It is impossible to objectively define how free a market is. This is a political definition. Government is always involved, and those free marketers are as politically motivated as anyone.
People always think they're in the middle of a revolution while they tend not to realize the enormity of a change that has happened in the past. The telegraph was a revolution, but who looks at it that way these days? The telegraph sped up the transportation of messages over long distances by a huge factor.
The truth is that the free movement of goods, people, and money that developed under British hegemony between 1870 and 1913 - the first episode of globalization - was made possible, in large part, by military might rather than market forces.
Charities are now working to give people in poor countries access to the Internet. But shouldn't we spend that money on providing health clinics and safe water? Aren't these things more relevant? I have no intention of downplaying the importance of the Internet, but its impact has been exaggerated.
Contrary to what professional economists will typically tell you, economics is not a science. All economic theories have underlying political and ethical assumptions, which make it impossible to prove them right or wrong in the way we can with theories in physics or chemistry.
Economics should be defined in terms of what it is about. It should be about how people produce things, how people exchange them, how people earn income, how they pay taxes, how the government provides infrastructure with tax revenue, and how it conducts monetary policy. The subject has to be defined in terms of the object of inquiry.
Markets are, in the end, man-made devices for utilitarian purposes, not a force of nature that we should not try to resist. If they end up serving the interests of only a tiny minority, as is increasingly the case, we have the right - and indeed the duty - to regulate them in the interest of greater social good.
It is time that we dispensed with the myth that the market is a force of nature that should not be meddled with. Markets are social creations that can be, and have been, modified for social purposes.
Many people think that the U.S. is ahead in the frontier technology sectors as a result of private sector entrepreneurship. It's not. The U.S. federal government created all these sectors.
Instead of reading a paper, we now read the news online. Instead of buying books at a store, we buy them on-line. What's so revolutionary? The Internet has mainly affected our leisure life.
Indeed, willingness to challenge professional economists and other experts is a foundation stone of democracy. If all we have to do is to listen to the experts, what is the point of having democracy?
I am one of the most successful economists, according to what markets tell us, though most of my professional colleagues, who are much keener to accept market outcomes than I am, would dismiss me as a crank or - the worst of all abuses among economists - a 'sociologist.'
Free market economists frequently see minimum wage legislation as mere political intervention. However, there are decent economic theories which show that, under certain circumstances, minimum wages can be beneficial, as it makes workers more productive.
Basically, the myth is that America has been founded on the free market; the government has done very little; it has thrived under free trade. But actually, if you look at the history, this is actually the country that has succeeded most with protectionist policies.
