The Free Market as a Democratic Institution

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Let me preface
this by saying that democracy holds no mystical sway with me. Like
Lord Acton, I believe liberty is the highest political end. Nevertheless,
democracy is well regarded by great numbers of people. Among these
democrats and Democrats, often the free market is not so warmly
embraced. Few things are more democratic than the free market, and
so I find this lack of feeling for it by those who claim to support
democracy rather contradictory.

One may question
my conclusion that free markets are democratic. Fair enough, allow
me to explain. Dollars (or Euros or Pesos or what have you) are
votes. Each of us who has money engages in trade with markets of
some sort, and we vote with our Dollars for various products. Goods
and services that don't get enough votes disappear, whereas goods
and services that get large numbers of votes not only stay but tend
to become more pervasive.

There may be
complaints that this democratic free market is unfair, because some
have more votes than others. Perhaps, but the remedy, equalization
of incomes, is a totalitarian nightmare which is far more obviously
fundamentally undemocratic (or at least far more tyrannical). Nevertheless,
those with more income are simply getting more votes for what they
offer on the free market. If it is unfair, it is democratically

The problems
we see with the market as it is now are not, as is so often claimed,
results of unrestrained capitalism. Instead, cases such as Enron
and WorldCom and Arthur Anderson can invariably be traced to government
intervention. Regulatory agencies and elected officials making rules
and regulations about what can happen in the market, restrictions
upon the free market, allow these and other companies to get away
with things that an actual free market would prevent. Sometimes
these officials and agencies are acting on what they believe are
the best interests of the people at large and sometimes it's the
businesses that are expected to benefit, but that does not change
the fact that it is a political corruption of the democratic process
of the free market.

Left alone,
the market would police itself, as companies that engage in foolishness
would rapidly lose votes to other more competent companies seeking
those votes. But if a sufficient minority wanted to preserve a particular
good or service, they could do so, regardless of the majority opinion.
A democratic process that can not only serve the majority but also
fulfill the desires of the minority is a wondrous thing indeed.
In fact, it's rather a rare case that anything on the free market
earns votes from the majority, and to earn a majority of all the
votes would be impossible(except through coercive and undemocratic
taxation by the government, of course).

And so I ask
all good democrats and Democrats to please work toward the goal
of removing the corrupting influence of government from that most
democratic of all institutions, the free market. It is responsive
to minorities, it brings prosperity and the fulfillment of human
wants, and it is entirely based upon what individuals choose to
support. We should indeed work to spread the democratic institution
of the free market throughout the world.

9, 2002

Powell (send him mail)
is Vice-Chairman of the Oklahoma Libertarian Party. He lives in
Bethany with his wife and two children.

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