I am a hardcore defender of free market capitalism.  And this isn’t an article saying that I believe in free markets except for this one particular area.

I frequently hear people say things like the following:

“I am all for the free market, but we need some government regulation.”

“I am all for the free market, but we can’t just have the poor dying on the streets.”

“I am all for the free market, but we have to have fair trade with China.”

Perhaps I am intertwining the terms “free market” and capitalism”, but generally speaking I am just referring to a lack of government interference in the marketplace beyond upholding property rights and contracts.

I even believe in the free market when it comes to money.  We certainly don’t need a Federal Reserve or any kind of central bank.  We don’t even need the government to issue a gold-backed currency.  The marketplace can figure out the best form of money (or moneys).

With that said, there is a downside to free market capitalism.  It produces a massive amount of wealth over time and people get to enjoy great prosperity.  By itself, this is a wonderful thing.  So what’s the problem?

The State as a Leach

If we could maintain a libertarian society with a very minimal state, there is no problem.  The problem is when we get away from liberty.

We end up with a tyrannical government that feeds off of the prosperity that came from free market capitalism.  And if there is still some semblance of the free market, wealth is still produced, even if at a slower pace.  It continues to feed the beast.

The United States over the last century is the perfect example of everything right with free market capitalism, along with everything that is wrong with it.

The American people have enjoyed prosperity and a level of wealth that would have been unimaginable a century ago.  We are walking around with handheld computers in our pockets.  We walk onto an airplane and fly across the country in a few hours.  We press a button in our house to make it hotter or colder.  The list could go on forever.

With that, the state at all levels, but particularly the national level, has taken a cut of this wealth and has used it to do great damage.

There would be no nuclear weapons without the great wealth that came before their development.  There would be no drone strikes in Syria or bombers flying over Iraq if it hadn’t been for our prosperity.  We wouldn’t have a national security state capable of spying on every American if the technology and wealth didn’t exist.

In some ways, free market capitalism has helped fund its own demise.  The whole thing seems like a giant contradiction, and it almost hurts your brain to think about it.

The U.S. government is spending over $6 trillion per year because of our vast wealth.  This spending is mostly destructive (to varying degrees), and it enables the state to make us less free.

If free market capitalism were simply being used by the state to make us less wealthy, then it wouldn’t be such a big problem.  We could accept that we are still better off with it because we are far wealthier than not having a somewhat free market.  The problem is that the government isn’t just taking our wealth and making us poorer.  It is using our wealth against us to repress us and sometimes to even kill people.

The Alternatives

My critique of free market capitalism isn’t really a critique of the free market but moving away from the free market.  The problem here is that you have to maintain a minimal state with all of the new wealth and prosperity.  There is the problem that people with a lot of wealth have a lot of extra time on their hands to act as tyrants.  The wealth generated from the free market funds the very people who would do away with the free market.

The fact that we have had a relative free market makes the chances of the world being blown up by nuclear weapons greater than it would have been.

With that said, I will never not favor free market capitalism for this or any other reason.  If we don’t have some semblance of the free market, what is the alternative?  We could have state control from a state that is relatively poor, but we would all be living in poverty.

We take risks in life every day.  Although the lockdowns in 2020 seemed to indicate that people did want to live in a safety bubble, there is a reason the lockdowns didn’t last.  Even if you thought it was a really dangerous and deadly virus, at some point you want to live life, even with the risks.

If someone offered you a lifestyle of poverty but could guarantee that you live until at least the age of 80, would you take it?  I don’t think most people would.  We would rather take some risks and live a fulfilling life.

I will take the risk of free market capitalism funding a tyrannical state that can and will be used against us.

Of course, there is always the possibility of having free market capitalism and keeping the state in check or not having a state at all.  This requires educating others on the benefits and morality of liberty and not relying on the state.

It is possible to have great wealth and prosperity without using it to fund a giant tyrannical state apparatus.  I think this will be the ultimate achievement of the human race if we can get to a point of great wealth while maintaining peace.