Your Free Market Is Looking Pretty Expensive

By: Elena Obukhova

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^{"Underlying most arguments against the free market is a lack of belief in freedom itself." – Milton Friedman}

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Since moving to the US, I've experienced a significant disconnect between what I see and what I hear. I've met people who blame various issues on the "free market" and "capitalism." My question is always, "Do you understand what these terms mean?"

Let me drop a definition here.

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Government Overreach vs. Free Market

I recently came across Marc Andreessen's thread on "Little Tech," which describes a movement supporting smaller tech companies (as opposed to Big Tech) and fighting recent government scrutiny of small businesses. In reality, if we were living in a truly free market capitalist system, such movements wouldn't be necessary. Little Tech would naturally be protected by the healthy competition.

Instead, the burden of expensive public sector operations and enforcement (which is anti-small business, anti-startup, and anti-venture capitalist) falls on these little entities [hello, taxes].

I truly fell in love with the US and its people. Smart minds, great spirit, opportunities, innovations, etc. NYC became a very special place for me where everyone has a story to tell. Everyone's background is fascinating and keeps you moving.

It's deeply painful to see more social policies being introduced, trapping people into a needy and dependent lifestyle. The level of unfairness and economic damage from these policies is yet to show its face. Government housing (Projects), social welfare, subsidies - all these things are a true poison pill that was swallowed by economies under socialist and communist rulers.

A person with an extensive medical degree blames high insulin prices on the free market and capitalism. She wouldn't answer how the patent law fits into the Free Market narrative.

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Laissez-Faire & History

Historically, the governors can't let it go. And all so called laissez-faire attempts were quite restricted. There are a few examples I would like to bring up.

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Hong Kong.

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Hong Kong (After WW2 to 1997). After World War II, Hong Kong faced significant economic challenges, including a large influx of refugees, high unemployment, and a lack of natural resources. The British colonial administration adopted a laissez-faire approach, with minimal government intervention, low taxation, and an emphasis on free trade.

Under Sir John Cowperthwaite's leadership, Hong Kong's government maintained low taxes, refrained from imposing trade restrictions, and avoided welfare policies that could lead to dependency. This approach allowed businesses to thrive, attracting foreign investment and transforming Hong Kong into a global financial hub.

However, you would ask “What about the housing market situation?”

Hong Kong had a system where all land was technically owned by the Crown and leased to private individuals and companies. This system, while generating revenue for the government, also contributed to long-term housing market issues.

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The United States.

The US also had its own laissez-faire period which is often referred to as the Gilded Age. Rapid industrialization, economic growth, and relatively minimal government intervention in the economy. However, you only need a few interventions to create monopolies.

A few examples of government interventions:

Tariffs on Imported Goods: The US government implemented high tariffs on imported goods to protect domestic industries from foreign competition. While these tariffs helped American manufacturers grow, they also allowed monopolies to charge higher prices domestically without facing competition from cheaper foreign goods.

Land Grants and Resource Exploitation: The government’s land policies, particularly the granting of vast tracts of land to railroad companies and other large enterprises, enabled these businesses to accumulate significant wealth.

It is all gooood BUT then the regulators come in place.

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Critical Thinking: The True Free Market Currency

A free market creates opportunities for critical thinking, an extremely valuable trait that many people unfortunately forget or lose due to the mythical convenience provided by government bodies. You don't need critical thinking if you're constantly being told what to think.

Innovations require critical thinking. The more innovations you want, the more critical thinking you need. Would you want people without critical thinking skills to vote and make decisions for you? The answer should be simple.

I'm pro-diversity of opinions. Interestingly, a free market (by definition) enables full diversity. You don't need the government to push and promote it; markets would naturally solve for it. Instead, we have "free speech" that is censored and merit switched into 'diversity'.

There's no 'social care' in capitalism; it's socialism.

P.S. Bitcoin was built on the principles of the Austrian school of economics. Somehow we hear people in the crypto space pushing for more government subsidies and regulations. If that's what you want, please just use your bank account 😉

I feel more people are starting to wake up. Let's keep it this way.