A Time To Choose: Markets or Political Plunder

Professor Michael Rozeff has some important things to say:

Do you favor free markets or do you favor the State? Do you think that these failures are failures of the free market or do you think they are failures of the State?

The same questions arose when the Great Depression occurred. The government blamed that on speculators, on the stock market crash, on greed, on over-consumption, on under-consumption, on sticky prices and wages, etc. But the real causes of the Great Depression and the real failures owed to government. The government created the Federal Reserve system, and it was the Fed that created the deflation. The government regulated banks and supported unit (isolated) banks, and it was these isolated banks that failed in the thousands. It was the government that raised taxes and tariffs and choked off economic activity. Then, having begun the depression, it was the New Deal that prolonged it. It was the New Deal that over-regulated and cartelized the economy. It was the New Deal that started up a new devaluation of the dollar.

This is a time to look carefully and choose up sides: free markets or the State? There is no in between. Freedom vs. slavery. Which is it?

A free market is not a lawless market. It is governed by natural law and judges and juries administering that law. It is governed by agreements that merchants make among themselves, and judges and juries that handle disputes that arise. It is governed by the consumer who has the say-so of whether or not to buy a product or service. Liability is assigned to those who are responsible. Losses, when they occur, are borne by those who are responsible. They are not spread to taxpayers by edict or force. A free market is not chaos. It has governance, but it does not stem from the variable and fickle authority of legislators who take bribes and lobbyist money. It stems from jurists who follow a body of jurisprudential principles.

A free market is definitely not a State-regulated and State-controlled market. Once the State starts legislating markets, the consumer’s say-so disappears. Merchant agreements become targets for anti-trust. Product innovation deteriorates. Once the State starts legislating markets, the weak sisters petition the State to halt the successful companies in their tracks. When the EU fines Microsoft an unbelievable amount of money and diddles around with the details of what Microsoft may or may not include in its operating system, there is no free market any longer.

Once the State gets into the act, it plays favorites. Some businesses that have losses are bailed out. The business does not pay the price of its errors. The losses are shifted to taxpayers. That is what is happening today. This is the opposite of a free market.

When we have a central bank that controls the amount of high-powered money in the economy and when such a bank can bail out at its own discretion whatever financial institutions it pleases and in whatever amounts it pleases, we definitely do not have a free market in money or banking. When bank deposits are insured, we have no free market in banking. When we have government-sponsored enterprises with direct lines of credit to the U.S. Treasury that buy mortgages, we do not have a free market in banking or mortgage lending or housing.

You'll want to read the whole article.Another great one from Michael Rozeff.