The Free Market Economy Compared to Representative Government
I know it is counter-intuitive to believe that when each citizen
controls equal political authority our societies will be more
ordered, our governments will be more effective and they will have
more authority to make effective change. The aristocracy of the
eighteenth century argued that a free market economy would fail and
drive Europe into chaos. A good argument for a participative
democracy is the success of our free market economy.
Before Adam Smith, no one knew what a free market economy was. Aristocrats controlled our economies. Adam Smith advocated a free market giving every participant, the buyers and the sellers, equal opportunity to produce, purchase and market goods and services. His book "An Inquiry into the Nature and cause of the Wealth of Nations" was published in 1773.
In our recent history we have good examples of both controlled and free economies. The Soviet Union boasted about how they had organizations to control the production and distribution of goods for their people. The Soviet Government until 1989 denied their citizens equal opportunity in the marketplace. They talked about how stable their economy was compared to the out-of-control free market economy of the West. The differences between the two are enormous and although there are many problems with the free market economy it appears to improve the quality of life of the entire spectrum of society.
Our western marketplace is controlled by participants, not government. Because of this we are able to walk into any shop and find the best selection, price and quality of goods and services. In our western societies we have economists who, like our political scientists, analyze our economies and construct principles of good economic practice. In order to maintain honesty our economies have accountants who are the backbone of our free market economy. Why don't we have political engineers, the equivalent of accountants, in our economic system?
I would like to equate the communist economic system to our present political system. Both systems control, from the top down, citizens with absolute authority. Both systems allow very little input from the people and do not use the individual as a resource. The free market economy is a wonderful example of a participative democracy. We all participate by "voting with our dollar". People control what is on store shelves by selecting the best quality, the best price and in some cases where and who made the products.
Old communist jurisdictions used a controlled economy. Soviet professionals, who apparently had huge amounts of information at their fingertips, controlled production and distribution of goods for their people. (I learned this directly in Morse code on my ham radio and was almost convinced.) Western societies use a controlled political system.(representative democracy). Logically the controlled communist economic system should work better than the uncontrolled free market economy, just as a representative democracy should work better than a participative democracy. However, it's quite obvious that the opposite is true, at least when it comes to economics.
A participative democracy will improve politics just as our free market economy has improved our lives in contrast to what it was like to live in a Soviet controlled economy.
Almost all the surviving communist countries have captured the strength of the free market economy by handing over control of the market to their people. In the last three decades China's economy has moved from subsistence to a powerful economy. There are many reasons for this change, but the most important is the change from a controlled economy to a form of communist free market economy.
Russia has become a democracy that gives privilege and monopolies to influential people. Their attempt to move towards a free market economy, where every person has equal opportunity, has been plagued by an uncontrollable elite. These plutocrats have stifled the initiative of the individual in the same manner that our political system stifles the political initiative of potential leaders in a representative political system. A participative democracy will capture the collective wisdom of our citizens with an unlimited number of effective leaders not just a few representatives who for the most part are angry older males (often wealthy) who represent a narrow ideology.
The biggest barrier to political progress mankind is facing is how to indoctrinate its citizens with the fundamental principles of participative democracy. Instead of believing, as we do today, that the citizen controls little or no political authority, and only people like Justin Trudeau and Donald Trump have this privilege, in a participative democracy each citizen, including the most powerful leaders, control exactly the same amount of political authority. In the past people living in communist countries were indoctrinated to live with a controlled economy. They had no experience living in a free market economy. This ignorance made Soviets suspicious and distrusting of western economics just as citizens in western society are suspicious and distrusting of participative democracy.
No one on the planet today has the experience of living in a society where each citizen controls the same amount of political authority from the age of consent to the end of life. No one today has lived in a world where the biggest source of authority is female. I'm confident that if the people of the world have the experience of living in a free political system, they will never want to go back to our present antiquated system. The citizens of the future will, no doubt, consider or describe our present political system as barely adequate, just as we now know the communist economic system doesn't work as well as a free market economy.
Before we move away from our representative democracy it is absolutely essential we follow the historical example left to us by Solon when he set up a dual system of government in Attica (ancient Greece) in 600 BC. The citizen's assembly, for a period of some ninety years, had no political authority until the people had time to practice, perfect and achieve confidence in the participative system. In 508 BC Cleisthenes's proclamation legitimized the Citizens' Assembly as the source of authority in Attica.
If one examines the good things about Western Societies, one notices a wonderful variety of affordable goods of excellent quality. This is because each economic citizen has equal opportunity to participates by competing to sell or voting on what they think is good and well priced by buying it. This tradition is being eroded because our governments are increasingly making laws that give international corporations privilege. In the future citizens in a participative economy will insure that producers of goods and services enter into a competitive struggle with other producers. In a free market economy the survival and incentive for producers to make the best goods and provide the best services depends on choices made by economic citizens. When you take away this incentive the quality of goods and services decline. Products have become increasingly cheap to buy but in the long term expensive because they have such short life spans. Representative democracy is powerless to cure this malady which is resulting in uncontrolled expansion of our land fills.
Do our representative governments have the will and the authority to maintain a free market economy? Is our functioning economy at risk from giant banks like Goldman Sachs, monopolies, internet market places and big box stores?