Will Free Markets Ruin Society?

I am a staunch believer in free markets. But that isn’t reason enough for you to be convinced. Let’s instead consider a recent study in this field. Let us consider what some experts have to say regarding whether free markets will ruin society:

NO, says Professor Jagdish Bhagwati of Columbia University.
Author of In Defense of Globalization, Bhagwati is Senior Fellow for International Economics, Council on Foreign Relations in the US. According to Bhagwati, many free market critics say that free markets will lead to increased child labor and gender inequality. However, his book reveals that the results may be just the opposite.

It is usually believed that poor peasants, on being given more lucrative economic opportunities, would put their children to work so as to reap higher profits. Bhagwati discovered that the truth was contrary to this belief. Farmers in Vietnam actually encouraged their children to continue studying, as they no longer required the little money that a child’s labor would produce.

Bhagwati also believes that a free market economy would reduce gender inequality. When industries face international competition, they are forced to abandon pro-male prejudices. In fact, under the constant pressure of operating more efficiently, they would have to make a shift towards cheaper labor. This will encourage employment of women and finally boost wages to them.

NO, also says Qinglian He, former senior editor, Shenzhen Legal Daily
Qinglian He has authored The Pitfalls of Modernization: The Economic and Social Problems of Contemporary China. She believes that free markets stimulate both economic and social progress and, in the process, strengthens moral character. On the contrary, people in a socialistic society are prone to be corrupt given the high possibility of economic stagnation in these societies.

She says that, while the Chinese market economy may not be perfect, the flaws are a result of the actions of human participants and not the system itself. Qinglian He adds, “…a free market is closely associated with a free society”. Those living in free societies are better equipped to improve their lives, since such a society offers people greater opportunities to make their socio-political systems more impartial. In other words, all activities are geared towards the greater good, which supports morality rather than corrupting it.

History has shown that government fiat cannot eradicate child labour. Ban child labour and child labour will still be employed, with government inspectors taking bribes, be it China or be it in India. Markets, when they are free, lead to prosperity – be it the US, Europe or Honkong and Singapore. Prosperity results in parents having enough – when they do not have to make their children work, children are withdrawn from the workforce.

More bans results in children being employed in begging rackets, prostitution or sweatshops with the active connivance of government officials.

The way to end many of our ills, is through free markets and the resultant prosperity.