Free Market Revelations

Article written in 2015
With the forthcoming election nearing ever closer I am still struggling to connect with one party but I feel that it is a duty of mine to vote (I suspect that this is not from some innate understanding of morality but rather derives from being a child of a statist society).

A couple of weeks ago after watching Sunday Politics on the BBC, I felt that I had made a decision between the two main parties and momentarily felt rather relieved. I turned to my boyfriend and said: ‘I think I’m going to vote Labour’. I thought Labour would be the best choice, as I couldn’t see why reducing the deficit should be of paramount importance when government could be concentrating its efforts on supporting vulnerable citizens. That is how I came to my conclusion. The End.

But to my shock my boyfriend responded rather bluntly with; ‘Elle*, if you don’t understand basic economics then you aren’t entitled to an opinion’. For a moment I thought, ‘How rude!’ I have a first class degree in sociology don’t you know! I’m more than entitled to an opinion. But then I considered his point more and it dawned on me that through all the discussions and debates I had had with friends and family, through all the essays I had written as a student and through all the seminars I had eagerly taken part in, I had absolutely no economic knowledge to support my ideas and what is worse is that I didn’t think it was necessary to.

I decided that I would start reading a book that a friend had sent me: Economics in One Lesson (Hazlitt, 1946). The book introduced me to a foreign concept – the free market. It is not as though I had never heard of the free market before but there’s a difference between being aware of an idea and actually understanding it. I know that quantum mechanics exists but asking me to explain it would be like asking a man what it’s like to push a human baby out of a vagina. Even though I had no idea how the free market works I had an inclination that it was in partnership with an exploitative, even evil, capitalist system. I assumed that was all I needed to know as no one had ever questioned my political views from an economic perspective (except for one friend who attended boarding school and graduated from Durham University, whom I just assumed didn’t understand the angst of the poor which is why he believed in a free market).

After the first couple of chapters of the book I began to understand how a free market economy functions. I thought I would find major ethical holes in Hazlitt’s arguments and find reasons to say why this sort of economy is unrealistic. Instead it all made so much sense to me. A truly free market seems so logical and obvious! I previously thought that if the government didn’t subsidise dying industries then people would lose their jobs and this would be bad for everyone because they wouldn’t have an income to support other businesses. What I failed to realise is that subsides come from tax revenue, which means that everyone is left with less in their pocket. Furthermore it never occurred to me that in a free market economy the demise of one industry would result in the creation of a new industry. This is just one example of how efficient the free market is.

I began to realise that people who don’t want the government to spend so much money are not cold-hearted people who don’t care about the underprivileged, but rather advocates of the free market think that if the state stopped spending so much money everyone, including the poorest in society, would be more prosperous.

Two weeks ago I knew nothing about economics and thought if I cared about humanity I should vote Labour. Now, although I am far from an expert in economics, I feel that I understand the arguments for and against the free market and I am more than comfortable with the idea of such an economy. This in turn has left me less convinced of arguments for government spending. I am no closer to knowing who will get my vote, or even if I will vote. What I can confirm however is that I no longer think Labour have the answers I’m searching for.

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