The "free market" is shorthand for millions of people making billions of transactions and trillions of decisions every day without being told what to do. Not exactly a deity really. Faith in the free market is actually faith in people.
It is as much a deity as Evolution is a religion and Darwin a prophet. The free market is the atheism of economics.
Libertarianism is the triumph of ideology over evidence, of the subjective over the objective. It has caused massive amounts of damage to the economy with its insane belief that the one area of human activity that doesn't need to be policed is the economy, off the top of my head, over the neoliberal period of the last forty years,
- when we pushed interest rates to nearly 20% because we believed that the Fed creates inflation by printing too much money.
- when we allowed banks to speculate in the stock market with leveraged and depositors' money.
- when we deregulated the electrical energy market in California handing the energy companies market set prices and the ability to cause shortages to keep those prices high, reference Enron.
- when we effectively stopped arresting employers who hired illegals, libertarian philosophy of individual freedom and open borders.
- when we deregulated the thrifts, the savings and loan disaster.
- when started turning the healthcare industry into a profit-seeking business instead of the way to keep people healthy.
- when we deregulated the derivatives market.
- when we allowed drug companies and lawyers to advertise.
- when we allowed drug companies to sell water in small green and brown bottles as drugs at drug prices, the deregulation of alternative medicine.
- when we declared money to be free speech, making elections easier to buy.
- when we declared that businesses are people and therefore their executives can't be held responsible for their bad decisions.
- when we decided that we all would be safer the more guns we have.
- when we ran up 12 trillion dollars worth of national debt by passing tax cuts for the already wealthy because taxation is theft.
- when we decided offshore jobs resulting in the shifting of more of the rewards from the economy from wages to profits, from the middle class to the rich, because free trade has to be good because free is good.
- when Alan Greenspan and the Fed failed to rein in the banks pushing subprime mortgage-backed derivatives because they thought that the banks had learned to self-regulate.
- and the biggest one of all, when we decided to ignore the overwhelming evidence of man-made climate change because the only possible solution for it involves government action.
All of these are the results of the libertarian philosophy in action.
If it makes you uncomfortable to talk about the reality of the libertarian philosophy in actual results, and I can appreciate why you wouldn't want to do this, I am fully capable of discussing the many weaknesses of the Austrian/Libertarian economic theories. For example,
- the death of the idea of comparative advantage justification for free trade due to widespread industrialization, the ability of capital in the form of money and of ideas, intellectual property, to cross borders in fractions of seconds.
- the obvious contradiction that you can't have freedom without limiting freedom, that I can't enjoy my freedom without someone preventing others having their freedom to rob or murder me, paradoxically, the more freedom you allow the more freedom you have to restrict.
- that what makes capitalism so effective is that it channels an otherwise harmful trait, greed, into a very constructive result, but it requires an adult to do the channeling, which is and always has been the government.
- that the more complex the economy is, the larger and more complex that the government must be.
- that what kills competition in the economy faster than anything are the interests of the competitors to avoid price competition at any cost.
- that the only theory offered for exactly how the free market would self-regulate is marginal productivity, which, in an industrial economy with effectively no long-term diminishing returns can only result in one of two things, either profitless competition or monopolies and price-fixing cartels. Neither is desirable.
- there is no reason to believe that prices, outside of a very few commodities, are set by supply and demand, that almost all products and services are set by the producer or provider at the average cost of production plus a markup to provide a potential profit.
- that profits are the residual left from revenues after all costs are accounted for, they aren't a cost of production that must be met, while businesses can operate indefinitely if their variable costs are covered by revenue and this is common to try to preserve the capital in the business, the failing business will not be able to expand or to innovate usually, seriously limiting their business and their longevity, another reason that businesses avoid competing on price.
- that companies avoid at cost competing on price, noted above, and instead compete based on innovation, quality and improving productivity. Äll are desirable.
- wages are a necessary cost of production, if wages don't rise as revenues increase or as productivity increases, profits will increase. An integral part of libertarians dedication to private ownership rights is that the business exists for the sole purpose of making profits for the owners or the pseudo-owners, the stockholders. This precludes wage increases for the workers whose productivity increased, who provided the innovations and instead rewards the non-participants, who in the case of the stockholders didn't even provide the money used to fund the change.
- we have to separate what we need from the economy from what the economy needs to operate. For example, the capitalist economy needs profits to operate and to grow, but it can't use an excessive amount of profits to grow faster or bigger, in fact since excessive profits are made rather than used to pay a higher wage, they actually prevent the growth that would have occurred if the money was paid as higher wages, because wages make up the vast majority of the demand in the economy. Like it or not, our current economy is demand driven, the idea that capital in the form of money is a scarce resource and that if we just provide more of it we will see more growth is a stubborn artifact of an agrarian economy and the gold standard for money that should be long gone but aren't because these provide a paper-thin justification to divert ever-increasing amounts of money to profits and to the already rich, like me, thank you very much.
- the income inequality that libertarian infused neoliberalism produces is huge amounts of debt. But not just the public debt, that until Trump and the totally Republican controlled government was the obsession of the right, but the private debt, think about student loans to now poorly supported schools or the ever-increasing medical and housing costs, also tracible to neoliberalism, means that private debt is now about 150% of GDP, or about 30 trillion dollars and growing every year. The decades-long average of private debt before the neoliberal period was 60 to 70% of GDP.
- Private debt is much more dangerous for the economy than the public debt. Private debt makes recessions much more likely and means that it is harder and slower to recover from. The current good economy can be traced to, once again, the increase in the private debt. Not a brilliant handling of the economy by either Trump or Obama. We would have to increase wages to see sustainable, debt-free growth, that stabilizes the economy.
It won't surprise you that I have much more on these subjects but this is enough to get you started.
