UNDERSTANDING FREE MARKET MYTHS, I

What makes America great is how we took our cue from the Renaissance and the Enlightenment, and then embraced the principles of human dignity and equality of opportunity. The notion that hereditary privilege (monarchy), social position (aristocracy & the church), and political networks (palace sycophants) should determine who ends up on top in society was rejected by our Founding Fathers.

To insure that everyone had an opportunity to make something of themselves we created a novel political and economic system that embraced equality of opportunity.

Now, to be sure, because of social, racial, and gender beliefs at the time our Founding Fathers originally limited opportunities to those with property (which eventually was dropped for all white males, and amended as the years went by). The point is that our nation was founded upon the principle that the opportunity to make something of ourselves – if it was sufficiently spread across society - would strengthen this country politically, and make it prosperous economically.

Similarly, our nation's founders also understood that the wealthy could, as William H. Gates, Sr. and Chuck Collins put it, “privatize” their needs. Whether it was private armies (more like private thugs), private libraries, private clubs, private tutoring, transportation, etc. they understood that powerful economic aristocracies could pursue and acquire what they needed quite easily. They didn’t need any help.

Ordinary folks, on the other hand, would need public systems of justice, public libraries, public parks, public education, public roads, infrastructures, etc. in order to take advantage of the opportunities promised by the Constitution.

They also understood that if we let the economic aristocracies of America run the show that they would stifle and undermine the democratic impulse in this country.

For this reason, over the years our nation has embraced progressive social movements that enhanced personal freedoms (civil rights, women’s movement, child labor laws, etc.) and created the ladders of opportunity, which we see in public education, public libraries, public infrastructures, public transportation, etc. These opportunity granting developments, however, cost money – which means taxes.

To deal with these needs over time we've developed a progressive tax system designed to maintain public balance and bolster the principle of equality of opportunity (what Adam Smith, the godfather of capitalism, referenced as the "laws of justice"). And, at least until the end of the 20th century, this system has served America well.

Unfortunately, many Americans now feel they no longer have to participate in our progressive tax system. Worse, many more seem to believe that they are the best judge of how much they should contribute to the American experience.

This has become the mind-set of many Americans. And it has happened in spite of the fact that Adam Smith believed that wealthy riders in luxury carriages should be made to pay higher road tolls because the “indolence and vanity" of the rich should be made to pay for the general needs of society.

Today, if it were left up to many segments of society, we might even be left with the functional equivalent of this …



I’ll be discussing this, and other aspects of our nation’s founding in today’s class, The Myth of the Free Market. If all goes well, I’ll be posting periodically on the themes that will be covered in class lectures over the next ten weeks.

- Mark