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  • Bob Burg

“[Burg] has demonstrated that adding value to people's lives is the way to climb the ladder of financial success.”

~ Fran Tarkenton, Hall of Fame Quarterback and Founder/CEO GoSmallBiz.com

Yes, The Free Market Is Fair. What Isn’t Fair Is…

September 5th, 2011 by Bob Burg

I recently received a Twitter tweet from someone who noticed that, within my profile, I mentioned being an “advocate of a Free-Market Economy.”

His tweet read…

“I support a free market as long as it’s fair.”

Then, indeed, he supports a free market. Because, a free market, by the very nature of the thing, is always fair. A free market simply means that individuals and companies are free to trade (or not trade) with one another. Nothing more; nothing less. The parties concerned trade money in exchange for products or services because they believe they are better off by doing so.

So, I replied, “A true free market is always fair. It’s only when government passes laws and regulations that favor some over others that it’s unfair.”

We have never had a truly Free-Market Economy. And, what we have in America today bears strikingly little resemblance to this concept at all. In a true Free-Market Economy, government’s legitimate function is simply to protect us from force and fraud, thus creating an environment where people are free to pursue their own happiness both in business and personally. The result is overall prosperity where the standard of living rises for the whole.

Posts on this topic tend to receive lots of responses from people who either appear to be anti-Free Market or — like my new Twitter connection — believe in mixing Free-Market with the benevolent (cough) control of government. But, I don’t think they are anti-Free Market. I think they equate the Free Market with Corporatism, which is when big corporations provide campaign donations in exchange for legislation that gives them an advantage over others.

That, of course, is very unfair.

I know, life itself is unfair. And, much of that we cannot help. However, if we understand it, we can keep the market fair. How? Simply vote out of office those legislators who sell favors to special interests.

Corporatism = Not Fair. Free Market = Fair.

47 Responses to “Yes, The Free Market Is Fair. What Isn’t Fair Is…”
  1. Hi Bob,

    You’re 100% correct. A free market allows EVERYONE to opportunity to get ahead based on his or her own values. One of the factors in determining whether an economy is fair or not is to look at the “licensing” of businesses. Too often business “licenses” are really a way of keeping OUT competition, much like the taxi medallions of New York where they cost hundreds of thousands of dollars, which keep out nearly all others from trying. In some states, it only costs a few hundred dollars to start a taxi company, meaning almost all lower income bracket people can start their own taxi company.

    When our government uses it’s force to interfere with my right to earn a living, then it’s wrong and needs to change.

    Thanks Bob.

    Kevin

  2. Bob Burg said at 9:51 am on

    Hi Kevin, thank you. And, yes, licensing is one of the most destructive elements of a free society. More often that not, it is used by those “already in” to keep others out by putting up significant barriers. Your example regarding taxi medallions is a fine one. Not only does it keep a poor person who’d like to open up their own business from doing so, it indeed keeps competition out of the market, resulting in higher prices and lesser quality. Yet, the false premise of licensing is that it protects the consumer. Absolutely not. A much better alternative than licensing is independent certification. This has actually proven to be much more effective and better for the consumer than has licensing. Your last paragraph (regarding government force) summed it up perfectly!

  3. beth ober said at 9:51 am on

    Thanks Bob for sharing this info! If we are to turn things around in our country it is essential that the masses of people begin to learn the truth about subjects like this! Keep up the good work! Our new L.I.F.E.business is going to do just that ! Reaching the masses with truth in all areas of life! We must come together and fight the media war! Thanks Beth

  4. Bob Burg said at 10:12 am on

    Beth, thank you for your kind feedback!

  5. Paul Puckett said at 10:45 am on

    Bob,

    Salient, considered, thoughtful, accurate, open, and insightful post. Well done as always!

  6. Bob Burg said at 11:05 am on

    Paul, thank you. That means a LOT to me!

  7. Brett Handler said at 12:08 pm on

    Bob, I like the premise and wouldn’t we live in a perfect world with no government interference in business. But alais we both know that isn’t our reality and most likely never will be. Don’t get me wrong, I am not negative on this subject, quite the opposite. Know our reality helps us work our preception of free market within a broken system.
    Use your taxi illustration. Only an idiot would fight to oppose the New York Lisencing system. Want to be a taxi driver, do it somewhere else. If you can’t find a better place to open a taxi buiness and raise a family than New York, the free market is the least of your worries.
    The fact that you can copy the New York taxi business plan and open up in Melbourne FL for instance is the reality of he free market. You will survive, thrive or fail on your own merit.
    The fact that in this country we have so many free market oppurtunities is our special gift. Knowing the reality of the government regulations, is the key to working the free market system to our benefit.
    Remember Bob, It is what is it is, and from my prepective it looks pretty good.

    Brett

  8. Bob Burg said at 1:03 pm on

    Hi Brett, I’m really not sure even where to begin. If we look through your comments line-by-line (I’m copying and pasting word-for-word), maybe we can look at some points that might begin a discussion based on reasons you can provide:

    Brett writes: I like the premise and wouldn’t we live in a perfect world with no government interference in business.

    Bob replies: No, we wouldn’t live in a perfect world. Perfection/utopia is not an option here. What is an option is making it the best possible situation we can utilizing methodologies that have proved to work above those that have proven to have very counter-productive results.

    Brett writes: But alais we both know that isn’t our reality and most likely never will be.

    Bob replies: You might be correct. We might go the way of Greece and other socialistic systems, or even worse and have total financial ruin. But why would we choose to just let that happen without fighting the good fight; in this case, doing our best to get things to the way they should be? If the system has gotten this messed up, we should try and fix it, should we not?

    Brett writes: Don’t get me wrong, I am not negative on this subject, quite the opposite.”Know our reality helps us work our preception of free market within a broken system.”

    Bob replies: It sounds as though you are saying, the system is broken, nothing we can do about it. Just accept it. I disagree with your conclusion to just accept it, but I respect your right to conclude what you’d like. And, when you say that it “helps us to work our perception of free market within a broken system” do you understand that you are suggesting we change our definition of something because the system is broken? Brett, you are suggesting that, instead of reality, we change our definition of a thing to fit within a false reality. How is that productive.

    Brett writes: Use your taxi illustration. Only an idiot would fight to oppose the New York Lisencing system.

    Bob replies: There is nothing reasonable within that. It’s simply an insult. Kevin and I both provided logical reasons backing up our viewpoints. You are welcome to disagree with our reasoning but to simply say that we are idiots, or that a person who is willing to provide a service to others (driving them around) in order to make money and support his or her family is an idiot … well, that serves no purpose to our discussion, other than to perhaps cause us to wonder why you are insulting us rather than providing cogent reasoning.

    Brett writes: Want to be a taxi driver, do it somewhere else. If you can’t find a better place to open a taxi buiness and raise a family than New York, the free market is the least of your worries.

    Bob replies: Again, there is no logical reasoning in what you just said. What do you mean, “Want to be a taxi driver, do it somewhere else.” Why? Maybe they want to do it in NYC where they live and where their home and family is and where they choose to stay. Brett, this is America. Some people take the “freedom and liberty” thing really seriously here. Again, I’m fine with your disagreeing, but please don’t use platitudes like, “if you don’t like it, go somewhere else.” Provide logic please.

    Brett writes: The fact that you can copy the New York taxi business plan and open up in Melbourne FL for instance is the reality of he free market. You will survive, thrive or fail on your own merit.

    Bob replies: Huh? You have lost me with that one, Brett. You should be able to open a business anywhere in this country (without jumping through unnecessary hoops) and survive, thrive or fail on your own merit. So, what is the point you were just making, and how does that disagree with my article.

    Brett writes: The fact that in this country we have so many free market oppurtunities is our special gift.

    Bob replies: We have many free market opportunities but far less than what we should have. And, the fact that so many have been taken away is what is a HUGE reason for the difficulties we are now in as a country. And, when you say it is a gift, let’s look at that. It is indeed a gift, but it is not a gift given to us by politicians. It is our RIGHT. It is an absolute right to open a business. And, the numerous and onerous rules and regulations handed to us via a government that are so often caused by bigger corporations and other special interest groups are denying people their right as individuals to prosper. I am simply not understanding your thought process and why you are defending this rather than using your mind and resources to help become a part of the solution. Instead, you are defending the status quo.

    Brett: Knowing the reality of the government regulations, is the key to working the free market system to our benefit.

    Bob replies: Again, I don’t even know what you mean here. It sounds as though you are saying, find a way to “game” the system and use it to your advantage. That doesn’t sound right. Of course, you could also simply be suggesting that we suggest what is, allow the politicians and those who buy them off to do their thing, and don’t bother trying to fix it. Which one of those are you suggesting?

    Brett writes: Remember Bob, It is what is it is, and from my prepective it looks pretty good.

    Bob replies: And the sand that the ostrich buries his head in probably looks pretty good to him while he’s doing it. But, that doesn’t mean it’s the most productive path to take.

  9. Idan said at 12:47 pm on

    Governments are a threat to the free market, but so do I.

    I am against child labour, I am for minimum wages. I am for government sponsored education, I am against working people to death.

    Because of this I don’t want a really free economy…

    In education I believe in adult guidance, and also that “a good teacher has bite marks on their tongue” as Alfie Kohn pointed out.

    In creating an economy I believe the same is in order.

    I believe there should be government guidance (as in restricting child labour), but also that the government should have “bite marks on their tongue”.

    I’m not sure I am writing well enough to get my point through. Ha-Joon Chang says it better if you are interested.

  10. Bob Burg said at 1:11 pm on

    Hi Idan, forced child labor (which is what I believe you are referring to) is not a sign of a free economy. One has nothing to do with the other. Regarding minimum wage, I simply don’t have time to do an entire writeup on it here, but not only does minimum wage put government in control over one’s business (which you obviously believe is fine) but it actually costs the jobs of many unskilled laborers who the business owner will now not hire. Again, to explain exactly how is beyond the scope of this space (though might make a good future blog post) but you can also search the Internet and find many excellent explanations. {Actually, just found one for you. One of many, but this will give you an idea IF you are truly interested. You’ll see what is really meant by “The Law of Unintended Consequences”…that an idea sounds very noble but the results often are not http://www.nwfdailynews.com/articles/wage-28091-killers-worker.html}

  11. Lisa Cree said at 1:40 pm on

    Bob,

    Again, I appreciate your ability to help us see the line of thinking in such matters and for making us think about what we say. One of the major problems we have is we (as a country and society) don’t understand and certainly haven’t been taught in our educational system what a free market is, what is capitalism, socialism, liberty and the lists goes on. We parrot what the media tells us with very little understanding. I still agree with Chris that you have another book to write. This stuff is so important. It’s the core to really making the change in the business arena. You have an audience that is listening and wanting to hear more of what you have to say because you are a teacher. Great post Bob!

    Lisa

  12. Bob Burg said at 3:26 pm on

    Hi all. Just back and seeing all your comments. Wow – thank you. I’m going to try and get caught up and respond to everyone; most likely it will be over a couple of separate posts, a few at a time.

    Lisa: Thank you, my friend. You and Chris *always* have kind things to say and you are greatly appreciated. Yes, I agree with you completely that, unfortunately, these terms are not understood in terms of their true definitions which makes it very hard for opposing sides to have educational conversations about it; typically, both sides are so busy making their points based on how they see the “thing” that they don’t think to ask the other how they even define the terms in the first place. Thus, understanding rarely occurs. And, schools and universities – in general – have not helped. A shame indeed.

    Beth: Thank you for your kind words. Regarding subsidies, they not only are wrong from a freedom perspective, and not only do they not work, but they usually have unintended consequences that so outweigh the good it would be comical if it weren’t so sad. Ethanol is just one example. All subsidies, in a free economy, would be done away with. By the way, they are also pretty much all political in nature. Just follow the money/political trail and you’ll be astounded. And both the Republicans and the Democrats are just as guilty. To answer the last question in your first paragraph, yes, they are absolutely antithetical to a free market. Regarding your example of the liquor licenses, yes, it’s ridiculous. It’s not the State’s business. Without even getting into whether or not a business should even need a liquor license (at best, it is just another tax. At worst, it’s a way to control who can and cannot do business) you are exactly correct – let the free market drive how many businesses should be selling liquor. Anything else takes power out of the hands of the consumers and producers and into the hands of the politicians and those who would grease their palms. Yes, it also stops new restaurants from opening which – again – aside from taking away people’s rights (to open a business) and choices (the consumers) it causes jobs to *not* be created that otherwise would be.

    Hi Eric, I certainly agree that a lack of thinking and personal responsibility goes down as government “nanny-ing” goes up. Let’s also not forget that the banking crisis and all those horrible, evil loans were not a matter of the “Free market gone wild” as so many people have been led to believe. It was Corporatism at its highest; government and Wall St. “in bed” with each other in a way that basically encouraged the banks to make these loans without fear of the loans not going bad (actually, knowing that so many would go bad). It’s like the government telling a banker to go to Las Vegas and spend $100,000 and, if you win, great. But, if you lose, don’t worry; the taxpayers will foot the bill. And yet, how often do you hear this fiasco blamed on the “Free Market” or “Capitalism.” What a shame!

  13. Beth M. Anderson said at 1:44 pm on

    I love your posts, as they always make me think! I don’t know a whole lot about the question I’m going to ask, but am thinking you can provide clarity. Do things like milk subsidies fit into what you would do away with? I know that milk prices in the US are artificially low, because it’s considered a good thing to do (can’t come up with the exact phrase my economist friend always uses when talking about this). Or are we talking more about things like the medallion program in NYC (which I do know about)? Do they all end up stopping a truly free market? Is there room to do one and not the other?

    My example I’m about to talk about could become controversial because it’s liquor licenses, but it’s just the one thing I can point to that I know a lot about in my town. Please let’s not get sidetracked on the morality of allowing a lot of liquor licenses.

    In the town in which I live they only have so many liquor licenses, as an example. That number is based upon population and is driven by state law, so the village is restricted by that. To me it’s ridiculous. Why not let the free market drive how many licenses are given out? I agree that the license is ok (while agreeing on the certification thing vs licensing that you talk about above) but why not allow everyone who wants one have one? This stops new restaurants from opening here because they can’t get even a beer/wine license “because we only have so many”. Also, people who have the few (total 7 for a tourist town of 900 people) we are allowed, keep them even if they aren’t making any money with it, so that someone else can’t get it from them. Thus stifling new business in town. Your thoughts?

  14. I go back to the adage that “What’s right is not always legal, what’s legal is not always right.” …….

    One of the challenges we have as a country is that many young people leave their parents & the school system without the ability to think for themselves. How many times did we see the excuse “I didn’t know my ARM (Adjustable Rate Mortgage) would adjust.” Huh? What part of adjust did you NOT understand?

    When you have so many of these folks getting themselves into trouble there will always be others who expect the government to come in and protect them. Thus we see laws & regulations for the lowest demoninator vs at the common sense level.

  15. Excellent post, Bob!

    Unfortunately, people define “fair” in terms of outcome rather than opportunities. A free market will always be fair in terms of opportunities but will not equally reward people in outcomes.

    Applying the principles you cover in your blog and book, those who give more value and provide better service or product will, in a free market, succeed at greater levels than those who don’t. That is true fairness.

    Most people don’t really want true fairness, they want regulated outcomes. When people desire regulated and equal outcomes, they vote in officials who will seek to regulate the results thereby creating a governmental dependence rather than self-reliance. We look to politicians to save us and care for us instead of asking ourselves what we can do to better provide for ourselves and our families.

    P.S. Really looking forward to meeting you in October at Make an Impact! I can tell we will have much to talk about! 🙂

    Cheers,
    Travis Robertson

  16. Bob Burg said at 3:37 pm on

    Travis, thank you. I agree with your comments and assessments all the way. Regarding your comment, “A free market will always be fair in terms of opportunities but will not equally reward people in outcomes”…that is very true. The cool thing is that in a true Free-Market Economy, even the poor are MUCH, MUCH better off than their counterparts in a more socialistic economy. It’s been said that in a free country, people are unequally well off. In a socialistic/communistic or more economically centralized country, people are all equally poor. Except the politicians, of course. Even in Communist Russia, you can bet the politicians at the top ate steak and lobster while “the people” waited in line for stale sausage.

    Steve, thank you. I appreciate that a lot! And, hello back to April, Steven and Nadia. I love your awesome Family!

    Monica, thank you. I agree with you all the way!

    Jary, exactly!!

    Luke, I appreciate your comments. Regarding where you wrote, “I had some similar thoughts last election along with a call for churches and community groups to put the government out of business in many areas by stepping up to really serve others and meet needs. I believe that would eliminate a lot of government meddling. Actually, it’s just the opposite; Government has, over the past 50 years or so, done a “first-rate” job of crowding out the many, many, many charities that always took it upon themselves to help the poor and disadvantaged. Remember, private charity is viewed by government bureaucrats as a threat to their jobs. I’ve written on this before and there are many excellent articles that make this point. Regarding what you said about politicians, yes…one of the worst things (in my opinion) is how we have now become a society of professional, life-time politicians rather than the Citizen Legislators that were envisioned by our Founders. The best scenario would be for people to serve out of a sense of public service, and then, after a few years, go back to their local communities where they then have to live under the very same laws as everyone else. Imagine, the amount of horrible laws that would not get passed if politicians knew they would actually have to live under those rules themselves?

  17. Hi Bob,
    I am with Chris and Lisa! It’s would be great for you to write about a free market!
    Another great post, thank you!

    April, Steven, and Nadia say hi!

  18. Monica Kile said at 1:59 pm on

    Bob, I am in total agreement with your comments. And Lisa, you nailed it when you said we, as a country, don’t understand what a free market is, or capitalism, or socialism, and the list goes on. I think the biggest thing we don’t understand about a free market is that a free market allows one the freedom to succeed and, also, the freedom to fail. Somehow, we seem to think no one should fail, so the government steps in to protect us from failure.
    I don’t want to wring my hands and cry like a Cassandra, not do I want to give up. So, I try to teach my children and hope they teach theirs. Plus, I pay attention to who wants my vote, and why.

  19. Jary Welker said at 2:40 pm on

    Bob, an excellent treatment of a crucially important topic, especially in our economically turbulent times. What a change we would see if a true(r) free market business environment really existed where government’s only function was “to protect us from force and fraud” and not tax and impose burdensome regulation. But many of us would also need to experience a paradigm shift in thinking accepting that government’s role is not to subsidize a business model that cannot be self sustaining if free market principles are honored. Your reasoned defense was spot on. Thank you.

  20. Luke Stokes said at 2:43 pm on

    Great post! My first time reading your blog which I found though Travis’ RT.

    I had some similar thoughts last election along with a call for churches and community groups to put the government out of business in many areas by stepping up to really serve others and meet needs. I believe that would eliminate a lot of government meddling.

    I have a question regarding voting people out. Do you have any resources you can recommend for tracking campaign contributions, commitments, voting records, etc? My concern is few people today treat public office as a sacrificial service to their country. Too many treat it as a career. It’s a lot to ask for a successful business person to leave their work and help straighten out the mess in Washington and I wonder how many are willing to take up the challenge. Unfortunately, most elections seem to be about choosing the lesser of two evils.

  21. Bob, wow! I feel like I just got back a college English paper. I obviously don’t express my feelings very well.
    First, I will apoligize for offending anyone, wasn’t my intent.
    Second I’ll clarify my position.
    I learned a great lesson that has served me well over the years. ” Some wait for the storm to end, while others learn to dance in the rain ” Now let me relate that back to our discussion. In this situation I am looking to do business in America the way it is today. I am not saying I wouldnt want the market fairer, I am just saying today it’s not. We all have a dicission to make.
    1 – We can spend our time protesting the injustice on blogs
    2- We can run for political office and try returning the free market
    3 – We can beat our head against the wall trying to get a liscence to drive a cab in New York.
    4 – We can learn to dance in the rain.

    Me, I am a dance in the rain kind of guy. I realize that there’re some things I can’t chage and many that I can. I am not against fighting for a better market system. I vote every couple of years for the
    candidates that I feel will help promote the ideals I want for my country. However, today I have to earn a living in this broken system with the economy in the tank. And guess what Bob, I am a home builder. Between large corporations controlling the scene and government regulation, I can write a book on the inefficiencies of the free market system.
    But contrary to your ostrich theory, I don’t bury my head in the sand. I am very aware of my environment and deal with it effectively every day.
    Better for me to spend time on the problems where I really can make a difference. I don’t mean to make this personal. You can google me if you need examples of where I feel I can make a diiference.
    Back to our issue. I believe too many of us use the government or the economy as an excuse not to follow our dreams. I wish everyone the greatest success in changing the system!
    As for me I will continue to dance in the rain, because I not see the storm ending anytime soon.

    Brett

  22. Beth M. Anderson said at 5:01 pm on

    Thanks, Bob. It helps a lot to understand more about all of this, and since it wasn’t taught in any school I attended (no college here, where I once thought they did, but am no longer sure) and until now I have only paid attention when it came time to vote. Now seems it’s more interesting to me, and I am starting to work out the “labels” for what I’ve always thought. Wonderful to have your dialogue with your followers, it’s so nice and clear!

    This comment… “Imagine, the amount of horrible laws that would not get passed if politicians knew they would actually have to live under those rules themselves?”

    Or maybe even having owned and run a business before they could run for office? Politics absolutely should not be a career, but a civic duty.

  23. Bob Burg said at 5:22 pm on

    Hi Brett, thank you for writing back. And, other than that one comment about “idiots” I didn’t find what you wrote offensive as much as difficult to comprehend in certain areas. And, a bit frustrating when you didn’t provide reasons but just made a statement of judgement. That aside, I believe I better understand your position with your current response. You are simply working within what the current situation is without worrying about changing it. And, that is your undeniable right. I disagree with your thinking in certain areas, which I’m sure is not unexpected. For example, when you say, “Some wait for the storm to end, while others learn to dance in the rain” the implication (if I’m inferring correctly) is that it will most likely change. And, when it does, to something more agreeable to you and me, then it will be better. But, for now, just go with how things are. Bret, I don’t believe it will change until we, the people are committed to it changing. Politicians and bureaucrats don’t change the status quo. It works just fine for them. So, let’s look at your points that you followed with; regarding our choices in responding to the current situation:

    Bret wrote: … I am looking to do business in America the way it is today. I am not saying I wouldnt want the market fairer, I am just saying today it’s not. We all have a dicission to make.
    1 – We can spend our time protesting the injustice on blogs
    2- We can run for political office and try returning the free market
    3 – We can beat our head against the wall trying to get a liscence to drive a cab in New York.
    4 – We can learn to dance in the rain.

    Brett, the reason we “protest on blogs” is because we can all – individually – do our part to educate others as to the current situation as well as the possibilities that are out there. You never know who will receive the message who is ready to receive it, and who they will communicate it to. Running for political office is certainly another choice. Elections are so costly and rigged within the parties at this point though, it’s difficult for someone who wants to upend the status quo to make it through all the guards. It’s still an option though and good when Liberty-minded people pursue it. Regarding beating your head against a wall to get a license to drive a cab in NY, that was not the point, Brett. It’s not that one necessarily wants to do that. Not the point at all! The point is that this goes on THROUGHOUT the country. This is a huge problem and those of us who hold Liberty as a core value and want to see our country embody that value need to speak out about it. Not just about our Liberty, but about Liberty and Justice for ALL. Regarding your fourth point? Sure, dance in the rain (i.e., profit in your business. I do that, and I recommend we all do) but look for ways you can repair the holes in the roof, as well.)
    I’m sure you do a lot of terrific things. I have no doubt about that. Keep doing what you feel is best. Where you say: “I believe too many of us use the government or the economy as an excuse not to follow our dreams.” Hey, I agree with you, but that is not what is being suggested in my post. I’m living my dream right now, and I suggest others do the same. But it’s not a “one OR the other” thing. Let’s do our best, let’s live our dreams, AND let’s do the very best we can to move toward the market-based economy that will benefit all people.
    Where you say, “I wish everyone the greatest success in changing the system! As for me I will continue to dance in the rain, because I not see the storm ending anytime soon.” I don’t see it ending anytime soon, either. At least without a lot of pressure from the citizenry. I’m just not willing to leave it at that. I respect your right to do as you feel best and don’t judge you for it. I’d ask you not to discourage others, however. Because if enough people simply pay no attention to it, not only will the situation never change, it will continue to get worse. Meanwhile, please always feel welcome to provide your opinions on this blog. All are welcome. Thank you again for taking the time.

  24. Jason said at 5:39 pm on

    What are the free market solutions for medical bankruptcy, basic city services like fire and police, and maintaining clean food, water, and air? How hard would it be to run your business if you couldn’t trust the civic infrastructure it’s based on? If I can’t ensure my health and security by myself, how free a man am I? The only entity that can protect me from big money interests would be a system of laws and government that works. The current system is corrupt to the core. But to dismiss the concept of government in the name of free market anarchy plays right into the corporate hands you disagree with. They would love nothing more than the entire population believing as you do. They have every intention of selling the concept of a free market in order to gain more control.

    This is where your argument breaks down. In order to bust up the corporations, you need a government to defend the laws it creates. Until we forcibly wrest the political influence of corporations, none of us will have a say in what the government does. You attack government as the enemy. What you fail to see is that government has become dysfunctional at the hands of corporate greed which came to power as a result of “free market” policies and legislation. Just go to K Street and take a look at how massive the corporate lobbying industry is.

    Nowhere in the world has a libertarian anarchy formed or succeeded. It is an untested philosophy that assumes we all have equal power over each other to keep each other in balance while we hypothetically get our needs met. What do you say about the people who will inevitably fall between the cracks and suffer simply because they can’t pay for themselves? God forbid you get cancer and laid off at the same time. Until something like that happens to you or someone you love, you won’t care about all the horror stories out there, will you?

    I cannot abide economic libertarianism because so many will behave badly over and over.

  25. Bob Burg said at 6:14 pm on

    Hi Jason, with all respect, I’m always a bit disappointed when someone reads an article I write calling for less government and – even though I always make the point that government absolutely has a legitimate function…to protect its citizens against force and fraud – someone will then accuse me of calling for some type of all-out anarchy with no government whatsoever, and saying that I’m am putting total trust in others with no laws to protect us. Please read the article again and, while you’re at it, please link to my other articles. I do an entire series on this and never do I call for an abolishment of government. We welcome everyone to share their opinions with us. Please make sure you read an article in its entirety first before writing so that you don’t write or imply something that is not at all congruent with what is written in the article.

    Here are some of the phrases you used in your letter and my responses in brackets:
    “But to dismiss the concept of government in the name of free market anarchy…” {I never called for anarchy}
    “They would love nothing more than the entire population believing as you do.” {Implying that the above is something I wrote, which I did not}
    “Nowhere in the world has a libertarian anarchy formed or succeeded.” {I never called for anarchy}
    “It is an untested philosophy that assumes we all have equal power over each other to keep each other in balance while we hypothetically get our needs met.” {Again, I never suggested anything of the kind}

    Now, let’s look at a couple of other things you wrote and my responses in brackets:
    “This is where your argument breaks down. In order to bust up the corporations, you need a government to defend the laws it creates.” {First, we already have more than enough laws and regulations. Doubtful that any more need to be created.Many need to be revoked. But, yes, of course we need government to defend the (Constitutional laws). They are there – as I’ve said numerous times – to protect us from force and fraud. Again, you are assuming that I’m in favor of some type of anarchy, which I never; I have never said nor otherwise implied.
    “What you fail to see is that government has become dysfunctional at the hands of corporate greed which came to power as a result of “free market” policies and legislation.” {No sir. Totally incorrect.” Government has become dysfunctional because we the people have allowed them to act outside the constraints of the Constitution and Bill of Rights. Give a bunch of politicians the power to abuse their power, and combine that with a bunch of business people willing to pay them off to do so, and it will happen. But, that has NOTHING to do with “free market” policies. I explained in the article exactly what free-market policies are. Where everyone has equal rights under the law, abuse of power does not happen.}

    Please pay very close attention to what you said here:
    “What do you say about the people who will inevitably fall between the cracks and suffer simply because they can’t pay for themselves? God forbid you get cancer and laid off at the same time. Until something like that happens to you or someone you love, you won’t care about all the horror stories out there, will you?”

    Shame on you, sir! Shame on you for implying that I don’t care about the less fortunate! You don’t know me, you don’t know what charities I support, or what I give to those charities and to those who cannot help themselves. I have also explained in other posts (which you have obviously not read before accusing me of not caring about the horror stories out there) exactly how to best help those poor unfortunate souls. And, while I don’t believe that government is the best answer (in fact, they tend to hurt a lot more than they help), that should certainly not be misconstrued as not caring. Of course, you did not misconstrue…you simply didn’t read it. You chose instead to go directly to telling me how much I don’t care.

    Jason, read my article again, and then your comments. And, then my responses. Let me know your thoughts. Please tell me where/if I have misunderstood you in some way. Please also let me know if you feel as though you might be incorrect in certain things that you wrote, based on what I actually wrote.

  26. Bob Burg said at 5:41 pm on

    Beth, thank you, my friend. I’m glad you’ve found the information to be helpful.

  27. Jason Miller said at 6:32 pm on

    Bob,

    I am relieved you are not an anarchist and that you do care about the less fortunate. And I’m glad you donate to charities. That is something most are not able nor willing to do to any appreciable measure. Therefore what are your positions on the following issues:

    1. Medical bankruptcy. What is your solution for this problem? Charities can’t take care of everyone because they simply don’t make enough revenue.
    2. Corporate personhood/charter. How would you propose we get control back from the corporations?
    3. Food, water, and air safety regulation and enforcement. How do you prevent the profit motive from harming people by contaminating their basic needs?

    I reiterated my questions from before that you didn’t address.

  28. Bob Burg said at 6:45 pm on

    Hi Jason. Again, with all respect, your being relieved with any of that is not my concern. And, until you fully apologize for every inaccuracy in your first letter as well as for your insult, I’m not interested in continuing this conversation with you. I’ve also answered every one of your above three questions in other articles. If you’d like to know my thoughts on these, please feel free to read my articles. They begin with the first one that I link to within the article. There is no reason for me to simply reprint the articles here. And, for the record, I disagree with what you say about donating to charities. I find the majority of people care about others and donate to charities in one way or the other, either through money or time or usually both. For you to say that “most don’t” is another of those things you seem to say without a logical reason for saying it or any proof to back it up. (Also, for the record, this is about as rude as I get, so please know you needed to have really offended me to get this kind of response.)

  29. Bob,

    This is one of the most terrific posts from you in recent months and especially the comments are awesome. Some of the posts and your precise and thoughtful responses are just marvelous.

    I really enjoyed reading this post and all the comments. I have learnt a lot about “Free Market” today!

    Thank you for this awesome post.

  30. Bob Burg said at 6:56 pm on

    Hello Snigdha, thank you so much for your very kind comments!!

  31. Heidi said at 7:27 pm on

    Hi Bob, So glad I took the time to read through almost all of this. I’m amazed at the way you sifted through some of the comments and replied in such a considerate and insightful way. I highly appreciate the views you shared as well. Your assessments are very wise and highly informed. Are you running for office? I’d vote for you!

  32. Bob Burg said at 8:15 pm on

    Thank you, Heidi. Very kind of you. Naw, not running. I appreciate your offer to vote for me though. 😉

  33. Randy Gage said at 9:36 pm on

    Bob, thanks for bringing logic and reasoning back into the discussion.

    -RG

  34. Bob Burg said at 9:42 pm on

    Thank you, Randy. I appreciate that greatly. And, of course, I recommend your Prosperity Blog for your many excellent articles and videos on this topic {visit http://www.randygage.com/blog/}

  35. Bob, you are right on here.

    If the process is voluntary and fair, the result — whether one likes the aggregate results or not — is “fair.” For instance, if oil shoots up in price via competitive markets in response to a crisis or shortage, perceived or otherwise, we might not like the result and may complain it isn’t fair. But it simply is what it is; in reality our complaint arises that we personally don’t like it, which is different than “unfair.”

    When you start weighing alternatives to the market process, you necessarily have to look to force (that is, violence or the threat of it) in order to pick winners and losers and that kind of behavior pretty much sums up the word “unfair.”

  36. Bob Burg said at 10:00 am on

    Philip, thank you. Great points throughout. I think your third paragraph says so much. It comes down to alternatives; freedom or government force. Freedom simply works better. I’d love for people who don’t understand that to just read your third paragraph again and again, and really make the effort to understand it. Government force is not only antithetical to a free society (again, as mentioned, other than to protect the citizenry *against* force and fraud by other individuals), government force in terms of picking winners and losers simply doesn’t work, other than for those who have bought the influence of government in the first place. And I don’t believe that’s what most people really want.

  37. Wow, what a great article and so true especially about Gov and big business. My wife and I have been listening to the audiobook of Sam Wyly: $1000 and an idea. He was telling how it took him many years to break break up the monopoly AT&T had and how the Gov backed the company for years which made it so difficult.

    I have been learning so much lately how there have been so much corruptness in history. Until listening to many thing I would have never realized how much the Gov can get into bed with business and how it affects everything in a bad way.

    If you haven’t listened or read that book, you should do it. WOW is all I can say about that. It has been very interesting especially how we are repeating the past and that is the scary part. many things he talks about that happened in the 70’s, I am seeing happen today which means we are repeating the past mistakes our country has made.

    Thank you for doing your part to waking people up. We all have to do something or we will lose everything.

  38. Bob Burg said at 7:11 pm on

    Hi Chris. Yes, you bring up an excellent point via Mr. Wyly that monopolies, by and large, are either government monopolies, government sponsored monopolies (i.e., the U.S. Postal Service) or government enforced monopolies (i.e. the old AT&T). Of course, many businesses have tried to become monopolistic but it is virtually impossible to do so without the help of government. Thank you for sharing with us, and for your very kind words.

  39. Ben McCann said at 6:30 pm on

    Bob, wow, great string of comments … I must say that I recently hosted former congressman Mike Sodrel at my office for a roundtable discussion on Business, Government, Politics, Religion, Economics, American History, our relationship with Israel, and much more. We also talked about his recent book by him entitled “Citizen Sheep, Government Shepherds”. I highly recommend anyone who wants to understand how Our Republic works, where it came from, what has happened, and how we got here. He is a self made businessman who owns multiple companies including onecalled “The Free Enterprise System” a motor coach company. Mike and his company are clients of mine and we frequently discuss the state of our nation economy etc… I have not met another human being who really understands and has put this complicated topical discussion into perpective so that anyone with an 8th grade education can understand. Attending this meeting included Jim Cockrum, the internets #1 most trusted expert and he just released his new book which can be found at http://www.101freemarketing.com 100% of the proceeds from this soon to be bestseller go to support. A project called Hope Lives Detroit a project that is making a difference by teaching at risk inner city youth and residents to rise above their local market conditions by becoming self sustaining entrpreneurs. More can be found at http://nonot1.com click on the Hope Lives Detroit link. If it can be done in Detroit, it can be done anywhere. I am so blessed to have friends like Mike and Jim just to name a few who dont just talk about this stuff,but are actually “all in” and put their money, time, and life where their mouth is.

  40. Bob Burg said at 7:12 pm on

    Hi Ben, thank you. Glad you’ve enjoyed the comments. Thank you for the information you provided. They sound like terrific people!

  41. Larry said at 11:15 pm on

    Hi Bob,

    There’s one more important point about a free or fair market and this is a symmetry of information. While more information is available to consumers today than ever before, even more information is available to corporations of individuals with large sums of money. This then gives rise to market power for the corporation over the consumer, in some instances. I give the mortgage crisis as an example. Banks were well aware of the risks inherent in the loans they were giving people, and assured people that it would all work out. These are banks that hire a small army of experts in statistics, economics, and computer programmers. There are very few people who can understand the risks they are taking on as well as a bank understands the risks the person is taking on. Yes, the individual has a choice, but the bank has more and better information and can use that information asymetry to its advantage.

    Another issue that needs to be worked out is the loss and rewards lie with the individuals taking the risks. While I don’t have a good answer to this, I do think there is a problem when the CEO of a company makes so much money that it really doesn’t matter to the CEO if his/her company goes bankrupt. I give the CEO of Bears Sterns as an example. As the risk he approved started to fall apart and the company failed, he was playing bridge in NC. He was 74 years old and had made something like $70 million a year for years. He gambled, maybe lost some pride, but is doing well.

    I’m interested to hear your thoughts on these areas as well.

  42. Larry said at 11:29 pm on

    Hi Bob,

    Just a comment on your comment on the Postal Service. I’ve been doing a lot of research on them lately and it seems to me that their problem isn’t so much of being a government sponsored monopoly. They receive no funding from the tax payers, nor are they a monopoloy since Fed Ex, UPS and DHL compete with many of their products.

    What I see is that the USPS was partially privatized – given partial freedom to run a profitable business but were bogged down with Federal Government benefits. The USPS has the mandate to be financially self sufficient, yet it has both it’s hands tied behind its back because Federal law dictates everything from business hours to what benefits have to be offered. As an example, they are the only company that I’m aware of that is required to fully fund it’s pension. A good idea, but not one that can allow it to compete with others who don’t have that requirement. Nearly 1/5 of it’s workforce is on Worker’s compensation. Worker’s basically retire on workers comp. No priviate company could support that. The result is that USPS pays twice as much per worker per hour as employees in similar industries. And guess what, there’s nothing USPS can do about it without a legislative change (and just a note, the same is true of other Federal agencies, only your tax dollars are paying for it). Here’s another kicker for you the US Dept of Labor administers the worker’s comp program for USPS (by law) and the USPS must pay the DOL it’s costs. Guess what happens if DOL shortens the length of time people are on workers comp or investigate fraud — they get less money from USPS and their program would shrink. The result, USPS can’t even control it’s costs if it wanted to.

    I’m not sure how to fix it, but USPS is basically designed to be uncompetitive.

  43. Bob Burg said at 10:01 am on

    Hi Larry, thank you for your two letters. Regarding your first one, in terms of information, please keep in mind (and, this is where we go back to premises) that the entire mortgage fiasco was caused by extreme government intervention in terms of *partnering* (Corporatism) with the banking industry. So, everything that happened resulted from that. Without that, the other things you mentioned would likely not even be an issue)

    Regarding your second letter, the U.S. Postal Service is indeed a government-protected monopoly. They are the only ones who can deliver actual mail (First Class and below). If a private enterprise tried to do that they would be shut down immediately and its principals thrown into jail for violating federal law. It’s also not accurate to say that it costs the taxpayer nothing because by not allowing competition, the prices are considerably higher than they would be. This is true in any monopolistic situation. In fact, that is the key benefit of having a monopoly; to be able to charge an above market price. And, actually, we don’t even know what the market prices should be because it is illegal to compete with them. And, another of the unseen drawbacks is that we also don’t know what innovations we’ve missed out on, simply because innovation is a natural result of free market competition. When there is a monopoly, there is little pressure to get better. Again, it was only *after* Fed Ex came along with overnight delivery that suddenly the Postal Service decided it was possible to do so. Before Fed Ex, there was no need. So, here we see that having even a small piece of their monopoly removed caused them to suddenly become a bit more innovative and customer-focused.

    It’s interesting and I think really deserves some thought…as mentioned just above, for the longest time, the government-sponsored monopoly USPS refused to even consider overnight delivery. Only AFTER a company came along and offered it did the USPS, feeling the pressure of a loss in market share, decide that it was actually possible. I think that right there teaches us so many lessons regarding the goodness of free minds and free markets.

  44. Eric Johnson said at 12:51 pm on

    Larry,

    Information asymmetry will almost ALWAYS benefit the business as it’s their business to know what’s going on. The consumer rarely knows what will be on sale next week, how weather may impact future product pricing, how new laws or regulatory actions impact supply & demand, etc. Thus we have that old axiom of “Buyer beware.”

    The federal government along with ACORN and other community groups were pressuring the banks to give (oops, loan…) money to people with bad or poor credit. Why did they have poor credit? The credit agencies had their track record of paying and many were lousy at paying on time. I agree that in many cases the banks were negligent in providing loans, in some cases they violated their duties to the borrowers and the investors. The point is the banks didn’t do things just because of internal profit goals. There were other players heavily involved in these decisions.

    The way to handle the USPS is to get Congressional claws out of it. Congress needs to give them full autonomy with limited oversight. Saturday mail delivery is a management decision and shouldn’t require Congressional OK. Price of postage and many other business decisions also fall into this realm too.

  45. Daniella K said at 9:55 am on

    Great article. I just read a similar article on youstand – http://www.youstand.com/news/82012/the-free-markets-are-fair-government-is-not

    Why don’t more people understand these concepts? Is it really that hard to get?

  46. Bob Burg said at 10:55 am on

    Daniella: Thank you for your comment. It’s not a difficult concept to understand once a person researches it even slightly *past* the surface. But, many people don’t. And, On the surface, unless one has at least a basic understanding of economics (which, should be correctly taught in schools but that’s another story), it may seem more intuitive to some to believe that big government is necessary and even capable of doing the job correctly. Of course, history has proven time and again that is not the case, but Santayana’s admonishment aside, society seems all to willing not only to not learn from the past…but to repeat it, as well.

  47. Abu Nudnik said at 12:30 pm on

    Great post. I had a conversation with someone the other day who talked about free markets v. fair markets. When she called up Adam Smith to support her, I scratched my head. It seems “fair market” is backformed from the concept of “fair market value,” which simply means an attractive price, the price at which a buyer says yes. Adam Smith would surely have meant “fair” to mean “attractive” and the concept is mechanistic, not moralistic.

    The reason why the fellow above was so confusing isn’t because he can’t write well but because he doesn’t actually understand the argument he’s espousing himself. The dead giveaway is to refer you to another voice. That shows him to be an acolyte. Acolytes need the comfort of groupthink.

    There’s another post online about “fair markets,” comparing free markets to boxing and “fair markets” to races with lanes. Government paints the lanes. But it seems to me that the boxing analogy is only applicable to failing technologies and ones about to become obsolete. When a third competitor doesn’t come into the system and a price war breaks out between the last two men standing it means they’re both being surpassed by emerging innovation. I’d be curious to know what you think about that.

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