I can actually agree with your view on the "free market" for once!
What's your thought on having some kind of separation of business and state? It's not like businesses would never lobby the government to give them political favoritism again but at least the government could point and say, "We can't do that." like they can do now when a religious group wants to demonize and eliminate another group of heretics.
Well, I think we need the term "free market" eliminated, there's too much baggage and it was always a fantasy anyway. If, though, you're asking if a healthy market can exist, the answer is "yes, of course it can", but it would be controlled and have restrictions put on it. It only takes a few bad actors to be incredibly destructive, and if they're so successful they start to strangle the competition by virtue (I use the term loosely) of their sociopathic practices more businesses will face the Sophie's Choice of either joining them or dying (and possibly destroying the other good they were doing in the process).
There is no winning in that scenario. However, I think the whole thing skips over the real question: do we need an economy at all in the way we've traditionally envisioned it? I'd argue that our current economy is a fossil of a world that no longer actually exists.
We have two paths, as always, I love sci-fi for the premises it presents (something fantasy typically doesn't do as a genre, you know, because hacks like Stephanie Meyer and JK Rawling need to be billionaires instead), here's a free short story that illustrates our two paths, which one would you pick? Are we so very removed from the "good" world presented in the story? We've already basically invented Star Trek style replicators for some types of goods and it's literally causing a dystopia, which is ironic...
Anyway, the story is called "manna", here you are: http://marshallbrain.com/manna1.htm
A long rant, probably annoying coming up.
And here I thought you were implying that all those government privileges should be done away with! I'm assuming that you don't want a separation of business and state because then the state couldn't tell people with private property how to use their property.
I agree with Bastiat that it's only natural for the many to want to vote themselves privileges from the few when most of the few got their extreme wealth by taking from the many with government privileges in the first place. The many will say that if the the few can do it, so can we and they will vote themselves benefits too. Basically it will turn into communism. He called it legal plunder and the correct solution to this is that no one shall be allowed to legally plunder anyone else.
It's one thing for the government to act like ref in a sports game when they regulate to promote good sportsmanship and are fair and consistent with the rules for everyone, quite another if they were to add two yards on to every run by the Dallas Cowboys running back because Jerry Jones just built a new stadium and if the Cowboys lose the game their attendance might drop and that will cut into Jones' cost recovery from building the stadium. Also, half of the opposition's playbook is disallowed even though it follows the rules because they have hired athletes that will excel with that team's system while the Cowboys will have a hard time defending against it, and we can't have that because of cost recovery. That's how electricity regulation works.
We have two choices? Really? So it's simple dualism then, I guess. One side has a monopoly on good and one side has a monopoly on evil. I suppose religious people would have had two choices back when there was state religion. You could be Catholic or be a heretic. We get a separation of church and state by having an amendment that says people are free to seek any religion they want or even none at all without the state punishing their choice and now atheists, Christians (with it's many derivatives), deists, naturalists, Taoists, Buddhists, etc. all can tolerate each other.
I read to chapter 5 in the book you linked last night. This automation hysteria isn't new. It should have happened over 40 years ago already. I remember Rothbard complaining about it when he was complaining about intellectuals who favored state planning when they would change their intellectual fashions like ladies' hemlines, as he put it. There were seven positions over four decades that he listed, often contradictory.
1. 1930's, early 40's. Problem: Capitalism was suffering inevitable secular stagnation. No further inventions were possible and there would be permanent mass unemployment. Solution: State planning/socialism to replace free market capitalism.
2. 1950's. Finally there was a boom after deficit spending finally stopped. Not really a boom, just that consumption shrank with all that spending from the government and then consumption increased after they stopped the insane spending. Problem: Capitalism was growing, but wasn't growing fast enough. Solution: State planning to maximize rate of growth even if people didn't want to grow that fast.
3. Late 50's. The Affluent Society
was a best-seller. Problem: Capitalism had grown too much, no longer stagnant but everyone was too well off and people had lost their spirituality amidst supermarkets. Solution: State planning and tax consumers heavily to reduce their bloated affluence.
4. Early 60's. Problem: No longer too affluent, free market capitalism caused increasing poverty. Solution: State planning and tax the wealthy more than others. Here it is, automation
. I'll just copy here what he wrote. Mid 60's
5. Stagnation; deficient growth; overaffluence; overpoverty; the intellectual fashions changed like ladies' hemlines. Then, in 1964, the happily short-lived Ad Hoc Committee on the Triple Revolution issued its then-famous manifesto, which brought us and the liberal intellectuals full circle. For two or three frenetic years we were regaled with the idea that America's problem was not stagnation but the exact reverse: in a few short years all of America's production facilities would be automated and cybernated, incomes and production would be enormous and superabundant, but everyone would be automated out of a job. Once again, free-market capitalism would lead to permanent mass unemployment, which could only be remedied — you guessed it! — by massive State intervention or by outright socialism. For several years, in the mid-1960s, we thus suffered from what was justly named the "Automation Hysteria."
6. Automation Hysteria didn't materialize. He didn't put in a position here, just pointed that out.
7. Late 60's and early 70's. Affluence is once again excessive. Free market capitalism is growing much too fast. Problem: Free market capitalism is destroying resources (in the Tragedy of the Commons debate, the knock on capitalism is The Tragedy of the Anti-Commons, or that resources won't be used enough, much different than what the movies depict) and technology is an evil polluter. Capitalism's growth has also caused bad population growth. Solution: State planning to bring about a zero-growth society in order to avoid future negative growth.
As Schumpeter put it in a nutshell : "Capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear; the only success victorious defense can possibly produce is a change in the indictment."
How's this for a Sophie's Choice. Pretend you own private property in Germany before WWII. Fascists have taken power. Your choice is to be liquidated on one side under communism or on the other side under the fascists you can continue to appear to own private property so long as you only act for the state's interests. You will be regulated to comply and then penalized if you don't act in the state's interests, "Nothing outside the State". As one leader put it, they don't need to bother socializing banks or production, they socialize people. Well, I guess it's better than being liquidated.
I'll keep my "fairy tale" free market and my private property that helps ensure that transactions are voluntary and mutually beneficial. If the government wants to do something, they can be enablers of that, not top-down architects.