Okay, time for a small history lesson. Yes, completely free markets work. However, they work in a way that most people hate with a passion; they work in a boom and bust cycle. Look at the nineteenth-century United States or the fourteenth-century Great Briton for examples. Hard work built vast empires of wealth, then hubris and greed destroyed the same empires. What I am talking about business empires, not political realms, while the political empires grew at the same time as the business’ they were at the time adjuncts.

The beginning of a boom cycle is great for everyone in the economy; businesses are growing, hiring, paying well to get motivated workers making their small am medium-sized enterprise grow as fast as they can. The leveling off period is almost as good, and pay is stable the large businesses are not hiring as many employees, but they are still doing well. Then the company decides to keep growing it needs more market share, so it starts buying competitors, absorbing its opposition in the market. Soon there are one or two significant players in any given market, and they start looking around an saying ‘why are we not making as much money as we could?’ This is the market state where ‘trade organizations’ or ‘Cartels’ come in, the few players in a market set the prices so they can all make money. Then they start cutting costs, reducing the quality of goods or pay to workers, forcing extended hours or replacing well-paid workers with people willing to work for less.

Eventually, some small, fast company comes along and undercuts all of the huge monopolies with a product that is outside their experience and drives them out of business. This last is what the proponents of ‘true free market’ all point to as the goal, ‘see everything works in the end.’ Except you never look past the ‘drives them out of business’ step. Let me pose a simple question. What happens right now today if Tesla had been as successful as Musk dreamed he could be? So, when Musk starts Tesla it manages to produce a great car that is both cheap, has a magic battery pack that lets it run 1000km on a charge and will charge overnight from a wall outlet not only that he can produce them in numbers rivaling GM at its peak. So everybody switches to Teslas, and nobody buys any other kind of car right? So the other car companies take a huge hit and start laying off workers right? What happens to the economy, it crashes like you haven’t ever seen before. Worse than the 2007–8, worse than 1929, worse than 1878. Because, nobody is going to buy a car from GM, Ford, Toyota, Nissan or any other car company if it looks like Tesla is making the only car that is worth buying. But once all the other car companies finish laying off enough workers to handle the new lower volume of sales they are getting, say 5% of their current customers stay loyal. There are now millions of people who are not contributing to the world economy, but Tesla isn’t in any shape to hire them yet. They are still ramping up to outproduce a single car company. Yes, other companies will start but in the meantime, the bottom falls out of the economy, and people starve or die of exposure in the winter. Take a look at the records of what boom/bust cycles were like before governments took action to stabilize the economy. They were not fun little rides like 2007–8, they were lethal for anyone who didn’t have either hard currency stocked away, a personal trade to practice or a large family to fall back on.

Now you may say ‘this never happens.’ Except that historically if you look at the periods of true unfettered capitalism — which are much rarer than you might think- this is precisely the pattern. Going back to the first hard currency, having free-flowing money without any controls is potentially short term great but long term it becomes a cycle that is hard to break.

I want to be clear there is no way that I am advocating for complete governmental control of the economy. There is a balance, but right now I think that the ‘no government at all’ folks are shouting very loudly without seeming to be aware of the downsides to the solutions they are proposing. Remember from 1950–1969 the United States had much more government control over industry, especially banking and areas that were considered ‘vital to national defense.’ Over the last fifty years, we have reduced regulation and taxation by a large factor. I realize that many people under 50 don’t believe this but go back an look at the books, with the exception of Environmental and Workplace Health and Safty regulation the government was much more intrusive during the ‘golden age of American Capitalism.’