The myth of the free market

The question of whether governments should intervene more or less in the markets has dictated political debate for years. Yet the discussion around the ‘free market’ often takes on the binarism of much political discourse – a hook to hang your team shirt on, if you like. Yet we might consider the notion of the ‘free market’ as mythical as the Minotaur.

Civilisation by very definition, involves implementing and sustaining some rules of engagement (else we would revert to beating each other with flints). With the exception of dysfunctional nation states, these rules of engagement are created by governments. So the market itself lives within a set of rules and regulations that define the parameters of our individual actions.

At its core, a genuinely ‘free market’ would have to involve the free movement of labour. It would mean eradicating national borders. A genuinely free market would likely mean that all of our goods and services would come from very few providers, as the strong swallow up the weak. And it would mean that we would have to physically protect our properties from incursion, as a free market would equate to an absence of lawful property rights.

As for the notion of less government? Here, we need only ask why the US taxpayer subsidises the oil industry or domestic agriculture. Or why the cost-of-living crisis has seen a vehemently ‘free market’ government hang their first policy on helping households manage the rising cost of energy? And why indeed, were private banks bailed out during the Global Financial Crisis? Was that not state intervention in its most exaggerated form - in which UK banks did, in fact, get ‘nationalised’? George W Bush’s assertion that by bailing out the banks he was abandoning the free market to save the free market, leaves little else to say on the matter.

Capitalism is not a static system. It cannot afford to be. Yet it seems that the continued narrative around the ‘free market’ is being used as a convenient scapegoat for society’s woes. The government has always ‘intervened’ in the markets. The argument about state intervention has to be changed; the real question should be around who writes the rules of the market and who those rules are made for.