Why the Free Market is Not Taking Advantage of You

The central claim of this article is that aside from regulatory barriers, the market will never leave normal people in a worse state than they would be in without the market. This is made to combat the frequent claims that the market is unfair or that people would somehow be better off without it. Workers will also attribute their low wages to the market, as though if the market disappeared higher wages would be sitting there for them. The creative potential of the market is vast and has accounted for almost all of the increases in material quality of life and leisure time in the last hundreds of years. This is something that has never been successfully replicated by any sort of command economy, or even more intense socialist economies. China instantly bettered its outcomes by switching to a more capitalist system. The most common gripes about the market are wages, the cost of everyday goods, and housing prices. However, dissatisfaction in these areas either arises from comparison, a result of government regulation, or some underlying reality that would exist with or without capitalism.

In a free market, no worker can ever be forced to work in a job that does not benefit them. While they may perceive that they are not being given what they deserve or that they wish they had more, in all cases they are better off than if they were not in a free market context. Wages have strictly risen over time, and are usually highest in countries with free markets.. Workers can look at jobs that no longer exist as an example that the market doesn’t work, but for the most part those jobs were the ones that workers were complaining about back then. For example, factory workers and coal miners are far less demanded than they were 70 years ago, and Trump and various labor groups have sought to revitalize those industries. However, factories and coal mines created some of the poorest conditions for workers to exist in. It’s easy to look at jobs that no longer exist or the fact that your salary trails others and blame the market. While some workers have spent time developing skills that are not needed by the market, there are many jobs that require no training that they can use and achieve a better quality of life than was possible to almost anyone just 100 years ago. If an employee is skilled in something valued by the market and is being paid under what other similar employees are paid there is almost no situation where they won’t be able to find a better paying job.

Rather than being a driver of price increases in everyday goods, the market as a whole has a powerful downward effect on real prices. However, the effects of inflation are often used by consumers to cast blame on capitalism. Although the real value of a dollar may have decreased by 5%, the price of a specific good may increase by less than that, and it still appears the capitals are scrounging for more money. In reality, people used to spend roughly 45% of their household income on food and now they spend closer to 10%. This drastic decrease in spending is an increase in well-being as a result of capitalism in spite of inflation and higher levels of government regulation. Even the recent increase in food prices is explained by global supply chain shifts and inflation rather than corporate greed. Of course they are self interested and would often do horribly unethical things to make a profit, but whenever they create a high priced outcome with a low performing product, other people can easily undercut them. The lower prices before Covid make it easy to despair in our current state without appreciating the great historical decrease in real food prices. Almost every sort of item a person could want is available at a much cheaper price and in far greater quantity than in the past, even with the increases due to inflation. While people often complain of the lack of beautifully made or high-quality products, even those are cheaper today than they would have been in the past, and the lack of them is simply a result of people’s prioritization of other ways to spend their money. The critiques of capitalism relating to prices are almost always frustration with something else directed towards capitalism. 

While housing prices have increased in many states, this results from an inherent space limit, and the interference of regulation rather than from the market. While far from exhausted, there is only so much land to build on near any metropolitan area, and this means that as population increases, vacant single-family homes become rarer and thus more valuable. Additionally, as building increases, government regulations balloon alongside it. This increase in regulation means that tens of thousands of dollars are added to the cost of building any house. This incentivizes further building and directly passes this cost onto the consumer. The part of this high price of housing that the market is most responsible for is the vast private equity ownership of houses. However,these companies have ultimately harmed themselves by entering a waiting game with an unspecified timeframe. When they exit the market due to low real estate returns, they will ultimately trigger a great real estate sell off. Even with this false shortage, in all situations lowered building regulations could decrease the price of each house. The high prices of housing and rentals could be brought to extremely reasonable levels if building codes were decreased. 

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