21 December, 2017

Capitalists Against the Free Market


If you listen to the apologists of capitalism, there is one thing they consistently argue for when they rail against things like socialism or even distributism; the Free Market. They say that they believe that the Market should determine what products and services succeed and fail without artificial support or suppression from the government. Customers should be free to decide what products and services they want to buy and it is up to the producers and service providers to convince consumers to choose theirs instead of others. It is interesting to note those cases where they not only fail to support this idea, but actively work against it.

In order for consumers to be able to make a decision that truly represents the action of a free market, the consumer must have the right to know certain things about the products and service providers between which they are choosing. For example, it has generally been recognized that consumers have the right to know the ingredients of food. This is not just for reasons of health, but for other reasons as well. Vegetarians and vegans have the right as consumers to know whether or not the food they are purchasing contains meat or other animal products. This allows them to make a truly free market choice. Consumers also have the right to know who makes a product because, if they think the producer is unscrupulous, they need to have the ability to choose a competitor’s product. If they are prevented from doing this by allowing the producer to be hidden, then the consumer is prevented from making a free market decision they actively want to make.

An important aspect of this consumer choice is that the consumer’s reason does not have to be deemed “reasonable” by others. If you choose not to buy from a particular provider because they support things which you oppose on moral grounds, it doesn’t matter if those things you oppose have nothing to do with the product in question. In a truly free market, you would have the right to refuse to do business with any provider for whatever reason you want. In a truly free market, the consumer would have the right to know what he needs to know to make a truly free decision, and providers should therefore be required to provide this information and prevented from taking steps to hide it. It is the burden of providers to convince consumers to purchase their products and to do so in an open and honest way. If they fail to convince, then their failure is a result of the “invisible hand” of the free market.

In my state, Washington, there was a movement to require the labeling of products containing GMO ingredients. There are various reasons why people are making their free economic choice to not purchase products with patented genetically modified organisms, and these people were asking that their right to make that free market decision be honored by requiring that products containing these ingredients be labeled so that consumers would know what they are buying. What is truly interesting in regard to this article are the arguments I heard made by avowed capitalists against this. The capitalist pundits almost uniformly opposed the legislation on various grounds. The two main arguments made by these capitalists involved the impact to prices and the irrationality of those who opposed GMO products.

They claimed that the cost of changing the labeling would be prohibitively high and the cost of food would skyrocket as a result. There are two points which easily disprove this claim. First, companies change their labels quite frequently when it serves their purpose. They change pictures and rearrange things, they add special sections about offers. If these label changes don’t cause prices to skyrocket, then requiring the labels for future packages to indicate the presence of GMO ingredients won’t either. Second, the requirement has been made in several other countries and their prices didn’t skyrocket. Those who pointed this out were often treated with disdain by these capitalists.

The argument that those who oppose GMO products were doing so irrationally was typically in the form of saying they didn’t understand the science behind the GMO process. However, that isn’t a valid reason to oppose consumer information because the burden is on the producer to convince them to want to buy their products. If a group of consumers decides they would never purchase those products, that is still a free market decision even if the reasons for their choice are incorrect. We should expect avowed capitalists to support the right of consumers to make that decision even if they disagree with the decision itself.

While supporters of the legislation did voice their reasons for not wanting to choose GMO products, their argument about the legislation itself was essentially that they wanted the right to make their free market decision, and they couldn’t effectively do so if these ingredients were allowed to be hidden from them in the marketplace.

Since we know that the labeling requirement would not actually cause prices to skyrocket, what then is the real reason to refuse to indicate that a product contains GMO ingredients? An obvious answer is the loss of sales. In a free market with informed consumers, some of them will freely choose, for whatever reason, not to purchase products that contain GMO ingredients. In terms of free market capitalist economics, that is not only they way things work, but the way they should work. For a producer to refuse or oppose labeling that would inform the consumer about these ingredients is nothing less than deliberately working against free market values; hiding information you know the consumers want in order to effectively trick them into purchasing a product you know they don’t want. This is duplicitous at best.

Why then did so many capitalist who claim to advocate the free market vociferously oppose consumers being allowed to make informed free market decisions? They didn’t even seem to realize that they were opposing a position that essentially said, "let the free market decide the fate of GMO products in the marketplace." In essence, they were opposing the free market itself.

4 comments:

  1. That has been my stance too, but how do we fight big business - big government collusion?

    Ben Haring

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    1. Ben,

      By continuing to point out these cases of inconsistency to capitalists. Most with whom I discussed this issue at the time didn't even realize that they were acting against a free market decision until it was pointed out to them. It isn't really as simple as that, though. They tended to dismiss their inconsistency in this case. However, our choice is to point it out or to give up.

      If we persist in pointing out these inconsistencies, there is a hope that the cumulative evidence that capitalism and capitalists frequently act in ways that are actually opposed to their economic beliefs will eventually cause them to question and consider our arguments.

      If we give up, they won't even know that they are acting inconsistent with their professed economic beliefs.

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  2. Just curious, you address the issue of the consumer not wanting to buy a product because of moral opposition, what about the producer not wanting to supply a product because of moral opposition, re: the bakery cases? Free market still apply and government should not interfere?

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    1. Douglas,

      Just to clarify, I do not advocate the position of "no government interference" in the sense considered to be that of the typical "free market" capitalist. In fact, in this article, I am actually advocating the requirement to label products.

      When it comes to the particular bakery cases, I can only speak from my own Catholic perspective. However, I hasten to add that I am not a moral theologian, so take what follows as nothing more than my own opinion.

      The desire to have a cake at a wedding is nothing more than a social convention and the whim of the couple getting married. There is no question of intrinsic rights being violated if, for whatever reason, a cake is not available. However, it should be noted that in all of these "bakery" cases, cakes were in fact available from other suppliers. In my opinion, this demonstrates that these cases were not really one of rights being denied, but were instead deliberate attacks against a particular religious view.

      To take two more examples. I think that the government can compel citizens to participate in a war (provided it meets the Just War doctrine). Our own government allows for conscientious objectors because this tends to not threaten the overall prospect of victory - the numbers of objectors are too few to change the outcome of the war. I have also read of cases where conscientious objectors are still required to server in the military, but not in direct combat. I can concede either of these cases.

      More to the point of your question, let's look at the example of the Little Sisters of the Poor, who were being forced to provide contraceptive coverage in the health care policies of a bunch of nuns. Even if we consider a case of non-religious employees who want contraceptives, contraceptives are available without that requirement so, even with the government's argument that this was a necessary aspect of "health care," forcing the Little Sisters of the Poor to provide that coverage against their religious beliefs was clearly wrong even if considered only on the grounds of necessity.

      For the bakery cases, I am on the fence of whether a baker providing a cake for a wedding actually constitutes formal cooperation in the wedding itself. However, even in when considering material cooperation, cakes were available from other sources without government coercion, so I see no grounds for the government to step in to force the issue in the case of particular bakers. Additionally, since having a cake at a wedding is not a matter of intrinsic civil rights, I don't see any grounds for the government to step in at all.

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