Guide to libertarian economics part 1: the Free Market
There is no single authoritative document, like the Bible or the Constitution, which explains libertarian economics. Rather it’s a synthesis of what conservative libertarian types (libertarianists) are currently saying about economics. Libertarian economics is an evolving concept, and what someone said about it fifty or a hundred years ago is not necessarily relevant to the current understanding of it. Because it’s a concept and a religion rather than a real science, detailed technical knowledge of economics isn’t necessary for one to be a True Believer.
THE FREE MARKET
The thing most venerated in libertarian economics is the “free market,” much like the cow is venerated by Hindus. Hindus believe that the cow is representative of divine and natural beneficence, and that is how libertarianists view the “free market.”
But despite the libertarianist worship of the “free market,” it’s not actually defined very clearly. When libertarianists talk about the “free market,” they simultaneously mean a market that is not regulated by the government, and the belief that in the absence of government regulation, prices will be set by supply and demand and by competition, and “economic growth” will be much greater than in a regulated economy. Just as Satan is the embodiment of evil to Christians, government regulation (including taxes which are an especially hated subset of government regulation) are the embodiment of evil to libertarianists. And just as Heaven is the reward for being a good Christian, “economic growth” is the reward for being a good libertarian.
There is no scientific proof that all government regulations are bad, or that we would all be better off without government regulation. It’s accepted by libertarianists as a matter of faith, just as Christians accept the divinity of Jesus as a matter of faith. In fact, I strongly disagree that competition is the natural result of the absence of government regulation, especially in the modern economy which is based on mass marketing and intellectual property. It should be noted that the entire field of economics is heavily based around the study of the economy of the 18th century, an economy which no longer exists.