The Gerecke Files: Is the Market Free or Rigged? (Not a Pithy Polemic)

Bob Gerecke

Just to prove that he is capable of writing at greater length, Bob wrote this powerful piece.

It's only a free market if the parties to a deal have equal or at least similar power. If your employer can stop your income by firing you, but you can't stop its income by striking with your co-workers as a group, it has power and you don't. It's free and you're not. If it can cheat you and your co-workers out of a little of your pay, and if your bank can overcharge you and thousands of others, and if your broker can recommend investments which benefit him more than you, but you aren't allowed to join those similarly harmed and collectively sue for damages, and you can't afford to sue individually, the employer and bank and broker have power and you don't. They are free and you're not.

When self-defined "conservative" politicians and judges empower your employer, your bank, the store where you shop, or any other institution, while denying you the power to bargain equally, to defend yourself against mistreatment or to recover your damages, that's not a free market. That's a rigged market. When they claim they're doing it for the sake of a free market, it's a lie.

Business associations oppose consumer and employee protections, while seeking protections for themselves. They tout the virtues of competition, while trying their best to eliminate their competitors and to block innovations which would create new business models to compete with theirs. As industries mature, weaker competitors die or are taken over, until there is very little competition. The few surviving "competitors" charge similar prices and impose similar policies on their customers. When businesses adopt the same policy toward their employees or customers such as forced arbitration, you're stuck with their decision. You can't decide to find a better deal if it doesn't exist . That's a rigged market, too.

The owners of a business can band together to partner or incorporate by filing some paperwork. They don't need permission or cooperation from their employees. However, they are allowed to interfere with their employees banding together to form a union to bargain for wages and benefits, because the "penalties" for them doing so are a slap on the wrist. That's a rigged market, too.

When the management of a business creates incentives and other policies which force their employees to exploit and cheat you in order to keep their jobs and make a living, regulator agencies or the courts impose penalties. But not on the managers. The investors, the vast majority of whom had no power to decide those policies, pay instead because the business pays. That's a rigged system, too.

If you believe that the system is rigged, you're correct. When power is unequal, might makes right. That's not a free market any more than it's a free market if a robber with a weapon asks you to turn over your car or your wallet in return for a candy bar. Sure, you received something in return. But it wasn't adequate or just, and you didn't really have a choice.

In opposing government regulation of business, conservatives usually say that they are protecting free markets and choice. For the powerful, yes. Progressives, on the other hand, want a rule of just laws and regulations that protect freedom and choice for all, not just the powerful. A rule of laws and not of men. Haven't we heard that before?

When the management of a business creates incentives and other policies
which force their employees to exploit and cheat you in order to keep
their jobs and make a living, regulator agencies or the courts impose
penalties. But not on the managers. The investors, the vast majority
of whom had no power to decide those policies, pay instead because the
business pays. That's a rigged system, too.

If you believe that the system is rigged, you're correct. When power is
unequal, might makes right. That's not a free market any more than it's
a free market if a robber with a weapon asks you to turn over your car
or your wallet in return for a candy bar. Sure, you received something
in return. But it wasn't adequate or just, and you didn't really have a
choice.

In opposing government regulation of business, conservatives usually say
that they are protecting free markets and choice. For the powerful,
yes. Progressives, on the other hand, want a rule of just laws and
regulations that protect freedom and choice for all, not just the
powerful. A rule of laws and not of men. Haven't we heard that
somewhere before?