The imaginary ‘free market‘, itself a highly contradictory concept, and one that causes its proponents to ignore anything inconvenient to their worldview, has helpfully offered up another 23 examples of its followers either flat out contradicting themselves, or holding a clear double standard in two similar situations.
To clarify the first two: John Bates Clark originated the theory of marginal productivity, which holds that labourers are paid pretty much exactly what their labour is worth. Yet he also endorsed the notion that labour is worthless unless it was combined with capital, and that the division of labour allowed groups to produce more than they could individually. The latter two imply that you cannot separate a single labourer’s productivity from other factors.
1. The division of labour is an amazing phenomenon that allows groups of labourers to cooperate to produce more than they could if they worked alone. But each labourer has their own discernible marginal value product (which they are, obviously, paid because free market).
2. Labour has nothing without capital; that entrepreneurs combine their capital with labour justifies their profits and benefits both sides. But labour, on its own, has a discernible MVP (which…see above).
6. We were upgraded – proof that austerity works. We were downgraded – this is why we need more austerity.
7. Sin taxes don’t discourage addicts because they need the products that much. High taxes on the rich, however, will discourage them, despite the fact that they are the most driven and innovative individuals in society.
8. We emphasise choice and market diversity, but model the economy as a single person with set preferences who responds robotically to incentives, and as such does not have any real choice.
10. If rich people felt they were getting a good deal from taxes, they’d pay them. But benefits cause people to free ride.
13. We will emphasise that all government spending creates crowding out, but remain silent when cuts do not crowd in.
14. Local knowledge is great for coordinating prices, despite the fact that market participants having disparate knowledge opens the door to fraud.
15. High pay doesn’t matter, you’re just jealous. But the pay of union bosses and members is ground for dissent.
16. Wages are too high, it’s increasing company’s costs. Profits are never too high.
17. Large firms benefit from economies of scale. Supply curves slope upwards, implying the opposite.
18. Force is bad, except if we’re forcing countries to accept ‘free trade’ agreements.
19. We must look at how economic systems and decisions affect all groups of people and across time, rather than just one and at the time it is implemented. But we adopt a Anglo-centric perspective on capitalism, ignoring its global impact.