There Are No Free Markets

Capitalist theory states that as long as there are willing buyers, willing sellers, and governments that enforce property rights without interfering in sales, then you have free markets. It’s a bedrock plank of Adam Smith’s theories. I’ve bought into this all my life, even when things like NAFTA bothered me when I was younger. “OK, the appliance factories close, but we sell more software, and the market fixes everything eventually”.

But there are no free markets.

How did I come to this conclusion? Was it a giant stock market crash? Weimar-like misery? The superiority of competing Socialist systems?

No. We’re making more money than we’ve ever made. Collectively, anyway. Just look at Apple’s new campus. You couldn’t have dreamed that up in Star Trek. But Wealth ≠ Free Markets. What if you have willing buyers, but the sellers collude to keep you from buying for reasons that have nothing to do with profit and loss?

This is something that Adam Smith never thought of.  When Dylan Roof shot up that church in South Carolina, and Ebay banned Confederate items, Smith would have said “Don’t worry, Ebid or Bonanaza will go after that business”. But then they banned them too. When Alex Jones was banned from YouTube, Smith would have said “Don’t worry, Vimeo wants those viewers”. But then they banned him too. As Twitter purges right wing users, Smith would say “They can go to Gab, where free speech is the first principle, and… wait, what do you mean ‘Gab’s been kicked off its host and other hosts are refusing their business? That’s not supposed to happen!”

The weak spot in Smith’s theory is simple: he couldn’t see that politics is so important to people, that they’re willing to give up profit as long as they’re making some money. He couldn’t foresee a group of sellers getting together and going “Let’s not sell to THOSE people” for political reasons. Smith couldn’t imagine the existence of SJW oligopolies. Which is exactly what we have in Silicon Valley. And in Hollywood, and in retail, for that matter. After Ebay’s confederate ban, Amazon and Wal Mart and Target rushed to virtue signal right along with them.

We don’t have free markets. We have monopolies and oligopolies, and even when you try to “build your own” (as the Left likes to tell us to do), well, even THEN they try to destroy you. And as Andrew Torba is discovering over at Gab, building your own does no good if collusion by oligopolies makes your product unusable.

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17 thoughts on “There Are No Free Markets”

  1. Bob Thompson:
    Didn’t racial minorities suffer this same way from racial discrimination in the marketplace before civil rights laws made such behavior illegal?

    Not even segregation was like this. As long as blacks opened their businesses in their parts of town, no one cared. The problem wasn’t collusion. The problem is that blacks were just too damned poor to start their own Woolworth’s. In places where they DID have enough money to start their own businesses, they were largely allowed to do so. See pre-war Harlem, for instance. To my knowledge (and someone point out examples if I’m wrong), no one ever tried to stop blacks from opening their own restaurants or bars or what have you in the South. Even at the height of Jim Crow, blacks in the South had state supported colleges.

    The Left doesn’t even want to let us live in segregated situations. We’re not even allowed to go “OK, look, we don’t want your Twitter. We’ll build our own and we’ll be over here, and you be over there”. Their whole point is essentially conquest. We’ll bend the knee, confess our sins and join the purer faith,  or we’ll get nothing. ESPECIALLY if we try to build it ourselves.

    How long until someone complains about the Hatey Haters of Hate at Ratburger to WordPress? Do you really find it hard to believe that WordPress would ban us for “hate speech”? I don’t. Not anymore.

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  2. Douglas:
    But Wealth ≠ Free Markets. What if you have willing buyers, but the sellers collude to keep you from buying for reasons that have nothing to do with profit and loss?

    This is hard for some conservatives to understand. If I had a nickel for every time I was told, “Businesses are motivated by profit; they are not ideological” I’d be able to buy a coffee at Starbucks.

    Also worthy of mention is Patreon’s deplatforming of Sargon of Akkad. Jordan Peterson and Dave Rubin are hopping mad:

    The head of Patreon had the audacity to come on Rubin’s program and deny that he would ever do exactly what he did. I’ve “deplatformed” Patreon and made a direct donation to Rubin.

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  3. drlorentz:
    This is hard for some conservatives to understand. If I had a nickel for every time I was told, “Businesses are motivated by profit; they are not ideological” I’d be able to buy a coffee at Starbucks.

    Yeah, but you’d have to share the restroom with a sterno bum.

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  4. Douglas:
    Not even segregation was like this. As long as blacks opened their businesses in their parts of town, no one cared. The problem wasn’t collusion. The problem is that blacks were just too damned poor to start their own Woolworth’s. In places where they DID have enough money to start their own businesses, they were largely allowed to do so. See pre-war Harlem, for instance. To my knowledge (and someone point out examples if I’m wrong), no one ever tried to stop blacks from opening their own restaurants or bars or what have you in the South. Even at the height of Jim Crow, blacks in the South had state supported colleges.

    Jim Crow was really awful.  Banks were required to refuse service to blacks, who had to form their own banks, which were small and vulnerable to economic downturns.   Banks failed regularly, and customers just lost their money with no recourse.

    Of course, that was also common in the South among whites.   My family had three banks to fail with their funds in the twenty years before the crash of 1927, so long after the end of Reconstruction, the rural South was mired in economic distress.   Even with that said, the situation was worse for blacks.

    Banking regulations under FDR really did enable the economic growth we have seen since then.   If the banks have now kowtowed to Leftist demands, then we need to take a real close look at our banking regulators.

    It was Barney Frank threatening new regulations that caused them to issue all those no-down-payment mortgages in the late 1990s and early 2000s.   Perhaps President Trump could tweet at them and get them to quit boycotting businesses on the basis of politics.

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  5. Douglas:
    How long until someone complains about the Hatey Haters of Hate at Ratburger to WordPress? Do you really find it hard to believe that WordPress would ban us for “hate speech”? I don’t. Not anymore.

    That is one thing we don’t have to worry about.  Ratburger.org runs on the open source WordPress software platform, but does not use the WordPress.com (Automattic, Inc.) hosting service.  The WordPress software (and almost all of the software we run on the site) is licensed under the GNU General Public License (GPL) which does not permit restriction of redistribution of software for any reason.  If a future version of WordPress were released under a more restrictive license, sites would be free to continue to use the older versions licensed under the GPL.

    The vector of an attack on Ratburger.org would have to be convincing Amazon Web Services (AWS) to cancel its hosting contract.  To date, I am not aware of AWS revoking hosting services from sites for political reasons.  If they did, the site is deliberately designed to run on a “bare metal” CentOS Linux environment which is available from numerous hosting providers.  If all refused service, I estimate it would take less than a week to bring up the site on the Fourmilab server farm which ran the Fourmilab.ch site prior to the cut-over to AWS  in January 2016.  Then they’d have to go after terminating the site’s IP connectivity which is through UPC Cablecom, a regulated common carrier public utility, which would be a lot harder nut to crack.  Since we don’t charge subscription fees, there’s no payment processor to attack, and since there are no advertisements, the outrage mobs can’t go for demonetisation by the ad networks.

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  6. Douglas:
    The weak spot in Smith’s theory is simple: he couldn’t see that politics is so important to people, that they’re willing to give up profit as long as they’re making some money.

    I’m certainly not! He obviously didn’t know me because I realize the more profit I make, the more powerful (even politically) I become. (See Soros and the Kochs.)

    I actually believe the free market is not only providing consumers with what they want but also an environment in which consumers feel comfortable. What is startling to many of us is the pace with which the demographics are changing. In 1955, an African-American could not be served at a lunch counter in Alabama; in 2018, I probably wouldn’t be served in a store in Berkley, CA wearing a MAGA shirt.

    Why?

    Not politics. Never believe entrepreneurs are not thinking bottom line and if they aren’t, they’re not in business for long.

    Business owners make this kind of decision everyday; even in my little sports jersey empire, you wouldn’t believe the politics that discourage people from buying. Michael Vick, Pete Rose, Kobe Bryant, etc. created many a heartache for me. Somebody took offense at one of my favorite NHL jerseys because the player who wore it allegedly beat his wife. I looked at each instance and decided who could potentially hurt my business and he was gone.

    That’s the definition of the free market folks: the customers rule.

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  7. EThompson:
    I’m certainly not! He obviously didn’t know me because I realize the more profit I make, the more powerful (even politically) I become.

    I wish the folks who run social media were all like you. Unfortunately, they are not.

    EThompson:
    That’s the definition of the free market folks: the customers rule.

    One more nickel for that Starbucks coffee I’ll be sharing with the sterno bum.

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  8. drlorentz:
    EThompson: That’s the definition of the free market folks: the customers rule. One more nickel for that Starbucks coffee I’ll be sharing with the sterno bum.

    You reminded me of one point I forgot to make. I like Starbucks coffee and I just can’t be Tucker Carlson or Ann Coulter all of the time. 🙂

    Sometimes I just want a good and may I compliment Howard (even on his way out) – on an interesting cup of joe.

    Apparently, Schultz may be headed for national political office. This inspires me to work harder to help any or all of his opponents.

    But I’ll still buy his coffee.

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  9. Adam Smith DID WARN OF THIS in Wealth of Nations, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    Can you imagine Facebook, Google, Amazon, Apple, etc. not conversing with each other ?

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  10. drlorentz:

    John Walker:
    That is one thing we don’t have to worry about…

    It’s comforting to know that we won’t be the first ones up against the wall, or even the second or third.

    This security should make Ratburger.org the internet refuge of choice for all conservatives.

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  11. Joe Conservative:
    Adam Smith DID WARN OF THIS in Wealth of Nations, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    Can you imagine Facebook, Google, Amazon, Apple, etc. not conversing with each other ?

    This isn’t quite what Smith had in mind; he was concerned about economics and markets, not political action against customers.

    Facebook, et al. need not conspire. They are all already of the same mind, fully invested in leftism. Their executives may have had some general political conversations, agreeing with each other that Orange-Man-Bad and that hate speech is bad, but they didn’t need to conspire to deplatform any specific person. It already fits into their belief system.

    Furthermore, they are not responding in a coordinated manner. Sargon of Akkad has nearly a million subscribers on YouTube right now, a week after Patreon kicked him off. He’s also still on Twitter. Even if they kick him off tomorrow, it’s more monkey-see-monkey-do and virtue signaling than it is a conspiracy.

    The same applies to universities dis-inviting speakers and going after dissidents. Do you really think that their presidents needed to conspire to do this? Did the dean of Penn law school check with anyone before hassling Amy Wax? Doubt it.

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  12. Douglas:
    There Are No Free Markets

    Well, there’s no such thing as gravity either, but the syndrome associated with the label is reason enough to behave as if it did exist.

    Just as the Constitution did not mention the specific methods to circumvent the Constitution, Smith need not have identified each challenge to a free market.  I agree that there are no totally free markets, but then market does not solely mean economics.  Market forces are decision-making writ abstract, and there’s more than monetary substitution going for the idea of market forces. Everything from war to sex emerges as a market-arbitrated activity, with different values for “market”.

    Clerk: This invasion of Japan will cost you a million men, with a ninety-five to ninety-eight percent chance of capitulation within one year.

    Customer: Man, that price is too rich for my blood.  How’s that bomb coming along?

    Clerk: Got a couple right here — fifty to eighty percent chance of capitulation within one month; sorry no figures for the one year outlook.  Normal flight risks only.

    Customer: Well, this is an easy choice.

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  13. FAANGT bias toward progressivism is a symptom that a monopoly controls internet social media platforms. Adam Smith rallied against Trusts, and the East India Company, as he would rally today against FAANGT. Now most conservatives / libertarians know why and perhaps in the future more will too !

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