In looking for people to hire, you look for three qualities — integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.

– Warren Buffet

What Is Free Market ?

The debate over market and morality is a long pedigree. Before we delve into the aspects of morality, let me define the term “Free Market.” It is simply an economy wherein the people have a right to choose a product, service or facilities which are not governed/instructed/ imposed by the government, rather it is driven by the forces of demand and supply in a free and fair competitive market where they can choose what they want to buy and use. Studying market dynamics and putting the free market economy to be tested on the terrain of morality has always been an obstreperous task which economists, policymakers & the social thinkers regularly confronts. Market freedom rests on the right of individuals to pursue their own happiness and to decide for them how to achieve it. The freedom of thought and action that lets people take charge of their own affairs entails freedom to exchange goods and services in an open market.

Effect On Society

Can we deny the fact that that free exchange and the expansion of markets is primarily responsible for the rise in living standards throughout the world when measured concerning access to things that make life better, easier, and even happier? Despite the fact that free market to a great extent has helped in poverty alleviation reducing discrimination and has been an agent of change for the socio-economic development, it has received huge criticism from the masses who believe that promoting free market will not only lead to capitalists taking charge of the poor and downtrodden rather its opponents strongly argue that promoting free market without the government intervention and command has the potential to reduce the moral fabric of the society. While questioning the morality of free markets and supporting their previous views, the opponents cite examples of financial crisis across the globe in the past and the market rigging scandals which have only added to the woes and has dented the faith of common people. In the book “Morality of Market” Leading Economist Amartya Sen has underlined the fact that inequity in the overall balance of institutional arrangement has been a major hurdle which produces unequal sharing of the benefits of globalization. The growth of rich has not been any hurdle to the growth of poor rather the difference lies in fact in the areas and sectors in which they earn their living, e.g., formal and informal sectors. Sen’s concern for equitable distribution of benefits of globalization would be more effectively addressed by granting more freedom to the vocations of poor than curbing the freedom of upper-class.

Role Of Government

Quoting James A Dorn from the Book “Morality of Market” The role of the government is not to legislate morality-an impossible and dangerous goal –or even to ‘empower people.’ The role of government to allow people the freedom to grow into responsible citizens and to exercise their inalienable rights. The foremost task of any government is to win the confidence of its citizens where they can trust their government. This will not only pave the way for effective policymaking rather the journey to implement those policies would be smoother which is in dire need to meet the changing tide of time. Thus, we can’t deny the fact that a free and fair market can promote competition which can take our journey of development to its destination.

Where Should Be Our Focus

I would also like to quote Warren Buffet here. He says, “In looking for people to hire, you look for three qualities — integrity, intelligence, and energy. And if they don’t have the first, the other two will kill you.” In a similar fashion, why can’t we have a market which rests on the bedrock of ethics and morality? In my opinion, the focus should not be completely on increasing the governance or intervention of the government. Instead, I believe that we must endeavor to end the parasitic state not intended to harm the poor, rather the purpose is to make them more liberated, aware and self-reliant where they could become able citizens to decide what is best for them and their interest. I agree with the views of Paul Cleveland and Jeff Tucker who has candidly explained in the book “Morality of Markets” on how business subsidies and antitrust laws are not only inefficient but immoral as well. Their views beautifully depict the image of the contradictory approach of the government which on the one hand is helping the business with subsidies while on the other hand regulating it through the antitrust laws.

That’s How We Grow

Agreeing to the views of these two scholars I am also of the opinion that if the businesses were not given any artificial and arbitrary help or privilege probably won’t need any laws to control their growth in a truly competitive market. Unnecessary government intervention and restriction will not serve any purpose instead will act as an impediment. Thus, I firmly believe that free markets are moral to a great extent and there should be a minimal intervention of the government that too only to the extent necessary for the legitimate purpose and welfare of the public at large.

Abhishek Ranjan is a Law Graduate and Research Associate at Department of Commerce, Ministry of Commerce & Industry, Government of India. 

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Abhishek Ranjan
Law Graduate and a Research Fellow at Department of Commerce, Ministry of Commerce & Industry , Government of India