The Inevitable Unfairness of the Free Market

I just finished reading Milton Friedman’s book Free to Choose: a plea for the free market. Friedman has some compelling claims against government intervention in economic transactions. Price is – as he claims – the most informative entity there is in communicating individuals’ demand and supply of goods and services, and, in a capitalistic society at least, provides people with the incentive to utilize this information, thereby satisfying the needs of those that demand the goods/services. Furthermore, by acting upon the information, individuals provide themselves with the resources required to live a decent life. But although the free market – as Friedman describes it – seems a beautifully simple and elegant construct, there are some ‘side-effects’ of the system that might run against our intuitions about the notion of fairness.

It seems clear that the free market is the most efficient medium there is for maximizing the value of each of the individuals involved. And that (the ‘maximizing of value of each person involved’) is, according to libertarians, what makes the free market a fair system. After all, if you want to sell a computer, and another person is prepared to pay you the price you charge, then it’s only fair to let this deal take place, isn’t it? There is mutual consent between the parties involved, so what – if anything – could give a third party the right to intervene in this seemingly flawless transaction?

While there indeed might be nothing wrong with the free-market mechanism from the perspective of exchanging value, it might be doubted whether it is fair to make this mechanism the only mechanism for exchanging value. For while it’s no problem – and might even be beneficial – for those parties in a free market that possess the means to participate in the ‘game’ of exchanging value, it might be harder for those that – by nature or environment – have been unfortunate in acquiring the means required for satisfying their needs.

Because what if you’re not as intelligent as the average person, therefore getting a relatively low-income job, such as being a plumber, because of which you are unable to satisfy your needs to the same degree as – let’s say – a banker or lawyer? Of course, a libertarian might say, the plumber can still participate in the free market, just like the banker or lawyer can. But, even though the three parties might have the same needs (for luxury or otherwise), the plumber cannot satisfy as many of his as the banker and the lawyer can of theirs: only because nature happened to endow him – in contrast to the banker and lawyer – with capabilities that apparently are less appreciated (since less demanded) in society. So the question is: is it fair to let nature – and thus chance – play such a drastic role in the ability of any person to satisfy his needs?

A libertarian can answer this question in either of two ways. Either he admits that the extent in which we’re able to satisfy our needs is indeed – in principle – determined by nature’s authority over our capabilities, or he must come up with an ingenious invention for how to solve this negative side-effect of the free market without thereby endangering the libertarian heart of his plan. The first option, although this appears to be mostly ignored by libertarians, seems to imply a notion of ‘fairness’ that I – and I assume many others – find highly questionable. On the other hand, it at least is a notion, and – given that this truly is the libertarian’s view of a fair world – should be accepted for what it is.

The latter option – on the other hand – provides more room for discussion. Because how – if ever – could it be possible to solve nature’s capability-casino by means of a libertarian solution? There are of course many plans one could come up with, all of them mitigating the negative effects, but all of them being either (1) in conflict with the libertarian aspiration of a free market or (2) don’t get down to the root of the problem (that is, the unequal distribution of capabilities over mankind). It seems fair to say that (2) is a kind of unfairness that is inextinguishable – not by socialism nor by libertarianism. We after all cannot redesign our beings in order to endow everyone with the same capabilities. And even if we could do so, it’s high questionable whether this choice would be beneficial to society as a whole. So it seems we’re stuck with (1), pointing us to the possibly unfair consequences of the free market.

The above reflection shows that there seems to be an intuitively unfair side-effect of the free market; a side-effect that is unsolvable by means of the free market-paradigm itself. It either requires us to adopt the libertarian notion of ‘fairness’, or requires some sort of (government) intervention in order to compensate for nature’s ‘unfair’ distribution of capabilities.

What do you think?

Addiction: A Purpose in a Purposeless World

Addiction is “the continued use of a mood altering substance or behavior despite adverse dependency consequences”. In this article I want to zoom into the meaning of the word “adverse” as it appears in this definition of addiction. Because what is “adverse”? Is it adverse when you are ruining your liver? As what people are allegedly doing by drinking. Or is it adverse when you are ruining your lungs? As what people are allegedly doing by smoking. Is it adverse to be a pervert? As is allegedly the case for those who are “sex addicts”. What is “adversity”? Let’s take a look at that.

Before being able to know what adversity implies, we need to know relative to what an an act will be adverse. After all, the same action can be benficial or adverse, depending upon the purpose one had with the action. So let’s take the most absract purpose one could have, and apply it to you: what’s the purpose of your life? Do you want to become an astronaut? If so, then you know what to do: study the universe, apply to NASA and hope for the best. Do you want to become a professional football player? If so, then you know what to do: train like hell and hope you will get through the selection process. So far so good. But what if you don’t know what to do? What if not every cell in your body pulls you into the direction of your dreams? What if your mind isn’t occupied all day by thoughts of you playing in a full stadium, with supporters chanting your name for the entire match? Then you’ve got a problem, right? Because your mind isn’t going to rest; it will keep on pulling and pulling without knowing where to pull to. So how are you going to to stop this? How are you – if you don’t have a clear purpose in life – make sure your mind doesn’t keep on reminding you of the purposeless of your existence?

Well, maybe you could just decide to find out what’s your purpose in life? Figure out what you want to do, where you heart lies etc. etc. But let’s be fair: that’s easier said than done, isn’t it? I don’t know if you ever sat down one afternoon and through deeply about what is “your purpose in life”; if you did, you might have experienced that finding your life’s purpose isn’t like a Sudoku-puzzle: the answer is not written on the backside of the paper. So what to do now? How to keep your mind and body occupied without having that all-encompassing purpose leading the way?

You could start smoking, or drinking, or even better: you could start using cocaine or heroine. Because one thing is for sure: although these goods might not be “healthy” – in the sense of being beneficial to your body – they sure as hell provide you with a purpose in life. A purpose to make money in order to buy cigarettes, a purpose to run to the liquor store in order to grab that booze, and a purpose to rob the old lady on the street in order to get some cash so that you can buy your drugs. It’s just another way to keep your mind occupied, right?

Let’s be fair people: the is no “Purpose” (with a capital “p”) in life, right? There is no single goal each one of use should strive for. There is no single benchmark along which to measure your degree of success in life. So we should be damn happy if we find something that we find worthwhile to do, right? Because we have to do something. We cannot do nothing. Everyone needs a purpose. But some of us have been more “lucky” in finding our purpose than others. Some of us might know by heart what they’re “destined to do”, while others are just wandering around, answering their need for a purpose by laying their hands on drugs and booze; all to silence the mind and have – consciously or not – a purpose in life.

So let’s be mild, shall we? Let’s not condemn the addicts of this world for the “purposeless” lives they’re seeming to live. It’s bad enough for them that they don’t have a purpose; that they’re trying to fill the gap of purposelessness with other – “lesser” – means. Let’s just be happy for our purposes in life and fulfill them with flair.

Don’t you think so?