Free Market Capitalism|Could the Debate be Over?

While scrolling through Facebook on September 18th I found a post from Peter Joseph that just seemed to sum up the inherent flaw in the concept of a Free Market. This is not an uncommon example of one of the many contradictions contained within the market driven psychology of Capitalist ideology, it was however, as succinct an example as I’ve ever heard it put, given the complex nature of this subject. Let’s dive in to see if there is any truth to this claim shall we?


I am writing regarding the foundation of The State. I am confused on your views about how the state is an “outgrowth of the market.” I am a Ron Paul type libertarian and I see the state as a system of force/coercion and it seems to me (and the growing libertarian community) that reducing or even removing state power will stop the war violence and state oppression and open up free trade so more people can gain from the open market. It seems really random for you to equate a true free-market that is based on open competition without coercion>>to the “state” institution which is one huge system of force. The problem today is not capitalism. It is crony capitalism!

A few thoughts before Peter’s response:
This seemingly honest inquiry as to the correlation between agencies of force (the state) and the artifice of free choice (the market) is probably the last hurdle to overcome in the realization of just how truly indentured and dependent humanity has allowed itself to become. It is no easy task to awaken from a lifetime of deception and propaganda that is religiously reinforced by the systems of coercion at the levers of power on this planet. The Systems Theory approach is the most complete perspective one can assume in decoding the data that Peter is pointing out. It’s readily available information that needs only the critical thinking skills of deduction required for comprehension of the scientific world view. The reason (IMHO) this conversation never progresses into talk of true solutions is due to excess of ego and lack of imagination. It’s completely natural to assume that the fix for the matrix is in the advocacy of ones own ideology. The disconnect stems from a form of myopia that overlooks the causal mechanisms at play in the current and proposed new systems. What follows is Peters attempt to disabuse those who are truly looking to understand the root of aberrant problems in society as we know it.

Given I used to be a Ron Paul libertarian I think I have learned a lot from the libertarian mindset… and how naive and truncated it is when it comes to economic/social reality and the causality set in motion by the market itself.

The confusion you have is very simple to overcome… If you throw off the shackles of the biased, necessarily narrow-minded frame of reference inherent to your understanding of free-market theory and how it applies/extends in the real world.

As I explain in this video
Inside the Zeitgeist Revolution|Exclusive Interview with Peter Joseph
The state is nothing more, in its core framework, than
(1) a property protection/acquisition institution and
(2) a means of legal organization to assure all actors on the economic stage adhere to basic rules.

(1) When settlements occurred in early times, armed forces naturally existed to protect the tribe/village/town/city/country from “foreign” invaders who would threaten the material wealth of that settlement. Likewise, those armed forces would act necessarily in an “imperial” manner (offensively rather than defensively) if resources ran scarce in their settlements, motivating violence against other settlements.

Not pretty… but this is/was the nature of survival. Today, examples such as the Western invasion of Iraq for energy resources and geopolitical reinforcement for future assurance of resource security continue this obvious trend. Nearly all wars in history have an undercurrent around property and material gain.

(2) As far as a rule structure of market economics, it needs to be pointed out that all governments exist as they do; with the preferences and platforms they do – because of the presupposed economic basis of the society.

Feudalism’s legal structure was based around land relationships and a set social hierarchy; Mercantilism’s legal structure was based around royal/state power moving traders for their own purposes in near total regulation from the top down; Capitalism’s legal structure is based around property rights and organizing trade freedoms/limitations with a focus on open competition overall from the bottom up; Communism’s legal structure – as it existed – organized around general Marxist principles regarding ‘means of production’ control and other derived values/assumptions contrary to capitalism too complex to list here.

The disagreement you pose isolates the market’s theoretical behavior from the very manifestation/existence of state power itself and denies why the state is there at all.

The market is based around respect for property rights. If I don’t have property rights – you don’t have a market system. Since this respect most certainly does not come naturally (it isn’t positively reinforced) due to the scarcity encouraged, self interest-based, competitive and advantage seeking individuals and institutions “battling” to “earn a living” and ”gain profit”, the “state” forces a legal structure that says “all you people must adhere to this game board in your market dealings so we can assure some degree of fair play.”

Now, I will pause for a moment and ask you: How do you keep sanity in a “warring” mentality system based upon winners and losers; a system that prefers scarcity for increased profits; a system that prefers the cheapest possible labor and the highest possible prices; a system that has little incentive not to induce fraud to one degree or another- without a legal structure?

I have heard some argue that the legal arrangement could exist by private companies/lawyers and not the state. That’s interesting… but worthless. You can’t have private legal firms make up the rules and assume everyone will simply agree to those terms. There has to be a universal set of laws in a nation that force competing interests to adhere. So, one way or another, some kind of legal (or state) system with a mutually accepted (imposed) set of rules must be in order. Anything less is total insanity (I’m winking at you Anarcho-Capitalists!).

I also hear people speak of moral principles to self regulate the market, as though everyone would just “play nice” if they learned as such. This is crazy absurd since that value system is not structurally reinforced at all. Nothing in the market system promotes “fairness” since it is based on advantage. This assumption is just pointless moral relativism and 100% subjective.
So, if the free-market needs property rights to be respected (and it does), a larger order force must assure this… and from the market comes the state.

And what is the great flaw you ask? Simple: In the theory of true capitalism, the market is assumed to be able to mediate all decisions. One should be able to use money for any purpose and, in the context of Ayn Rand theory; a kind of “competitive self-regulation” will be the “invisible hand” of the money god to assure everything comes out in a balanced and optimized way – just as long as everyone is free to compete without coercion.

But wait…. Why can’t I buy coercion? If we accept that some kind of legal system of mutually accepted rules must exist to assure some sanity in the game – why can’t I use money to influence those rules?

Seems like a great means of competitive advantage and it is totally acceptable in the theory of a true free-market

So, how do you try and stop the “free-market” from hurting the “free-market”? You use laws. Can laws be changed by the free market? Yes.

(a)There is no possibility for a “free market” OR
(b) the market is totally free as it is and doing exactly what it is intended to do.

Either way you define it, there is no other permutation.

Libertarian economics simply can’t win. Money rules the world. I say we have the most free-market we ever will have… ever: The freedom to inhibit the freedom of others. There is no such thing as crony capitalism… there is only capitalism. Crony capitalism is a continuum fallacy.

Free Market = Need for Laws = State power = Corruptible State Power = Free Market! (or something like that…)

Peter Joseph on Understanding Truncated Free Market Thought

Peter Joseph on Structural Coertion/Violence

In all fairness I know this group of words won’t be enough to shake free the most entrenched forms of cognitive dissonance and confirmation bias. What I hope is that these words will at least allow you to pause and reflect on the simple intractable problem that arises from a society of people who chose to orient themselves around the central authority of the almighty dollar. There is not one study that has sought to measure the pros and cons of social organization with and without the use of currency. It’s a simple question of taxonomy. How do we measure whether the juice is worth the squeeze? It really just comes down to quantifying the problems derived from monetary acquisition and conversely those that would arise from a moneyless society. Whichever has fewer is the objective direction humanity should work towards. Especially since money is just a tool should we seek to upgrade the utility of its function. Barcodes alone, a simple and effective tracking and distribution tool, could easily serve as the economic calculation basis for developing an informed feedback system for goods and services. Peter discussed this in great detail in this lecture:Economic Calculation in a NLRBE. After all is said and done what still remains to be seen is whether or not we are willing to experience a world in greater alignment with the natural environment or a world as we have today. People will never give up their interests both personal and monetary until it is in their best interest to do so. As such it will take a tireless minority of those who choose to be on the right side of history. Those who will be able to look their offspring in the eyes and say that we did everything in our power to help our brothers and sisters awaken to the beautiful world of abundance just waiting for us to stop bickering over fictional pieces of paper or digital representations of value. It truly is a silly notion just like the idea that you could run out of inches for a construction job as it is to run out of money for any purpose at all. Let’s out create those would-be-status-quo-defenders by whatever imaginative means we can muster!
As you were.

Love iiixtheory | {imagineitintoexistance}




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