Free Markets

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There being no laws to stop them, it's quite possible that in an anarchist society some people will choose to live in isolation. After acquiring some land they will build their own shelter, weave their own clothes, grow their own food, assemble their own automobiles, distill their own fuel - and Bourbon - without ever exchanging anything with anyone else.

Possible and unforbidden, yes of course; but not very likely. The enormous advantages of a division of labor, with the exchanges that it requires, will be so obvious as to attract almost everyone to seek their happiness by interacting with others. The resulting system we call a "market", and since no external rules would control it, we call it "free".

Let's say you're good at carpentry but unskilled at building web sites; I'm passable at the latter but terrible at the former so we make an agreement. You make me a bed, I'll make you a web site. We draw up an agreement, get to work, and exchange the fruits of our labor. You get a web site, I get a bed. Both are happy. That's called "barter".

But suppose I already have a bed, and right now don't want any product of your skills - but still you want a web site, to promote your woodworking business. I can still make you one, if we can agree that you pay me not in goods but with a medium of exchange, called "money". Then we can still do the deal and finish happy.

The task will take a while, and I want to be sure that the X units of money agreed in our contract on Day One will still be worth the same on Day Thirty when I finish. So we agree on a form of money that will hold its value. We will not carelessly settle upon pieces of paper, for example, issued by someone with the power to change their value at will.

In 1923 Germans had to spend their wages the same day they were paid, because the government of that time depreciated the value of money so fast that tomorrow, the wages would buy almost nothing. The same is still true today of all government paper "money" - the difference lies only in the rate of value loss.

In such a free market, therefore, participants will choose a form of money that has a value stable over a long period; never will it choose government money. That's why today's government paper is the subject of "legal tender" laws: those laws do not just allow their Federal Reserve Notes to be used in payment of all debts public and private, they compel them to be accepted! No wonder. Only an idiot would accept them in the absence of such compulsion.

So the principle of voluntary exchange, a bedrock of an anarchist society, would cause the choice of stable money. There might be several forms, but gold would almost certainly be the most popular. Its value has been stable for thousands of years; its supply is severely limited by nature; it is almost impossible to counterfeit, simple to identify, and a large value can be carried in a small weight and volume. Ideal for a free market.  

Goods & Services

Each member of a free, anarchist society will pursue his or her own happiness in his own way, and using his own skills. He will offer the products of those skills in voluntary exchange, first for money as above, then by spending it on the goods and services of his free choice. There being no laws or rules externally imposed, nobody will be compelled to spend his own money in any particular manner.

Being hungry to maximize happiness, each person will be greedy and acquisitive, and that motive will drive him or her to excel; to strive to please his customers to the maximum extent, so as to maximize his gain. He will find ways to work less hard for the same output - he will mechanize his work and use capital to do so, and will invent new ways to complete it. This innovation characterizes the best of American enterprise, during its brilliant development in the more-free Nineteenth Century as well as in the less-free more recent past. In an anarchist society, it would proceed at dazzling pace, for no laws would impede it.

In that way every member of society will become ever more prosperous, so that the entire society will have a rapidly advancing standard of living - not just of the material comforts which some pretend to despise, but in everything that money can buy including medical care and benevolence to the suffering. Precisely that is already happening all over the world: where we measure a greater degree of liberty, we also measure a higher standard of life - even of length of life. Freedom and prosperity always correlate. Absolute freedom (anarchism) will therefore maximize prosperity.  


An anarchist society, a free market, would as stated have no laws externally imposed by some kind of government. That does not mean, however, that it would have no rules at all. How so?

Very simply, because there would be a time dimension to many exchanges - perhaps to most of them. My carpenter friend and I agree that I'll build him a web site for two ounces of gold - but the key word there is "agree". We make an agreement, a contract, before work begins. The agreement is strictly voluntary - either of us can walk away from it, before it is signed; but once signed, it becomes binding. Without that, I will not start work, for I judge the risk to be too high and will not throw away my labor; it is mine.

Such voluntary, explicit contracts form the referenced "rules". Persons in an anarchist society would literally make up the rules as they go along; if the proposed terms of a contract are not agreeable to both parties, it is not made. If they are, it is.

In a small but very interesting way, the on-line auction service Ebay is providing right now an approximation to such a free market. Nobody need take part, but there are simple rules to follow if you do so choose. An important one of them is that you agree to report and be reported on, by those with whom you deal. If you buy something unsatisfactory - you find the vendor misrepresented the offered item - you record a negative experience and that record stays with him every time he tries to trade on Ebay. It's a kind of ostracism. So everyone has a strong incentive to make money honestly - even those who have no personal moral code whatever - strictly from the motive of long-term self-interest!

So it would be in a free market, an anarchist society. For no other reason than greed and ambition, its members would keep their word; that is, far from being chaotic the society would be orderly! It remains to discuss how the rare exceptions to that would be handled, and so we consider the important subject of justice.  

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