2008-06-12

The price of (market) freedom is eternal vigilance

My friend Dave sent me an article and asked:
Tony - how do you as a fan of the free market address this issue - bankrupting farmer seems to be a structure consequence of your favoured global free markets?...Dave
Dave went on to give his view:
Basically the green revolution has bankrupted all the rice farmers in Thailand, and I guess the same pattern is repeated worldwide.

Much as the banks have bankrupted middle class people in the West, capitalism has done the same for poor farmers throughout the world, whereas they feed most people and are the most productive.

In Thailand, the fact that the middle men, the rice dealers and the millers are all chums with the politicians who allow them to bankrupt the rice farmers even while food prices are at an all time high, is openly discussed in the English newspapers in Thailand.

The same thing happens in the West but it is openly discussed.

Regarding agriculture, this seems to be an inevitable consequence of many indfidually weak farmers, who can be preyed about but a much smaller cartel of rice dealers.

The only way the Thai farmers have got the promise of a fair deal is to threaten to blockade all the major roads.

Dave
Free markets are a way to make a society as a whole richer. It doesn't mean that wealth will be distributed equally. If you want a more equal distribution of wealth, you have to tax rich people more, and give everyone a 'citizen's allowance'.

In Thailand the free market has worked, in that the country is getting richer. Richer doesn't mean happier of course. I could make more money if I had a second job stacking shelves in Tesco's, but I prefer to forgo the money and spend the time arguing with you, oh joy!

You talk about cartels of middle-men, but if these exist there isn't a fully free market. The government needs to improve regulation to break the cartels. You say that the politicians are unduly influenced by the middle-men. This is exactly what Adam Smith warns about in The Wealth of Nations. I'm afraid the only way round this is for individuals to campaign, unite, protest, denounce and vote! To paraphrase Jefferson; the price of (market) freedom is eternal vigilance.

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