October 5, 2012

Zeitgeist vs. Austrians - The (Un)Holy Market

Been a while since I brought up the mechanics between Austrian economists and those that support a resource based economy. Proceeding with matters that often come up with discussions between the two parties. One very peculiar matter, in my opinion, is that an Austrian economist will often say; 'This is not the free market.' Meaning the world that you see today is not an accurate reflection of what capitalism ought to be. It's understandable up to some point yet in a broader scope it's a philosophical act of sticking your head in the sand.

'This is not the free market' refers to government interference in the market place. Austrian economists blame the State for the shortcomings of the market. By regulating and protecting/privileging certain businesses an unfair market is created. This is also called 'crony capitalism' by a number of people. In essence Austrian economists are purists. They want no interference in the market place whatsoever and that the system itself creates an equilibrium over time. The assumption is also made that a pure free market works best and will provide for everyone (in various degrees).

While I can see that State interference in some sectors can be deemed unfair, from my perspective an arbiter is absolutely necessary. Lets not forget that the free market is a competition, a survival of the fittest. Letting a competition be fought out with no holds barred will come at a tremendous human cost, and honestly you can't expect everyone to behave and play according to the rules when the bottom line is money, commodities and profit. Corruption will creep in.

People will also have to submit to this system and while the word 'free' and 'freedom' is used quite often but you're only as free as your purchasing power will allow. Those dollar bills in your hand, that is freedom. And when you think about it, it is diametrically opposed to what those words really stand for. The more bills in your hand, the more freedom. Less or no bills, time to roll over and die because there wont be a State to help you out.

Austrian economists are also fond of using the word 'voluntarism' as if there are no controlling mechanisms. If you have no money, then you have to seek a job and acquire money that gives you access to the necessities of life. What's voluntary here? Can you go without money? No! You have to submit to the system. Money simply becomes another tool of control and enslavement yet this isn't in the Austrian lexicon.

While I don't want to see big government I realize that there must be regulation. Otherwise the market will implode under the weight of its own greed.  Lets not forget that a State is there for the wellbeing of its people. A corporation, which will be the dominant institution in a pure free market, is there to make a profit for its private owners. Yet lets take an honest, deep look at 'crony capitalism.'

Who influences the State? Who lobbies the State for favors? Right, corporations! So corporations try to influence matters and seek an advantage and what do Austrian economists do? They blame the State for handing out privileges and not the corrupt corporations who bribe the former! Yet in a pure free market this kind of corporate corruption wont happen? And they call Zeitgeisters utopianists! An Austrian economy apparently requires some serious mental gymnastics.

What you have today with "crony capitalism" and I take the phrase with a grain of salt, is simply a 'natural' evolution of the free market. Yes, the State can be influenced by big corporations and this is what you see especially in the U.S. Why does this happen? It's inherent to capitalism. If you have acquired a lot of wealth, money and property. If you run a big corporation, you'll simply try to protect your advantage that you have over others. And if that means lobbying the State which is allowed by the market than it's in your self interest to do that.

Why do Austrian economists want a pure free market? It's in their self interest. Why does the 1% try to control and influence the State? It's in their self interest. What's basically the difference between Austrian economics and the 1%?

Maybe it's time to start thinking about what really matters. In my opinion Austrian economists simply seek the freedom to manipulate everything else and there enemy isn't so much the State, it's those capitalists that beat them to the punch. The market isn't holy. Human life is.

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