Less than thirty years ago, much of the world was divided into two power blocs who were diametrically opposed to each other in both ideological and economic terms. On one side, the communist governance and command economy of the USSR, her satellites, and allies. On the other the neo-liberal economics, and the democratic politics of the United States, and the Western world. In the contemporary age, it is the free market economy that reins supreme; the Soviet Empire, having been a super power that counterbalanced the United States, went in to precipitous decline in the 1980s and then fell apart by the very early 1990s, and China, following the death of Mao Tse-tung adopted economic reform in the early 1980s.
Currently, it has usurped Japan as the second largest economy on the planet, and is predicted to overtake the United States by the middle of this decade. The personal income and livelihood of the general populace has also apparently progressed with this system, the unprecedented post war boom in the west improved the lives of a great deal of people, and China today has a burgeoning middle class in excess of 300 million people. Consequently, it appears at first glance, that such a system is of immense benefit to the lives of those who are part of it, but does this mean that the free market is ‘free’ or is it in fact the opposite? Is it a system that genuinely provides unparalleled economic and indeed personal freedom? Or is it a facade, that provides only an illusory freedom to all of us?
Some, like academic Francis Fukuyama would invariably answer yes to this question. One of the central tenets of his thesis, The End of History and the Last Man, is that free market capitalism is indeed free, and that such a system often leads to liberalisation in the political sense, although admittedly not always. And indeed, he is right to some degree. He correctly points out that the free market does provide us with a much greater choice of what to buy and sell, where to be educated, and what to be educated in, unlike the socialist economies where choice was heavily curtailed. [1]
He does have a point, I might not agree completely with the free market, but the command economy that socialists advocated in the past, and still do, certainly isn’t. In planning an economy, you are automatically placing considerable restrictions on human behaviour. To levy such strict if not immutable controls is arguably anathema to freedom. Furthermore, as we humans posses at least some degree of free will, limiting ourselves by having a controlled economy would arguably inhibit people from realising their full creative potential. In a system where the state controls the means of production, entrepreneurial activities would not be possible. In essence, such a state of affairs prevents them from fully enjoying the fruits of their labour, and insults their intelligence by treating them like children.
Now, this should not be interpreted as a rallying cry for neo-liberalism. As I am about to argue, free market capitalism most certainly does not provide unbridled freedom of choice. As a rather obvious case in point, the cost of certain commodities prohibits certain people from buying them. For example, person A has 1 million pounds, person B has 20,000. Both are given a choice to buy one of two cars. The first costs 19,000 pounds, the other is £200,000. The most expensive will be more reliable, efficient, comfortable, and better to drive. Obviously person A could buy both, whereas person B could not. Or, for another example, the richer person could afford to go on holiday a lot more, whereas the other would spend more of his relative income on paying bills etc. To put it bluntly, the person who is richer has a greater freedom of choice, whereas his poorer counterpart can only purchase the less costly item, and can do less as his relative disposable income is smaller. In a nutshell, the greater your wealth, the greater your freedom.
The same can naturally be said for education too. Whilst Fukuyama argued, as I said earlier, that the free market expands the choice of education, this isn’t necessarily the case. Private schooling is in general of a very high standard; the student to staff ratio is smaller compared to state institutions, children are nurtured and encouraged to learn, and subsequently have better career prospects than their non private compatriots, which of course comes with a hefty price tag. In some state schools, perfectly bright children could lose out on the chance to get a decent education, and consequentially, better career prospects because their parents cannot afford to send them elsewhere. The fact that impoverished students have a smaller chance of attending such institutions, and therefore earning less, does profoundly show that for a system that drives humanity in the world today, that is regularly lauded for its benefits, doesn’t entirely live up to its name. The restrictions that I have so far outlined appear to underline this point.
http://www.youtube.com/watch?v=vZWJETpfbzM
To extend this notion into the wider world, one only has to look at how the free market system has led to gross violations of human rights, which is something that we are all complicit in. The computer I am writing this on and the device you are reading this on will invariably have been made in a factory in China or Taiwan. The clothes on our backs will have been sown in China, India, Pakistan, Bangladesh to name a few. All for minuscule wages. The people who work in these factories will be doing so as they have to feed their families. They will likely be unable to get another, better paid job, or educate themselves as their circumstances make such an opportunity impossible. And this is in a market that is supposed to be free. If anything, it shows that people can be chained in much the same way that a command economy can do so. The latter offers little to no choice. The former offers plenty of choice, but only if you can afford it. Again, choice boils down to one’s material wealth.
I must make a few concessions however. The examples I have just used are for countries that are currently developing in a certain sense. The citizens in Western states, Japan, and South Korea are as a whole, much better off than those in India and Pakistan for instance. We have better paid jobs, and whilst money is undeniably a problem for a great many people in the west, it is not to the same extent. The situation may well change for those in poverty, and again we return to Fukuyama who argues in the context of the economic booms in Asia that “Income distribution began to equalise rapidly one country after another once they reached a certain level of prosperity” [2] Nonetheless, this eventuality for the current developing economies is still theoretical, furthermore, it does not eliminate the profound inequalities that the free market perpetuates, as I have discussed in detail, people with money can buy better, those without cannot.
Nonetheless the free market system is the only thing we have at the moment that is viable. It suffers from recessions, and there are winners and losers. But a return to a socialist style system is not an adequate option. The collapse of this system in the early 1990s is evidence enough of this. Something different may well be needed if we want true economic freedom. Or maybe a few adjustments need to be made. In any case, the unparalleled freedom that the free market apparently provides does not appear to be entirely so, it is arguably a tad illusory.
[1][2] Fukuyama, F. (1992) The End of History and the Last Man, London: Penguin.
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