Wednesday, May 13, 2009


Morgan writes: "According to the above mentioned talk show hosts, and many politicians, a free market has been defined as any market without government intervention, or even more dubiously, 'minimal' government intervention.

Many years ago I found myself in full dress military uniform, my ruck sack on my back, in a back alley off of 42nd street in New York City. I was cornered by 10-12 young men who essentially offered me my life for my money. According to the above definition, I was enjoying the fruits of a free market! There was no government intervention. Perfect!

I would not agree with the argument that being accosted by predatory criminals is a characteristic of a free market. The protection of individual rights is not a form of government intervention. In my view, that is the government's only proper purpose.

Also, it is my view that any market that is not governed by a rule of law that protects individual rights is free. Establishing an unregulated, laissez-faire (free) market with a strict governing rule of objective law, not men, within a framework of limited government that protects individual rights and economic liberty is not interventionism, it is capitalism.

I agree with George Reisman that, "interventionism is any act of government that both represents the initiation of physical force and, at the same time, stops short of imposing an all-round socialist economic system, in which production takes place entirely, or at least characteristically, at the initiative of the government."
Morgan writes: "From this we can safely conclude, knowing nothing else about the situation, that it [Haliburton no bids] was not a free market, there was no competition.

That does not necessarily mean that no competition existed, but that competition, if it existed, was barred by the buyer (government) in contravention of public will. The fact that this was the government (public money) excluding competition makes the difference. This sets up a coercive and involuntary arrangement between the buyer (government) and the owner (me).

In the private sector, competition can be excluded within a free market framework because, in such a case, my private economic liberty and voluntary choices are preserved. Private individuals exclude competition all the time. For example, you might hire your cousin for a plumbing job, denying a bid from a professional. I might have my car fixed under a shade tree. Or Hooters Restaurant might discriminate against men; and rightly so. These are choices voluntarily made using private resources (money, property) and the buyer takes a freely chosen risk in a competitive environment.

In a free, uncoerced and open market, I cannot be forced to open bids to competition. That would be a violation of my individual right to use and dispose of my private property as I see fit. In the public sector, however, as with the Haliburton example, the public was forced to exclude competition against its will, thus making that action a violation of my individual rights.

You had stated that, "an example of a 'minimal government intervention' would be the $100 billion no-bid contracts given to Cheney's buddies at Halliburton."

While I agree that this is indeed an example of an unfree market, it is not an example of a lack of government intervention; or hands-off. To the contrary, this is an example of government intervention in what should be a free market of open bids using our money. It is unfree precisely because of heavy government intervention.