18/11/2017 download
10/10/2017 Install 4
10/10/2017 students pano

What is free’ in Free Market Economics?

The fallacy of free market economics is quite obvious, but still worth spelling out: The person who comes to the free’ market to buy labour is indeed free to choose the best/cheapest on offer. If for instance, I run a coffee shop, I am free to employ the barista that will generate the most profits for me. I am free to fire the person currently working and hire a better/cheaper worker instead. On the other hand - and this is the crunch - if I am in the market to sell my labour, I don’t have the freedom of not selling it, because without wages I will not have resources to support my physical existence. In other words, while on the face of it both the employer and the employee are free to enter a contract, in practice this freedom extends to the employer only. The employee is of course free to reject an offer of employment, but in that case they will be denied the means of sustaining their physical existence, therefore the only real freedom available to the employee in a free’ market, is the freedom to perish.

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