Free markets
correctly and benefit people. He claims that ‘protection really means exploiting the consumer’. 100 Consumers naturally want to buy a good at cheaper price, but the high tariffs will not allow this to happen. People are ‘free to choose’, but government intervention can possibly distort this right. Apart from philosophical and political matters, we should also consider economic factors. The biggest and the most obvious problem with more government intervention are of course weak incentive. Milton Friedman says ‘the effective transmission of accurate information is wasted unless the relevant people have an incentive to act’, 101 highlighting the importance and the power of incentive, which is one of the roles of price. Weak incentive will stop the price mechanism from functioning correctly, causing a chaos in the market. Adam Smith’s famous word, ‘it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard of their own interest’, 102 describes the power of interest, the human desire. Ha-joon Chang argues that self-interest it is not the only human nature that motivates us, but he admits that it is one of the most powerful. I do not think we, human beings, are fully made of self-interest seeking factors. Of course people have other beliefs, faiths and duties which will motivate them to do something. However economically, I see self-interest as the most efficient factor that stimulates economic
agents. I do not consider the term ‘self- interest’ as just caring about oneself and its own profit. Interest can mean more than just money. A person may seek his own interest and profit, but this does not necessarily mean that this person will ignore moral values to achieve its goal. One can pursue one’s interest while remaining ethical, without cheating or harming someone, for instance. There are many conflicts between the issues that need to be solved. ‘Man was born free’, said Rousseau. 103 The individual rights for freedom must be respected and protected. However, too much freedom may mean chaos and disorder, resulting in catastrophic consequences such as the credit crunch in 2008. The traditions and cultures of a nation should be also respected and preserved, but these should not be a fetter for further economic and social development. The political issues may be able to find their way to resolution through intimate cooperation within a nation, as well as internationally. Rapid economic growth may be desirable, but we should bear in mind that economic prosperity is not the only happiness that we can achieve. Honestly speaking, I cannot answer the question ‘how free should a free market be?’ right now. This question cannot be and should not be answered by a one person, as one’s justice and faiths may be different from the others’. Positively, but not too optimistically, I believe that through more cooperation and understanding, the harmony created will suggest the very guideline for our future.
100 Milton Friedman, Free to Choose 101 Milton Friedman, Free to Choose 102 Adam Smith, The Wealth of Nations
103 Jean Jacques Rousseau, The Social Contract
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