Democracies and the Free Market


Recently, Tom Woods discussed an AlterNet article entitled, “11 Questions You Should Ask Libertarians to See If They’re Hypocrites”. The discussion revolved around ways to trick libertarians into “gotcha” moments by asking whether or not certain given items were examples of spontaneous order. One example of spontaneous order was a democracy. Tom, in his usual form, handled the writer quite decisively.

Similarly, democracies have been used in the recent past as examples of the free market. Wherein, voters are equated with investors. Each vote denotes someone’s “capital” which in turn, gets “spent” on the candidate or law of your choice. Just like purchasing goods or investing in a project on the free market. The voter’s choices are reflected in the voting process by multiplying their collective capital. Hence, a democracy produces the “goods” or elected candidates or laws, that this collective capital was invested in.

This line of thought is extremely flawed, to say the least. It’s important to understand what a democracy is and what a free market is before we can make comparisons.

A democracy is a certain geographical location, defined by borders, in which the population of the territory decides by a 51% margin, how life will be for everyone. This decision is then enforced with the threat of incarceration or even death if someone decides differently and acts upon it. In some democracies, they simply need to voice a dissenting opinion to be punished. Easier said, a democracy is a “win-lose” system. If your candidate doesn’t win, you have to live by the other side’s choices.

On the other hand, a free market is the voluntary exchange between people and firms. Unlike a democracy, the free market is not based on coercion. A buyer doesn’t have to settle or be forced into buying a certain good (unlike Obamacare). Buyers can shop around, bidding on goods, until they are satisfied. Once the exchange is complete, both parties walk away satisfied and titles of ownership have been peacefully transferred. The seller now owns the buyer’s capital and the buyer now owns the seller’s goods. A “win-win” system. In a democracy, the voters can simply hold an election to take ownership of other people’s goods or capital. This is theft or legal plunder writ large.

Moreover, democracies are a form of the plantation system. If your candidate loses, you MUST do as the winning side says. Here, the role of masters and slaves can flip around with each election. Certainly, if an undesirable law is enacted the losers “have the right” to sue in the state’s courts in an attempt to escape the role of the slave. But how often do the masters rule against themselves on behalf of the slaves? In the free-market, a seller or producer cannot force buyers into entering into undesirable exchanges. No one is shopping or working at Walmart at the point of a gun. If Walmart doesn’t satisfy, another seller will. Walmart is not a master and those shoppers or employees are not slaves. Stop paying your taxes and you’ll find out who the master and slave is in a democracy.

I would hope, by now, the reader is getting the point. A democracy is anything but free. It is coercion and the threat of violence institutionalized. A democracy is certainly no example of a market, free or otherwise. A democracy is an example of a gang of thieves. Yes, they hold elections, people wave flags and wear MAGA hats, and citizens voluntarily go to the ballot box and then vote away someone else’s choices. A democracy is a tyranny diffused among the many, where the voters are the tyrants.

Many enemies of free-market capitalism will attempt to confuse the unwitting into thinking that there’s something inherently wrong with it. That, if unchecked, capitalists will roll right over all of us and we’ll be living hand to mouth. The truth is, their policies have given us these monolithic corporations in the first place. The large corporations absolutely detest the idea of a free market. They cannot allow some smaller upstart firm to compete with them. Thus, they get into bed with the state and regulate the competitor right out of the market. Those who have received the largesse of the corporations go on to explain to the population how evil free market capitalism is. Well, it works. How many of our friends and families believe in an unregulated market?

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