Friday, November 04, 2005

Entirely Market Forces

Earlier this week I blogged on issues that were suggested by:
"While everyone understands that some spheres of life should not be subject entirely to market forces. . ."
I'm not sure I did a very good job with my thoughts in that earlier post. I think maybe I can do better today.

It seems to me that the perspective presented by such a sentence is likely to be backwards. Let's start be considering what market forces involve. Fundamentally, market forces involve a buyer and a seller making an exchange. The interaction between people involved in "market forces" is a voluntary interaction. The realm of market forces involves the realm of voluntary action in our lives. Of course, not all voluntary action is going to be described as part of a market. Not all aspects of our lives involve exchange. Market forces involve voluntary interdependent actions that we characterize as exchange.

One reason we talk about "market forces" is because we are interested in the role of government and public policy in our lives. A fundamental difference between market forces and government (public policy) is that while markets are voluntary, government is inherently coercive.

When considering a statement like "some spheres of life should not be subject entirely to market forces", we are led to ask: What spheres of our lives should not be subject to market forces? Because I see the market as part of the "spheres of our lives" that are characterized by voluntary individual behavior, I don't think this question is really very informative. I think our starting point, or our default position, should be voluntary choices. It seems quite easy to justify voluntary choices and voluntary behavior, at least if such voluntary behavior does not harm others. I think a better way to put the relevant question is: What spheres of our lives should be subject to coercion or coercive forces? If one chooses to interact with others in exchange and through prices, or if one chooses to interact with others without prices and without exchange, either way the interactions are voluntary. It seems to me quite difficult to be concerned about the voluntary realms of our lives. The really important questions involve what realms of our lives we think it is appropriate to be subject to coercion or coercive forces. I believe the answers to such questions will point to the appropriate role for government in our lives.

As I said earlier this week, I think most will agree that it is wrong, in general, to coerce (or aggress against) another person. There is one exception to this general principal: coercion or force may be used against another in self-defense. The police power role for government fits this idea of self-defense. That is, we turn to government and give it the power to protect us from harm to our person or our property that would be caused (or has been caused) by another.

The really interesting and important questions do not involve what spheres of our lives we want to be characterized by voluntary choices and behavior, but what spheres of our lives do we want to say that it is acceptable for coercion to be used to interrupt what would otherwise by the voluntary spheres of our lives.

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