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The Free Market Is Indomitable

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Deep in the November 14 New York Times report on the liberation of Kabul there was this perhaps little-noticed paragraph: “Food appeared plentiful. A central market that lines the road leading into the city had large amounts of fresh meat for sale, fruit juices from Iran and even Coca-Cola, a testament to the strength of smuggling networks in the area.” There were also reports that the shops in Kabul were filled with hitherto forbidden music CDs and movie videos. One man was selling satellite dishes.

Think about that. Afghanistan has suffered under horrible oppression for years (from communist, Northern Alliance, and Taliban thugs) and under relentless U.S. bombing for weeks. Its future is uncertain. Yet the moment there is the slightest respite and freedom sparkles, commerce blossoms as if out of nowhere, like grass growing through the cracks in the sidewalk. What greater tribute could there be to the entrepreneurial spirit of people? The markets are flush with goods. People acting in a market context exemplify the adage “Where there’s a will, there’s a way.”

People, under the right conditions, are amazingly resilient and life-serving. We often talk about “the economic system” as though it were a machine. Economists go into great detail, mathematical equations and all, describing it — without ever mentioning people! But economies are nothing but people coping with a world that is scarce in both resources and information. The free market is the best hope for contending with such a world.

Just as an economic system is nothing but people, so a free economy is nothing but people free to improve their situations through peaceful acts of production and exchange. If individuals are free in that way, something legally and morally significant is implied: namely, an environment in which individual rights — including property rights — are generally respected. Only in such an environment do people feel secure enough to create wealth. Creating wealth requires time and, because of uncertainty about the future, risk. No one will undertake investments if the returns are likely to be confiscated either by the government or by ordinary criminals. Individual rights create security and relative certainty and thus encourage the kind of actions that raise the living standards of the entire community.

No matter what the U.S. government does in Afghanistan when the war ends, that country will not prosper and find peace unless the Afghan people discover for themselves the benefits of property rights, free trade, and the rule of law. Some kind of government will no doubt be set up. But if it is powerful enough to interfere with peaceful pursuits, people will fight to get their hands on it, even if only for self-defense, and efforts to create prosperity will founder. Afghan society is not void of respect for rights. If it were, no one would have brought goods to market. But rights have to be institutionalized and extended to all people and all peaceful activities. That is the key to security and affluence.

The irony is that many would go in the opposite direction. They would see to it that individuals in Afghanistan (and everywhere else) do not have the personal freedom that distinguishes capitalist from noncapitalist societies, consigning them to perpetual poverty.

These socialists like to say that poverty and injustice are root causes of violence and terrorism. They are both right and wrong. They are wrong in believing that the prosperity of the West causes the poverty of the undeveloped world. Production and trade raise everyone’s living standard. The poorest of the poor have the most to gain from the globalization of capitalism. This doesn’t mean that people everywhere must embrace Western ways in every particular, only that if they want peace and prosperity, they will have to respect individual rights, including property rights.

The socialists are right, though, that people without prospects for a better future may feel there is nothing to lose by turning to violence. That doesn’t justify their violence, and not everyone who commits atrocities is poor. But recruiters for terrorism are likely to find it hard to sign up troops where prosperity is a realistic possibility. Contrary to the socialists, only respect for property rights can bring that about.

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Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.