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Free Markets Are Ugly But They WorkOver the last few years (a decade plus by now?) we have heard time and time again how globalization is actually bad for everybody's lives. We have had to endure time and time again protests, outrages, fights, righteousness and all manner of bad karma just because politicians are pushing the "global agenda" or the "corporatocracy".

And of course, the people pushing against globalization have the solution, right? They are coming to the discussion table with a fully coherent, proven, workable alternative, right? We mean, something that will make things better than they are today and better than globalization can make them, right?

Oh, no?

So… you mean that they are still pushing the old tried-and-failed socialist-communist agenda that worked so, but so well in the USSR and elsewhere? Or the Anarchist song-and-dance that never managed to achieve anything other than planting bombs? Those ones? Oh. We see.

And why exactly is that we need to listen to those idiots?

Look, this is not complicated.

If you bother reading history and particularly economic history of countries, you will -eventually- come to the realization that pretty much anything that could have been tried was already tried. There is no mystery here.

  • We know that isolationism does not work.
  • We know that mercantilism does not work.
  • We know that communism/socialism does not work.
  • We know that anarchism does not work.

Just about the only thing that we know for sure that works is the free market. And this is a historical fact. Every single political / economic system that has been tried anywhere in the world, owes its -partial- success to the free markets. All those political-economic systems cheated and to a degree or other relied upon the free market. Don't believe us? Fine, let's recap.

The USSR limped forward since inception because it relied on free-market know-how (i.e. they hired western companies), they relied on free-market R&D (it is estimated that upwards of 60% of the USSR technological "achievements" were simply stolen from the west and copied, badly), the only time were they were able to feed themselves was up to the point where they collectivized the land under Stalin (i.e. up to the moment they destroyed private farms), and so on. Basically, the USSR existed for so long because of all the benefits it derived from the free markets outside the USSR.

China? China was a non-event until Nixon went over there and started the comu-capitalism revolution. Now China is formally a communist state however and for any intent and purpose is far, far more capitalist than the USA!

Cuba? Ditching communism one decree at the time, and it shows. People are becoming wealthier and happier.

Nicaragua? Just ask people what the Sandinista revolution looked like. People in the West are stupid and they are stuck in the knowledge that the CIA-backed contras were artificial. They are missing the point altogether. The Sandinista revolution was on its way out due to massive economic failure… except where they allowed free-markets to operate!

Chile? Sure, bad, bad Pinochet and his coup d'etat which massacred and terrorized people for so many years. Sure. However, why don't you ask people who actually lived through Allende's worker's paradise what it was like? Do you know what it was like then and there? It looked like the USSR on steroids. Same gray lives. Same lack of even the most basic necessities. Same lack of hope. Same same. Why do you think that even today about 50% of Chilean people support what Pinochet did? Do you think this is a coincidence? Do you think that the economic policies enacted by Pinochet (i.e. the free-market orientation provided by the Chicago Boys and based on Milton Friedmans' free-market ideas) were a coincidence with Chilenean economic success?

Venezuela? Just read our article Venezuela - Life In The Worker's Paradise. And this is today. Ongoing.

And so on and on and on and on to no end in sight. The point here is that nothing else works as best as free markets. Sure, they are not perfect and they make mistakes. But then again, we challenge you to show us any other political or economic system that has made fewer mistakes and increased wealth far more than the free market. But we demand one condition; that system must have achieved such success without any help whatsoever of the free market. Anyone here willing to take up that challenge? Nope? Thought so.

Look, again, this is simple to understand.

Political-economic systems are forward-looking. What does this mean? It means that they perform a (flawed) analysis of a future problem and then they devise a (flawed) solution to that problem. And then they implement this (flawed) solution. And guess what? It fails because it was flawed to begin with!!! Not only that, but as this solution is now in place, it has achieved its own resilience thanks to politicians who want to stay in power and bureaucrats who want to keep their jobs. Is then there a surprise that the world is so, but so incredibly screwed-up? Thought so.

The free market, on the other hand, works right on the edge of tomorrow. The free market is a just-in-time solution-development machine. It does its best not to try to forecast the future but just immediate needs and when it fails, it fails catastrophically, it does so fast and then it moves on to the next solution. In so doing it minimizes wasted resources and maximizes successes.

Geee… what a difficult decision to make. Do we go for pseudo-solution "A" or do we go with the actual solution "B". It's a no-brainer, if you ask us.

And what has this to do with globalization?

Everything!

In ultimate analysis globalization is nothing more than the natural expansion of free markets to the entire world. How can this possibly be bad?

Ah… yes… because it lowers the standard of living in "developed" countries. Sure. Those poor, poor middle class people in EU or North America will have to live a more frugal life and they may even taste poverty.

But then again, those poor, poor, poverty-stricken people dropping dead all the time in underdeveloped countries will see their standards of living rise significantly more!

So… it is "ethical" (and yet again we are forced to use the "e" word) to sentence billions of people to a life of misery and poverty as long as a few million are doing OK. Right? On the same token, it is not "ethical" to lower the standards of living of a few million people while significantly improving the lives of billions. This correct, right?

No?

Then why do you support those anti-globalization idiots? Because that's exactly what they are achieving!

Look, again, this is not difficult.

The reason why we have such vast differences in wealth (or lack of thereof) throughout the world is precisely because globalization has been stopped at the borders of many countries and has not been allowed to bring the benefits of free markets into them (see for example Piketty Fences and how "equality" actually works or, if you want to get even more depressed, see Austrian Economics In Pictures).

We have explained time and time again that a global free market brings higher standards of living to everybody. Sure, at the onset some will suffer until equilibrium is reached. For example, people in developed and semi-developed countries have fewer jobs because Walmart buys everything cheap in China. Yet, thanks to Walmart a great deal of Chinese people who couldn't even afford to drop dead, are they now looking forward to a much improved life. Walmart in pursuing their selfish self-interest and profit margin is actually re-distributing wealth where it is needed the most. Not only that, it is providing far cheaper goods and services to those who need them most.

Do you think this is a coincidence? Do you think that Walmart is a charity? Of course not! Walmart is a greedy corporation just like any other. Yet, they are achieving what 200+ years of socialist government policies and charitable work could not. How about that? For a lengthier explanation please see Companies – Our Cuddly Friends.

It is actually very funny (in the sense that it is so bad that it is funny) that those fighting against globalization are typically ardent supporters of wars of intervention. Strangely enough, they despise economic globalization but they demand the globalization of wars through interventionism! For the greater good, you know. We need to stop them. Because of their (insert their favourite excuse here).

Again, simple stuff.

Free markets do not foster wars simply because wars are not good for profits. Even the mob knows this. How much stupider can politicians be? Or anti-globalization supporters? Very. See for example War Is Good Business – Invest a Child. And before you mention all those companies making billions selling weapons to governments, please note the last word before the comma: "governments". Do you actually think that in a free-market there is actually a market for tanks? Fighter jets? Cluster bombs? Nuclear missiles? Frigates? And so on? Of course not. Such a so-called "market" exists simply because the governments have enable it. Remove governments from the equation and such "markets" disappear. Basically, without governments wars are not good business; they are actually not even business.

And yet again, this is not complicated.

Any globalization effort is good…however, globalization as currently undertaken does not represent free markets. Current globalization purposes are simply filters that allow certain countries to take advantage of other countries. Filters that enable certain companies to access profits protected by artificial monopolies. Filters that will exploit people and so on. Yet, even this bastardized version of globalization is infinitely superior to the status quo and daily misery, famine and death that billions of people face today. That's the actual choice.

Sure, in the long run, we absolutely, positively, definitively must get rid of all governments. Future history will do that for us. However, in the meantime, please stop being a dick and think. Look it won't kill you. We promise.

You have a choice. You can make your country "great again" or you can choose a prosper future for you, your family and the rest of humanity. Your choice.

Note: please see the Glossary if you are unfamiliar with certain words.

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