By Glen Melanconn
Markets are truly a human wonder. They allow us to buy products which we lack the skill, resources or time to make for ourselves.
We rarely think about markets until they leave us in the cold.
Markets are simply part of our everyday life. We shop for food and clothing.
Sometimes we make big decisions like buying a house or renting an apartment. Without markets many of us would starve or struggle to survive.
In 1776 Adam Smith introduced a radical French idea to the English speaking world. He was a Professor of Moral Philosophy at the University of Glasgow in Scotland.
In An Inquiry into the Nature and Causes of the Wealth of Nations Smith promoted laissez-faire.
The French phrase literally means “let it make.”
French philosopher argued the government should let the economy make itself.
Eventually, the English speaking world referred to this idea as a “Free Market.”
Free Market economic argues that individuals should be free to buy and sell in the market place.
Smith believed government regulations on trade favored the city over the country. Government subsidies and tariffs diverted money from agriculture to commerce.
Ending government help would restore a natural balance in the economy.
He described this process as an invisible hand.
An individual, who only pursues something for their own private interest, unintentionally produces a social benefit.
He criticized government regulations because they negated private decisions and hurt society as a whole.
It should be no surprise this theory fit well with the ideas expressed in the 1776 Declaration of Independence. Individuals should be free to pursue their own political interest, and in the process, produce a social benefit.
One hundred years later American voters began to see the limits of free markets.
Large banking, transportation and industrial corporations dominated the market place.
They used their size to drive out competition.
Two new political movements developed to protect Americans from corporate abuse. Populists wanted government regulation to protect rural areas of the country.
Progressives wanted to expand government regulation to protect urban areas of the country.
Both the Populists and the Progressives played an important role in taming these corporate behemoths.
Voters demanded city, state and federal governments protect workers and consumers from abuse.
Too often we take these legal protects for granted and allow politicians to remove those protections.
We then pay the price with faulty and even deadly products on the market. We must protect ourselves.
Glenn Melancon is a professor of history at Southeastern Oklahoma State University. He can be reached at glenn@glennmelancon.com. His opinions are his own and do not reflect those of the Jefferson Jimplecute.