As the Columbus municipal elections approach and campaigns heat up on state and national levels, I am noticing more candidates and pundits espousing the “free market” solution to what ails our society and economy.
I want to make it very clear that I spent most of my career in the private enterprise segment and I have a very high regard for the power of the marketplace. But when I hear people throwing that out as the solution of most problems, I take pause.
The effective governance of any free society demands a balance of marketplace solutions and governmental solutions. And, yes, the marketplace can be more efficient at times, and more ineffective. And the government can be more inefficient, but more effective at times. Neither side as the corner on perfection.
I want to give a few examples I have run across to counter the free market thinkers. As I was listening to an interview on the drought in California, the speaker (a Libertarian) said to just let the market take care of it. Meaning to let the price of water be uncontrolled by the government, so that it rises to a point of lowered demand. Sounds simple and effective, especially for rich people.
Here is how I would see that working. Uncontrolled water bills could go from $100 a month to $500 a month for normal usage. To many poor or even middle class people, this would be disastrous, even with trying to cut back. After all, you can only cut back so far on washing, drinking, cooking, laundry and other water usage.
But, of course, that increase is nothing to wealthy Californians. They would still have their green lawns, their full swimming pools, their lush golf courses, etc.
That increase is a drop in the bucket to them, so to speak. Free market solutions tend to not work on rich people.
My second example is the recent situation in Indiana with the law to protect religious freedom. It is easy to just say “let the market take care of it.” Meaning that if a gay person cannot get a certain service because of someone’s religious beliefs, let them take their business elsewhere.
That sounds good, until you apply that to the agonizing situation with our most prominent inequality issues. African-Americans were freed in 1865, and it took until 1965 for our nation to see the need to pass the civil rights legislation.
What happened to the free market in those 100 years? Where was the fix? In many places, “go somewhere else with your business” was not an option.
The same with women’s rights. It took government intervention to cure the dysfunction of the “free market.” And all that is still not over.
A more personal and local example is the story of Cummins’ approach to the cleaning up of the air pollution caused by diesel emissions.
I was at Cummins back when the EPA began imposing new and very stringent rules about particulates and smoke, and other pollution from the engines of on highway trucks. Cummins wisely did not fight but welcomed this legislation.
Competitors did not think the government had any business in this manufacturing issue.
But, the demands of the customers never would have asked for “clean engines.” They wanted power, lower fuel usage and low cost. No one was asking for clean engines.
For Cummins to start the very expensive process of cleaning up emissions, it needed an intervention from the government, not the marketplace. This is a case where the free market works against clean air. It is cheaper to pollute, simple as that, and to invest in emission controls on their own would make any manufacturer uncompetitive. This is true across all air pollution industries.
I hope no one is thinking I am demanding more government, but only the balance between government and markets. Things that affect the broader human society typically do not work in the power of the free market. That power is individual economic well-being, based on some rationally thinking beings. But that is lacking when it comes to the greater good.
Most of us humans do not view the world from what is best for the whole, rather it’s what is best for me. We look at me first. And that personal “best for me” thinking does have many positive effects, but at times it needs to be balanced by people looking out for the greater good.
I do not trust anyone who comes down on only one side of this equation. Both sides have their strengths, and both sides have weaknesses. It is recognizing the differences that are crucial to good governance and making the best choices for society.
Columbus retiree Tom Lane served as a consultant to a number of companies in his career. In recent years his has been a familiar name to readers of The Republic’s letters to the editor. He can be reached at [email protected].