A friend of mine recently asked me if I ever had a reason to question my convictions on free markets being ideal for the attainment of economic prosperity. Not only have I been able to speak on this issue while addressing several hundreds of college students in college campuses and diverse youth gatherings in Nigeria, my daily engagements have likewise been defined by these principles.
This question however, presents a refreshing moment of reflection on the practical workability, result-oriented and proven testimonials of free market-associated growth and development. And this reflection is what I’d decided to share today on the Voice of Liberty Africa project.
For proper understanding of the concepts of free markets and its workings, it is important to first clarify the proper role of government in the society, being the appointed, elected and/or imposed custodian of the public’s welfare.
Meir Kohn, a renowned professor of economics at Dartmouth College succinctly described the role of government in the society in these few words… “The only role for ‘government’ is to limit predation both of violent private actors and, even more importantly, to limit its own predation."
In other words, the proper role of government is limited to promoting a tolerant society through the protection of the rights to life, liberty and property of the people from internal and external aggressions, and most importantly, including itself.
How then does the free market evolve?
The ability of the people to freely express their numerous individual rights to life, liberty and property (as protected and defended by the government) solidifies spontaneous developments of sound institutions such as that of the rule of law which in turn enhances property rights.
Within the resultant freedom of non-coercive association, with solidified rights to your property lays the much needed foundation of the ability to freely exchange your property with other voluntarily consenting persons without any necessity for an introduction of aggression or force. The role of the government is to provide unbiased and non-partisan checks and balances in any possibility of force or aggression, which in the process enforces the supremacy of property rights.
This freedom of exchange however, births a plethora of consequences, many of which are vital ingredients to what we know as a free and just society.
Israel Kirzner, a highly revered New York University Professor of Economics unveils the foundational consequences of the freedom to engage in voluntarily exchange of goods and services in his 1993 lecture at a seminar in Aix-en-Provence, France where he divulged into Ethics, Entrepreneurship and How Wealth Is Created in the Society (See, http://www.libertarianism.org/media/video-collection/israel-kirzner-ethics-entrepreneurship).
Kirzner presents the picture of the rise of highly knowledgeable producers as entrepreneurs, operating at the advantage of an unacknowledged sheer ignorance of a consumer. Proceeding on the ability to freely exchange goods and services, a market expansion is initiated by deliberate actions of bold, imaginative, hard-headed, crude decision-making and future-foreseeing individuals (producers), and the spontaneous reaction of consumers which resultantly and spontaneously spurs market growth.
The innovative actions of these foreseeing producers translate into enhanced productivity and most importantly, an enlarged competitive market. This does not only fulfill the producer’s expectation through attendant profits, but also presents the prospective consumer with a varying number of product choices and interests.
However, how does the unhindered market activity produce wealth, prosperity, and a peaceful society?
Tom Palmer is a Senior Fellow at the Cato Institute and General Director of the Atlas Global Initiative for Free Trade, Peace, and Prosperity, an International Programs project of the Atlas Economic Research Network where he also serves as Vice President. A tireless scholarly worldwide advocate of the ideas of freedom, Palmer generously shares the story of his three friends whose economies and political landscapes have experienced quality increase in prosperity, peace and friendship. (See, http://www.youtube.com/watch?v=WnC4F2WrrU0).
According to his interviewed peers, a particular market in Kyrgyzstan employs about 30,000 people just in trading goods while also boasting of the largest market in central Asia. Another peer explains how the opening of Shanghai to trade activities has not only erected bridges of friendships with diverse people that visit for trade activities, but also effectively lifted many out of poverty into middle class levels of the society.
The incentive derived from private supply of a societal demand does not only incur moral profits, but also facilitates a friendly relationship between the parties involved which creates a trademark of peace.
Internal and external trade activities have over the years proven to be the decisive difference between beggar countries and the developed economies. For Africa, who boasts of the woeful majority of the former, there is never a time too late to renew a commitment to the proven principles of achieving continental prosperity through free markets.
From the internal trade liberation perspective, Tom Palmer believes the all-inclusive non-discriminatory participation of people in the market process effectively promotes a prosperous nation whose “wealth is to be measured then, not by the power of its rulers or the bullion in the state treasury, but by the access to wealth on the part of any randomly chosen member of it.” (See, http://studentsforliberty.org/after-the-welfare-state/)
However, infringement on the external freedom of trade across countries and regions is aptly analyzed in one of the most famous words of the French economist, legislator, writer and champion of Freedom through private property, free markets, and limited government, Frederic Bastiat saying “When Goods Don't Cross Borders, Soldiers Will.”
If African political and business leaders happen to still be contemplating on their new year’s resolution (as the custom was, and perhaps, still is), a dedication to the ideas of free markets in my belief will make an excellent resolution to the benefit of the people and the continent.
*Pictured Tom G Palmer*
Fiyinfoluwa Elegbede is a United States contributor to the Voice of Liberty Africa (VOLA) project
