The righteousness of the free market

What happened in Arizona? Powerful political interests sought to use the power of the state to interfere with same sex marriage. Then the power of the market, i.e. business interests, prevailed upon the authorities to retreat. A similar tdynamic was at work with civil rights. They had to make laws enshrining discrimination, else the free market would break it down. The market doesn’t really care about race or preference. It sees one color - the green of money.

We rightfully ridicule the fictional Wall Street character who tells us "greed is good." But remember in any film, the filmmaker controls all the parts. Oliver Stone wanted this to be ridiculed and so made it ridiculous, probably because he knew the that a variation has merit.

People looking after their own interests will not always be greedy. In fact, few people will absolutely maximize the money they can make. A man who opens a bakery is indeed motivated by profit, but he probably also likes to make bread, serve customers, nurture social relationships etc. The purpose of his business is not to make profit, but profit is required to make the business work. What does this have to do with civil rights? A lot.

A firm can stay in business only as long as it satisfies customers. Unless it is a very small town and nobody has a car, customers have options. A firm that annoys lots of people is at a disadvantage. This makes business owners more tolerant, since they want to appeal to a large number of people. Those who don't, suffer in competition from those who do.

Bigoted people want to get government involved to protect their prejudices. That is why in the old South communities made laws to segregate. They knew that absent the laws some businesses would begin to break the racial barrier and pretty soon more would be forced to do the same. A free market cannot long maintain baseless prejudice.

This is why the free market is righteous, at least if you believe in tolerance. I recall during the time of Apartheid in South Africa that the extreme parties feared and hated the free market, since they knew that given time it would break down the barriers. It does.

What we have seen in the gay rights movement is exactly this. It is the power of the market. In Arizona, money talked and the governor listened. Greed may not be good, but good things can come of it.

Posted by Christine & John at March 1, 2014 4:06 PM
Comments
Comment #376985

The free market has no morals. If prejudice and bigotry are more profitable, then the free market will work against the righteous ideal of tolerance. When the free market works to promote injustice, only the government can right those wrongs. This was the rationale behind Article II of the Civil Rights Act.

Posted by: Warren Porter at March 1, 2014 5:38 PM
Comment #376987

Warren

But in the long run or even the medium run prejudice and bigotry are not profitable. That is why they need the force of law and coercion to be maintained by government.

If government in the 1960s had merely removed the laws that perpetuated bigotry and enforced ordinary laws against coercion, I think we would be better off today. In other words, if government had undone what government had done and let thing run their course, we would be okay.

It is no coincidence that slavery, which existed from human pre-history suddenly began to disappear when a free market began to emerge after the 1770s. Even in the U.S., the more market oriented North got rid of slavery before the more traditional and less market oriented South.

Posted by: CJ at March 1, 2014 6:16 PM
Comment #376989
But in the long run or even the medium run prejudice and bigotry are not profitable. That is why they need the force of law and coercion to be maintained by government.

If government in the 1960s had merely removed the laws that perpetuated bigotry and enforced ordinary laws against coercion, I think we would be better off today. In other words, if government had undone what government had done and let thing run their course, we would be okay.

Discrimination has occurred many times without the benefit of government coercion. Why did The Heart of Atlanta Motel file a lawsuit to protect its right to refuse to serve nonwhite customers in 1964? They was no law that compelled them to do so. Look at the 1875 Civil Rights Cases, why did Stanley and Nichols refuse to serve nonwhites at their inn? Why did Ryan and Singleton refuse to serve nonwhites at their theater? Not only did these bigoted men discriminate against Blacks when they were not compelled to do so by the law, but they actually violated the law in order to exercise their prejudice.

Posted by: Warren Porter at March 1, 2014 6:40 PM
Comment #376990

Warren

Some would indeed discriminate. They would be the losers and others would take their places.

Posted by: CJ at March 1, 2014 6:47 PM
Comment #376991

100% right, Warren. The free market is only as free as federal regulations support. Just think back since the beginning of the recession as to the fines levied on the financial sector.

Posted by: roy ellis at March 1, 2014 7:56 PM
Comment #376992
Some would indeed discriminate. They would be the losers and others would take their places.

Not necessarily. What if White patrons boycotted integrated businesses? Then only the segregated businesses would be profitable.

Posted by: Warren Porter at March 1, 2014 8:41 PM
Comment #376993

Warren

They might for a while. But these things tend to crack.

The Irish were hated up and down the country. In South Carolina, during slavery, the owners would not use the slaves for the dangerous work. They hired the Irish. They got in the mainstream.

In the U.S., black incomes rose faster relative to whites form 1955-65 than they did over the next ten years. We were on the way. And the pathologies of the black community, such as the great number of out of wedlock births and the criminal under class grew up after 1965.

I support the 1964 legislation. I wish we had given it time to work instead of moving to the more racist interpretations that brought us affirmative action.

Posted by: CJ at March 1, 2014 8:49 PM
Comment #376996

Seems to me you are describing Fascism/Corporatism. When the government of we the people is so aligned with big business that big business has the last word the “free market” is not free it is under the control of corporations according to you C&J.

Posted by: j2t2 at March 2, 2014 9:10 AM
Comment #376997

J2t2

When government makes laws like that, it is indeed fascism or corporatism. It happens when government is too close to business AND when business is too close to government. The corruption can come from either direction and usually there is a multiple causality feedback loop at work. Crony capitalism and fascism is almost always initiated by government which finds willing partners in corrupted business until it gets hard to tell where one stops and the other starts.

We should distrust any concentration of power. Government and business have complementary roles, but they should not cross too much into the other sphere. It is actually very much akin to separation of church and state. Our freedom lies between the power centers. We should be able to use the power of government to counteract that of business and the power of business against the power of government. And for most of our welfare, we should rely on ourselves and individuals in free association.

Posted by: CJ at March 2, 2014 9:18 AM
Comment #378443

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