveries, and surroundings.

The words "free market" and "fair market" are not the best, but they describe a general debate between people who want an unfettered market and those who want a market refereed by democracy.

We also could discuss if there is a role for democratic governments to be involved in providing goods and services. I lean toward keeping the referee out of the game in as many situations as possible, but government programs have been successful (and also sometimes corrupt) in providing certain services.

However, I would prefer to find ways for private businesses or charitable organizations to provide the services if at all possible.

I'm not convinced yet that government services should be banned all together.

For example, during hurricane Katrina, the Red Cross and Wal Mart did admirable jobs helping people. However it was only the state and national governments that had black hawk helicopters and Coast Guard rescue teams available to provide assistance. Also, the recovery and relief efforts far surpassed the spending ability of both the private and charitable efforts.

The Bush Administration wants to reduce government services - although they have borrowed and spent far more than any President in American history - so they are resistant to doing relief operations in both the gulf coast and in Iraq.

It certainly is possible to have an ideaology that says everyone should be on their own, but how do you justify that Black Hawk Helicopters are acceptable for klilling, but not for rescuing?

Another issue related to this discussion is that we have numerous referees. We make decisions on a personal level, but we also have local, state and national governments. In addition, we now have global institutions that are acting as referees (International Monetary Fund, United Nations, World Trade Organization, etc..).

Some of the protests against these global institutions in the past decade have not been anti-globalization as the media reports. Most of the protests (Seattle, Miami, Quebec, etc...) are in opposition to global institutions that act as referee without having democratic transparency or accountability.

So I see the protests as being pro democratic globalization rather than being anti-globalization.

I think a democratic referee is needed along with our market or else people will sell heroin to children, dump toxic waste into our rivers, and over harvest our resources to the point of environmental collapse. I think we also need a referee or else people will use violence to take away the freedom of other people to engage in legitimate exchanges of value. This includes the protection of property rights, etc...

In response to the idea that fishing oceans to the point of collapse is not a good business model (and thus businesses will stop fishing the oceans in unsustainable ways), I would argue that recent experience shows us that businesses will do things to make a quick buck even if it leads to the destruction of their own market. The fishing standards being put in place are government directed and enforced - and are often fought against by the fishing companies. So even though over fishing can lead to the collapse of the market, we still see people trying to profit as much as possible by catching as much fish as possible to generate their immediate market value - even though it will lead to the collapse of the fish in the long term.

The same could be said about oil. We know there is a limited supply of oil, but oil companies are trying to profit as much as possible before the oil runs out - ensuring the depletion of the resource for generations ahead of us.

I know that scientific research can lead us to other energy sources, but the oil will be mostly gone. Oil being gone is not as big a deal as the fish being gone - but the point is that market value and corporate decision making processes have not been shown to be of a long-term nature - especially in terms of providing a sustainable future for the human species. Democratic media outlets, research, legislation, and debate have played a role in our progress.

I guess my argument is that market value is sometimes not forward thinking enough to prepare for possible negative consequences. Dumping pollution into the air is very profitable, but it causes acid rain.

Democratic decisions have been made to reduce the pollution being pumped into the air. It is not very often that the pollution limits are started - or even supported - by the industries causing the acid rain.

Corporations are not necessarily hurt by the negative consequences of their actions. Doing something bad is not a deal breaker. Corporations can just change their names - as Andersen Consulting became Accenture after the Enron affair.

We have the ability to use the democratic referee to reduce negative consequences before they happen.

Mattel is losing billions of dollars because people discovered their Chinese toy manufacturing process was flawed and dangerous to the health of babies. Mattel used the Chinese manufacturing process because they were making billions of dollars by producing toys in the low wage, low regulation environment of China.

Why wait to discover lead in our children's toys - or to discover underpaid and over worked humans making the toys - if we have the ability to blow the democratic referee whistle?

In terms of our environment, our Earth has ways of balancing things out. I know the earth responds to global warming with the melting of the polar ice caps as a natural cooling system. Yes, the Earth is wonderful, but there are consequences for the human species no matter what actions we take. We influence the environment we depend upon for survival through the decisions we make.

In addition to the extreme examples of heroin sales to children, etc... I also don't like the idea of an unfettered free market because it leads to a concentration of wealth that is then passed down according to hereditary values more than according to market values.

Market societies have generally been shown to result in a 80-20 split where 20% of the population owns 80% of the wealth. I know the argument will be made that this is good because the market is just rewarding those who deserve the value. However, I would argue that allowing this situation is opposed to how we want the market to function.

For example, George W. Bush did not earn his wealth. In fact, all of his companies ended in failure. He gained his wealth because he is the son of a former President. His Saudi Arabian investors continued to pump oil money into his companies because they wanted favor with his father.

We also can look at corporations as an example. Corporations never die so they can continue to gain huge levels of wealth based on their size and infinite longevity.


Monopoly corporations compete in the market on a scale that has very little to do with market values. I don't choose certain companies because they offer the best service, I "choose" certain companies because they are the only option - even though I am very dissatisfied with their goods and services. This type of situation is not based on market principles.

For example, some people think individuals can try to get a message out into the marketplace to see if it will be rewarded with economic value. I don't agree. I think market forces have led to a situation where most things we see and hear are dominated by five companies who own most of the newspapers, television channels, and radio stations. A student can write something in a school newspaper, but it will not have the same power as a message that is promoted by all media outlets in unison.

For example, I would think that people would want to know that Saddam Hussein was not involved with 9/11. I think most people would be willing to exchange market value in order to know the truth, yet this falsehood was promoted by our political leaders and the monopoly media to the point where saying anything else was considered rude and unpatriotic.

Even though George W. Bush finally admitted that Saddam Hussein had nothing to do with 9/11, 69% of the American public thought Saddam Hussein was involved with the attacks.

The internet is now allowing for a more competitive environment, but we still have huge media monopolies that are based more on monopoly power than on open competition.

Another way I think about this is with bees again. Think of honey as their version of market value. All bees are judged based on their ability to go out and bring back honey.

What would happen if a bee (or millions of bees all over the world) rejected the market value of honey within the hive and decided to look around instead of just focusing on making honey?

The bee might see that the hive was growing too large and that it was all being supported by one small strand connected to a tree limb.

Would the bee have any way of telling the other bees that their efforts were leading to the collapse of their own hive? Would the other bees even stop long enough to listen to the message being presented? Would the system of communication in the hive allow for the message to become widespread and judged in an open way?

The argument could be made that it is natural for hives to fall to their own destruction, but we are not bees. We have the ability to think about what we are doing and consider taking other actions.

Another example I wanted to bring up is the difference between private and public universities. Some may see public universities as a form of socialism that should be rejected. However, there are consequences to changing all of our universities from public to private.

My favorite university has been going through this process as the Republican State Assembly has cut public funding down to about 10% of the total operating budget.

First, this has led to better sports teams as the athletic department became a good source of revenue - so I won't argue too much against that because I like good sports teams.

However, the educational curriculum is now dependent on who can raise the most money.

The business school is doing very well while the music, arts, liberal arts, philosophy, etc... departments are cutting programs. Even within the departments, decisions are being made according to market values instead of according to educational values. Saudi Arabia gave a lot of oil money to the political science department so now there is a new Middle East studies program - tilted in favor of the corrupt and authoritarian regime of Saudi Arabia - while democratically funded programs that might encourage tolerance, democracy, an open market, etc... are being cut.

The same example could be used in the engineering department if renewable energy research was cut in favor of more classes about how little harm oil does to our atmosphere - sponsored by Exxon Mobile and Phil Mickelson.

In my peace work, I am trying to bring more efficient means to solving our problems, but I am over matched by monopoly companies who use their overwhelming economic value to squash, hide or distract people from a message of peace.

For example, it has been shown that the best way to win the war on drugs is with treatment that reduces the demand. Yet our government - currently sponsored by huge corporate interests - is spending $10 on military efforts compared to every $1 being spent on reducing demand.


People spend money to get people elected who will then use the U.S. military to advance their economic interests. Oil companies want to protect their oil fields in Colombia so we get a "war on drugs" that has had very little success in reducing the amount of cocaine, but has had huge success in protecting the Colombian oil fields for Occidental Petroleum and other companies.

The same with Iraq. We have Saudi and Egyptian nationals attacking the United States on 9/11 because we are supporting their corrupt regimes, but it leads to a "war on terror" that takes the fight to secure oil fields in Iraq (and probably Iran soon) even though Iraq had nothing to do with Al-Qaeda or 9/11.

The war in Iraq has done very little to solve the terrorism problem - in fact terrorist attacks have never been higher nor the United States so despised around the world). However, the "war on terror" has been successful in allowing the United States to establish huge military bases on top of some of largest oil fields in the world.

I know this is counter to what we are hearing in the media, but I could write a whole book explaining how the War on Terror was a bait and switch operation by corporate interests who bought the White House and then used 9/11 as an excuse to accomplish their pre 9/11 goals of privatizing the Middle East and the oil resources - through the use of public (and personal) expenditures and military violence. Read Larry Everest's Oil, Power, and Empire for a good primer on this subject. (I'm just reading it now)

This brings me to the final point I wanted to make. If we agree on the need for a democratic referee, should the referee of the market system be paid for by one or more of the players?

Do we have a democracy if our "democracy" is based on who has the most money - or does it lead us to a plutocracy where the rich can simply buy power and influence?

Should market value be the basis of our democracy? Should monopoly media outlets be allowed to charge huge rates for political advertising - making the only political speech the words of those with the most market value?

Again, the internet is changing things because it is now easier to get a message out without needing to go through the monopoly media, but the perverted forms of market value that rule our political process are still dominant.

If Verizon and AT&T get their way, they soon will be able to turn the internet into a monopoly controlled market where the only voices being transmitted are the voices with enough money to pay their tolls.

I pay for my own servers, domain names, and internet connection. There is no reason why I shouldn't have the ability to connect with whom ever I want to connect with in the digital world.