An evil doppelganger often confused with free market economies is mercantilism, a genuine planned system in free market clothes that provides benefits to those with political and government connection and authority. Kings, bureaucrats and those who hold their favor translate national pride and jingoism into a feast upon the consumers of their realms through protective tariffs, cost of entry prohibitions via registrations and licensing, and wealth redistribution via unearned subsidies given to poorly managed businesses incapable of competing on their own.
Examples of these corrupt mercantilist programs are the wheat boards of Australia and Canada. Canadian wheat prices, set by the wheat board, are artificially high under the current government monopoly (Going with the grain, 2007). In recent months the Australian Prime Minister stripped the wheat board of its power after unveiling a bribery scandal (Going with the grain, 2007).
The argument by many is that free markets breed the ills of mercantilism because the businesses corrupt the honorable statesmen. They argue that tighter governmental controls and regulations, ultimately socialization, would cure this unseemly and unethical social disease. These same individuals discuss the social inequality inherent within a free market society, demanding a solution from the free market proponents.
One example often cited is the island nation of Cuba. Fidel Castro’s “workers’ paradise” is the gleaming emblem of modern utopia for socialists and Marxists. Cuba, they say, has a statistically lower infant mortality rate and higher literacy rate than Canada or the United States (Benson, 2006). What isn’t mentioned is that, according to the Miami Herald, Cuba also has a higher incidence of abortion than either (Dorschner, 2007) possibly contributing to fewer unhealthy or unwanted births. Also absent from the discussion is the fact that the only literature available to those “literate” masses is state sponsored and approved reading material, so they are far from “educated.” Benson states elsewhere that Cuba has a low patient-to-doctor ratio and “no homelessness” (2006). Typical of his ilk he ignores the fact that low patient-to-doctor ratios do not mean greater health. Neglected from the conversation as well is the fact that there are no homeowners in Cuba as all property is in the possession of the state.
The common pitfall unseen by advocates of socialist or planned economies is the redistribution of earnings. If, by the sweat of his brow, a person earns more than is subjectively deemed “fair” the state relieves him of that burden in order to provide for those incapable and often unwilling to support themselves. With this being the result of continued labor, the will to work diminishes and can even vanish if the burden of carrying the weight of the world grows too difficult.
However, even the above deconstruction avoids the heart of the question: what is the value of labor and to whom does it belong? If A offers to exchange time spent at labor for B’s land, meat or gold is A entitled to B’s later profit from that labor? By that same token, is B then entitled to A’s later profit from his investment or sale of that land, meat or gold? Obviously not in the latter, so why should it be in the former? Is C, then, who was not party to the agreement, entitled to A or B’s profits? To ask the question is to answer it. So it is with taxation; who, other than some “divine” power would have the capacity to claim either’s income prior laying a finger upon those earnings?
The free market is not a perfect system. The difference between the free market and a planned economy is that the successful participants in the free market system have no illusions of utopia where scarcity is a thing of the past and humanity’s naturally competitive tendencies, apparent from the first nursery visit, vanish like sweet Coca-Cola carbonation. Instead, the proponent of a free market advances the cause that through thoughtful work and the employment of one’s mental as well as physical strength, an individual can rise above the level of simple subsistence thanks to shedding the shackles of state and societal subservience.
REFERENCES
Benson, J. (2006). No need for capitalism; Nation’s planned economy has brought the small island immense prosperity, literacy and health care. Toronto Star, August 7, 2006, p. A17. Retrieved March 31, 2007 from ProQuest.
Dorschner, J. (2007). Infant mortality rate in Cuba raises eyebrows: Cuba is known to have one of the lowest infant mortality rates in the world, but the issue is how Cuba goes about keeping its death rate among babies down. Knight Ridder Tribune Business News, January 28, 2007, p. 1. Retrieved March 31, 2007 from ProQuest.
The Americas: Going with the grain; The Canadian Wheat Board (2007). The Economist, January 11, 2007. Retrieved March 31, 2007 from ProQuest.
Taylor, Bill (2007). Adam Smith in the context of human nature. The Herald, March 24, 2007, p. 16. Retrieved March 31, 2007 from ProQuest
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