In dire times people are looking for scape goats. One of the most common scape goats is the free market. So is the free market really the problem? Let us look at what countries do in these troubled times.
- First, they blame other countries for unrighteously compete with their domestic industries, setting up tariffs for foreign trade, thus engaging in trade wars, instead of letting competition rule.
- Second, they increase regulations on businesses, blaming trading robots, short-sellers and other participants, and trying to interfere with these tools of the free market.
- Thirdly, the state out-crowds sound private companies by engaging in their own businesses with the unlimited resources of the public. This is just one of many things the state do to ruin private businesses. Out-crowding is also done by manipulating the interest rate so it either becomes too high or too low, and thus ruining the private businesses’ ways of doing business at market rates.
So there you have some of the reasons why bad gets worse. With all these things happening at once in already fragile economies, there is no wonder that the economy usually hits a depression or crash before things get better.
Also note that all these signs are signs of socialism, taking us further away from the principles of free markets. A free market is a market without rules governed by the state, but instead by rules made by the market’s own participants.