In a BBC News feature, the School of Oriental and African Studies’ Dr. Damian Tobin analyzes the correlation between China’s economic growth and “amplified … disparities between rich and poor.” Alluding to “[t]he privatisation of state enterprises,” Tobin implies that a move away from considerable state involvement in and planning of the economy is to blame for China’s “dangerous levels of inequality.”
The idea is that although something like “free enterprise” generates growth and “private wealth,” it is insufficient on its own — i.e., without the state — to moderate or equalize wealth levels among the population at large. But while Tobin is right in seeing something very wrong in China’s economy, the problems he sees belong to statism as opposed to a genuinely free market.
An authentic free market system is not only the economic mode consistent with a respect for human life and labor, but is also the means to a just distribution of wealth. As opposed to the state-influenced and -shaped economic program we have today, a freed market would be one without special privileges and subsidies to favored corporations — without the state choosing winners and losers.
Where today one can trace a correspondence between the size of an industry and its army of Washington lobbyists, a free market would have no unfair advantages to lobby for. An incestuous pay-to-play game of monopoly, one where some hope to enlist the state’s coercive power to foreclose true competition, is inherent in the incentives created by authority.
It should come as no surprise to us that when systematic violence is introduced into the economic sphere, it is the rich and powerful rather than the poor and powerless who ultimately profit. Although concern for the impoverished and for the worker are today associated with advocacy for an omnipotent, total state, the state has never truly been the ally of the disadvantaged and victimized.
The state is rather an organ of the power elite, a grouping of economic interests that aspire to close off options outside the statist economy. Whatever the state does that seems facially to aid the poor is done only to keep the labor engines of the economy running so that the oligopolistic corporate economy doesn’t destroy itself.
The myth of the state as saintly helper is especially menacing for people like China’s workers and farmers. Writing in 1850, French free market economist Frederic Bastiat described a struggle created by the state, one in which everyone “direct[s] his efforts toward contributing little to, and taking much from, the common fund of sacrifices.”
Wondering rhetorically whether it would be “the most unfortunate who gain in this struggle,” Bastiat answered, “Certainly not, but rather the most influential and calculating.” He understood that state interference in the economy, though marketed with populist language, was a thoroughly elitist endeavor. The free market, on the other hand, is decidedly not built for towering monopolies and filthy rich flaneurs.
In China, it is the toiling masses who suffer from the state’s disfigurement of the peaceful, voluntary trade economy, not the wealth-hoarding tycoons. The truth, of course, is that we have yet to see what kind of wealth distribution a free market would produce.
We haven’t seen a free market operate in China, where the present incarnation of its new, nominal “free enterprise” finds state coercion infecting nearly every living cell. Market anarchism can demonstrate, though, that today’s concentration of wealth in the hands of the very few is a symptom of a walling in process undertaken by the state for Big Business.
Wealth disparity like that in China requires the active participation of the state. To remedy that disparity in turn requires the slow elimination of the state through mutually beneficial trade and cooperation; that’s what we mean by “free market,” and that’s what China — and the rest of the world — needs.
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