This article was written in response to Jack Werner’s opinion piece “Free yourself from free market mentality,” published on March 5.
By Greg Burr
President of TCNJ Student Liberty Front
Jack Werner’s recent opinion article in The Signal contends that libertarians have “seized the college campus.” To make his case, he creates a giant caricature that lacks nuance or even the most basic understanding of markets and market processes. He then proceeds to dismantle his own straw man and proclaim victory.
Werner contends that markets are harmful and should be abolished because standard supply and demand analysis relies on the assumption of perfect information. But this is akin to arguing that we should ignore physics because physicists often assume a perfect vacuum. In general, models are conceptual tools that allow for abstract understanding of complex systems. The test of the validity of the model is whether it explains and predicts the phenomena in question, not whether the assumptions hold in all circumstances.
Because Werner does not seem to understand markets and market models, he fails to recognize that markets solve a series of problems that range from difficult to impossible to solve using available alternatives. By generating prices, markets help us to decide what to produce, how to produce it, and how to allocate inputs like labor and materials across available alternatives. Markets are not perfect, but they do not need to be. They only need to be better than the available alternatives.
Since information is never perfect, the important question is whether markets are more efficient than other methods of allocation, such as central planning boards, autocratic control or democratic vote. If not allocation by market prices, then what? Looking back over the course of the 20th century, attempts to supplant markets with non-market mechanisms generally failed (e.g. the Soviet Union).
Werner’s article also condemns markets because Big Tobacco committed fraud and John D. Rockefeller made tons of money in the oil business. In condemning markets based on the behavior of cigarette companies, Werner conflates a defense of markets with a defense of corporations. Big Tobacco secretly changed the characteristics of a product to make it more addictive. Such actions are indefensible and should be condemned.
However, indefensible behavior is not unique to markets. Arguing that markets are harmful because Big Tobacco defrauded smokers is like arguing that government is bad because Joseph Stalin killed 20 million people. Neither markets, nor any other mechanism, will eradicate evil in the world.
The argument Werner offers against John D. Rockefeller is similarly unconvincing. Werner concedes that Rockefeller (and Standard Oil) raised oil output and lowered oil prices, but then contends that the lower prices and higher outputs were associated with “market and social cost(s).” However, he fails to specify exactly what these costs are and why they exceed the benefits of the lower prices and higher outputs.
Finally, in equating support for libertarians with support for George W. Bush, Werner shows that he clearly has no idea what the libertarian position actually entails. Libertarians opposed the Iraq war and the occupation of Afghanistan. Libertarians opposed the PATRIOT Act. Libertarians stood up against torture and executive spying. Libertarians opposed the trillion dollar increase in the federal budget during Bush’s two terms. Libertarians opposed irresponsible military spending. Libertarians stood with the left against the prison at Guantanamo Bay.
Today, libertarians have continued to stand against torture, against war, and in favor of civil liberties. By contrast, self-described Democrats have not been reliable proponents of civil liberty. One recent poll finds that 53 percent of liberal Democrats and 67 percent of moderate Democrats support keeping Guantanamo Bay open. No matter who sits in the White House, libertarians have remained principled in their stance for free markets and a free society.