Anti-Market

by Dash last modified 2012-12-06T04:20:54+00:00
Dash muses a little on anti-market behavior.

Every anarcho-capitalist will tell you that the market incentivises good behavior, in that if it is more profitable to do work than it is to lie, cheat, and / or steal, then people will by and large work and not do any evil things.

But let us consider anti-market behavior. What is that in the first place? Anti-market behavior I would define as behavior that goes against the principles of the market. We can jump in and say this is the aggressive use of force to reach a goal, but we can be specific too. Theft is an anti-market behavior because it goes against property rights and freedom of contract, fraud is an anti-market behavior in that it breeches contract law (if you don't have all the right data to consider a contract, it can usually be considered void). But there are other behaviors that, while they seem to go against the honesty that anarcho-capitalists say will be rampant, aren't anti-market either.

I speak of course like those super libertarian concepts like legalizing blackmail. In fact, we can start there. Blackmail should be free to perform because it is a pro-market behavior. Blackmail is rarely if ever perpetrated against people who have nothing to hide. Usually victims of blackmail are those who are doing shady things themselves. If we allow blackmail, then we incentivise all people to act with correct market behavior, lest they become victims of blackmail. No man or woman can pay off people forever. Either they'd want to come clean, or not get involved with doing shady things in the first place. Even if we disregard the utility of blackmail, there is no property right a victim could go to court with. Modern "Austrian" economic thought holds ideas to not be scarce, and therefore cannot be called property. A reputation isn't even a part of a single person either, it is a collection of ideas from other people. No person can take another to arbitration over the ideas that people form in their heads.

So it seems that the market incentivises people to act within the context of the market. Sounds rather utopian I suppose, but the market can legitimately counter anti-market behavior. One common question is "won't a government just form again"? Well, sure. It could very well try, although I don't expect that to go very well.

The answer is that if a society ever reached an anarchy based propertarian society (anarcho-capitalism), it would have been reached by a population who were wholly embracing it and likely to have formed it by defending themselves from archonic (government) organizations. These same people would likely stand up and do it again if pressed. Even if we assume it's seven-hundred years later, after seven-hundred years of the free market, we'd have a free market defense industry. No, not Blackwater, but organizations who get paid solely to defend and risk losing their customers if they even look aggressive. So we can try to think of one defense company going rogue and trying to become a government, but those not caught in the net would stop paying said rogue agency and would instead start paying non-rogue agencies. The good agencies would not only want to defend their customers from the rogues, they would want the rogues defeated for the good public relations and the potential income stream from those who are being governed by rogues. All these good agencies would be banding together to save the public even if the public could do nothing about it.

Another big question people have is "what if the market isn't right?" What if the market incentivises behavior that is anti-social?

How about discrimination based on gender and race? If you can believe it, price saves the day for everyone involved, given that we all discriminate and it's easy to see based on what you buy and how much money you're willing to spend. Let's say everyone ever decides women are less useful than men at work. Men all over the world would have work, women wouldn't. What doesn't happen is women leaving the labor force. They're still looking for work, and to incentivise employers into hiring them, they might offer to do more jobs at once or accept lower pay all so that they can get in and prove their worth. The pay scale for women might be decreased, but they'd still find work all over. This lower pay scale makes it so that it is more profitable to hire women than men, and so business will do so. As more women get hired, there are fewer women to hire, and businesses will compete against each other by offering more money and benefits to women to bring women in and stab their competition at the same time. And so the pay scale of women rises up toward and eventually to that of the men. If the pay scale of women surpassed that of men, then it would be the inverse, where it would be more profitable to hire a man rather than a woman, and so the cycle begins anew. Social justice be damned, the market works.

So basically, we shouldn't hold the market to a social standard, but rather let the social standard be held to the market, because while talking about a just world is fine, a market incentivises good over bad. Just as we do not expect governments to eliminate all crime, a market cannot be held to that standard. The point of a market is equity, where moving up and down in society is just. So long as you work and do for others you will move up. If you try anything aggressive, you get put back down. This equitable system incentivises good behavior so as to profit and be most happy. The only exception is that of archonism: Picking winners and losers. Archons are the only anti-market forces to worry about.

The "winners and losers" argument isn't made as often as I like. I found myself describing government to somebody and saying they just choose winners and losers, and this person as a capitalist replied, "that's exactly what capitalism is." Well, no. Capitalism is about profit and loss. In theory everyone can profit because exchange is voluntary and an instance of mismatched wants and values. When we say that governments choose winners and losers, we mean that. We can look at a faction that may favor green energy. Said faction comes into power and wants to promote its green agenda, and rather than preach to the people and ask them to go buy green products voluntarily, said faction may choose the green energy companies as winners, giving them subsidies, grants, and government contracts. The money to do these things doesn't come out of thin air (and if it does that makes inflation). It comes out of taxes. Who pays taxes? Everyone, or maybe specific groups if the tax is designed to be specific. So what happens after the green company gets all these things? Do they then give some products to all tax-payers? Nope. They just put their stuff on the market, and so tax-payers who do want that stuff are paying twice for the good, and those who don't want it are paying for it once anyway. Some justice government can do.

But government can't help but pick winners and losers. It can be as vague as mandating all medical practices move to a new software system, or it can be as specific as what happened in my town: They banned food carts and cited protectionism as the reason. Everything a government does is going to hurt someone, but that shouldn't be any surprise to someone who's read the dictionary. Government is a noun, meaning the monopoly of force over a geographical area. By its very definition, government is anti-market, and by extension it wrecks the incentives the market naturally has. Not only do we see instances of rent seeking (where companies find it more profitable to lobby government than compete on the market), we have mixed signals such as the minimum wage forcing the least skilled out of work because they can't compete at that level. Even its mere existance is a drain as most companies are small or large with nothing in between. The small ones aren't always subject to certain regulations, where as larger ones must pay exorbitant compliance costs in administration to not be knocked over by the long arm of the law. Government has stratified the "market", and made things really scary.

Therefore you shouldn't fear the market because everyone will be inclined to behave within the market. You should fear the archons because then everyone will be inclined to behave for the archons.