The Free Market, that culmination of all our decisions and preferences, all made possible of course by liberty, the liberty to choose is what creates preferences. Economists would probably slaughter me for not stating this, but what essentially underpins all economic activity is scarcity, the finite nature of man’s resources and the unlimited wants of his soul. I say man’s resources and not material resource in general to ground the analysis, as Austrian would, in the individual, to highlight how man’s limited resources, that scarcity necessitates liberty for men to prosper. Man, as Nietzsche would say, is born merely to die, if the matter is looked at objectively, the only end attributable to existence is its end, that, beyond dreams and destinies, is an actuality for all, King and peasant alike, death. At least that is how a Nihilist would view the world, for the purposes of our point it was necessary to show the finite nature of man’s time on earth, from this very fact, the scarcity of man’s time among the living, economics finds its footing, in the individual.
Man has a limited amount of time on earth, this is a fact, therefore her actions are determined by this very fact, actions here being her ‘economic activity’, so she essentially ranks which actions to take given the satisfaction said actions will give her, from priority ones like sustenance to less pertinent ones like leisure, man, given the limited amount of time she has on Earth, has to choose which of this limited resource, her time, to devote whatever action. This choice, this having to decide where man best spends her time is where Liberty is intertwined with economics, the Freedom, Liberty to choose what to do with one’s scarce resources firstly like time, is what gives credence to having to decide how best to utilise the material world’s scarce resources also. The Freedom to choose is what defines ‘Free Markets’, they are, a priori, the most efficient way to utilise the scarce resources at man’s disposal, given the personal nature of satisfaction, any other form of economic activity not premised on the liberty of man to choose (Socialism) will invariably run into inefficiencies if not total collapse like a wholly planned economy as Mises posited in his work on the calculation problem of Socialism.
No one can decide how best to utilize the scarce resources at man’s disposal than ‘man’ herself, I have purposefully not referred to the collective term ‘humanity’ or ‘society’ to highlight that the essence, the foundation of the collective, is the individual. Not to say the individual is the be all and end all in the sense of an isolated island, as the ‘Markets’ parts of free markets shows, man prospers when in contact with another man for purposes of trade, hence the markets part. Since man’s liberty to choose has been established, this freedom of choice is what implores man to trade with one another, since she has scarce resources and unlimited wants, one can do A whilst the other does B and even though their resources would not have changed, their output would have been higher in that they would have produced beyond what their individual capacity could have had they not decided to specialize. They get to share in the production of one another, voluntarily of course since they have liberty, by exchanging a part of whatever they have produced and have 2 different goods for the expenditure of resources of just one. This is the a priori nature of the prosperity wrought by trade, and thus, wrought by free markets, through the division of labour (which stems from man’s freedom to choose what action to take to best utilize his scarce resources).
The above described scenario of freely acting man is not always the case, due to the social nature of man, the necessity to interact with one another as has been established for purposes of economic prosperity, socially too, this is how man flourishes. Through interacting with other human beings and as history has shown, forming groups premised on shared identity or just sheer coercion by another stronger group of man who call themselves the state, governments, kings or whatever entity that, for reasons beyond the scope of this piece, decides to monopolize the use of force and establish itself as ruler over others. Man is a social being and the nature of man’s social interactions can either take the voluntary nature described above premised on the freedom to even choose to interact or not or be premised on force, that is under some form of coercion or aggression or threat thereof against property in the self or material.
Since Adam Smith wrote his treatise in the 18th century, essentially establishing economics as a field of study, the concept of freedom, that is free enterprise and free trade have been tied to prosperous economic activity, termed the free market. Through logic by the Austrians and through empirical data by the Chicago school, the necessity of liberty to prosperous economic activity at least becomes obvious. For prosperity, man’s actions should be wholly if not as close to wholly free as is possible, entities which are established on non-voluntary means like the state (Non voluntary in that taxation is theft given that it is a ‘choice’ in some cases literal coercive action induced under threat of aggression against the self in prison time or a fine which would act as aggression against property) need to function under this premise, especially states like South Africa, which happens to be a Constitutional democratic state that is founded on values like Freedom and the Rule of Law. Freedom is the absence of inhibition, thus advancing human freedom necessitates the elimination of as much inhibition to the conduct and action of man. Inhibition stemming from the state seeing as without it, man acts without no threat of the use of aggression against him should he deviate from certain norms laid out by said state.
Given this necessity to limit inhibition on the conduct of man, that is, given the necessity of freedom, its ultimate form being the absence of inhibition to prosperous economic activity, it follows that a state should not impede, in any way most especially regulation, the economic activity of man, if maximizing prosperity is its aim, or actually living up to the Constitution as in the case of South Africa. The Competition Act 89 of 1998 is a blatant disregard of this very principle, it spits on the face of man’s ability to determine how best to utilize his scarce resources, it spits on the concept of the free market, it purports to facilitate and promote what occurs naturally without any state involvement, it actually best occurs without said state involvement, competition, brought about by man interacting voluntarily, with the freedom to choose without state inhibition in the form on legislation.
‘The Competition Act 89 of 1998 was enacted in order to provide all South Africans equal opportunity to participate fairly in the national economy; achieve a more effective and efficient economy in South Africa; provide for markets in which consumers have access to, and can freely select, the quality and variety of goods and services they desire; create greater capability and an environment to compete effectively in international markets; restrain particular trade practices which undermine a competitive economy; regulate the transfer of economic ownership in keeping with the public interest; establish independent institutions to monitor economic competition; and give effect to the international law obligations of the Republic’. (Preamble to Competition Act 89 of 1998)
This is the preamble of the Act, a classic case of double talk, disregarding the logical contradiction of an act that seeks to ‘provide for markets in which consumers have access to, and can freely select…’, an end best achieved by eliminating as much inhibition to the freedom to choose as is possible, an end therefore defeated by legislation, which by force of existence presents an inhibition to the freedom of man to choose how best to utilize his scarce resources seeing as if man wanted to act as the legislation prescribed, it would not be necessary, therefore it acts as a directive coming from the state so by implication it not only will result in an inefficient use of man’s resources since said use would not be ‘free’ but it defeats the purpose of what it aims to achieve.
Given the economic disaster we find ourselves in as a country, this logic of letting human beings take decisions freely without any form of state inhibition be it for their own good or otherwise is the only way prosperity can be achieved in this wonderful continent of mine.