Skip to navigationSkip to content

Just in time for the Indian budget: The real definition of free markets

Children play during the trading day on the floor of the New York Stock Exchange.
Reuters/Brendan McDermid
Bring it.
This article is more than 2 years old.

This post first appeared on The India Uncut blog.

Imagine one day god comes down to earth. He’s an old man with a beard, hanging out in the clouds, and he latches onto the wing of a plane and sits there, cross-legged, until the flight lands. A communist man who took a reclining-emergency-row window seat for the legroom has to be taken off the plane on a stretcher, for he faints after seeing 1), a gentleman who is obviously god on the wing of the plane, and 2), the T-shirt god is wearing, which says, in fluorescent pink letters, ‘Free Markets Rule.’

God is instantly met by waiting paparazzi, and an impromptu press conference is convened. “Oh god,” says an overwhelmed young lady, who appears to be on the brink of orgasm, or something equally divine, “Oh god, please tell us: why that T-shirt?”

 Listen up, here come some basic truths about economics that are really just common sense.

“I was hoping someone would ask me that,” says god. “Or rather, I made you ask me that. This is why I have come down here. You should know that I’m a bit of an efficiency buff. I made the universe, and then the earth, and then amoeba and fish and monkeys and all you folk, but the thing is, I was not much into micro-management. The universe is full of tons of shit, and fine-tuning every small aspect of each creation would take eternity. And while I do have that much time, why sweat the small stuff, so I decided to just put systems in place and take a nap.”

“When I went to sleep, there was primordial ooze. I put natural selection in place, and as I slept, evolution happened. I knew that something like you humans would eventually evolve, though I must confess I couldn’t have anticipated Honey Singh or Kim Kardashian. Anyway, I put systems in place for you folk too, so you could reach your optimum levels as a species, in the pursuit of happiness. But when I wake up I find, hey, what’s going on here, the most beautiful, elegant aspect of my creation, which was meant to help you reach fulfilment, is being maligned. I’m talkin’ about free markets. So here I am, to put the record straight, and to set you on the right track as a species. So listen up carefully, because I won’t be back to repeat this.”

“Oh god,” says the young lady we have already met, on the verge of rapture. “Tell us everything. Oh god!”

“Right,” says god. “Listen up, here come some basic truths about economics that are really just common sense, but you may consider them divine revelation if you wish.”

One: Life is a positive sum game. Every time two people make a trade, they do so because both of them benefit. One of my blessed children, John Stossel, illustrated this by coining a phrase, ‘Double Thank You Moment.’ You buy a cup of coffee, and as you pay for it and take the cup, you say to the guy behind the counter, ‘Thank you,’ and he says the same thing to you. Two thank yous! And indeed, in every single transaction that takes place across the world, both people benefit, or they wouldn’t have entered into that transaction. This is how productivity goes up, how the amount of value in the world rises, how societies grow prosperous. For my sake, think about how drastic progress has been since the 18th century, when free markets started becoming common. Look at the two Koreas, identical once upon a time, and now so different because of the different paths they chose. And listen up, listen up, to what I say next—

Since every trade leads to both parties benefiting and value being created in the world, anyone who comes in the way of free trade anywhere is sinning. Yes, you heard me, it is a sin to get in the way of free enterprise. Tariffs and duties are evil, and regulations and License Rajs are man’s way of trying to play god. Don’t you dare!'”

 The rich can only get richer if the poor also get richer.

Two: Business is better than charity. Given what I told you above, how does a human being make money? Only by increasing the value in the lives of other people. Put another way, you can only enrich yourself by enriching others. That is exactly what business is. You make money by giving people what they want. The more value you create for others, the more value you create for yourself. Thus, it’s nonsensical to speak of a system where the rich get richer and the poor get poorer. In a free market, that’s not possible. The rich can only get richer if the poor also get richer.

And this is why I consider businesses better than charities. Both aim to help others, but the survival of businesses depends on their ability to do so, and I like those incentives better.”

Three: Money trickles up, not down. No respectable economist has ever spoken of trickle-down economics. There is no such thing. It is a straw man. (You are all like straw to me, but never mind that.) In a free market, money trickles up, not down. In a business, it is the suppliers and the workers who get paid first, and the consumers who get served, and only then, right at the end, do the owners make any money. They are at the end of the chain. Ask anyone you know who runs a business how it works.”

 Established capitalists are the ones who have the most to fear from competition.

Four: Capitalists are among the biggest enemies of capitalism. Raghuram Rajan, a man I created in my own image (aren’t I handsome?), once co-wrote a book titled ‘Saving Capitalism from the Capitalists.’ Note that sentiment. People often think that defenders of free markets are defending the actions of evil capitalists and big businesses gaming the system. Wrong. Established capitalists are the ones who have the most to fear from competition, and they are the ones who lobby governments to manipulate markets in their favour. To take an example, look at India. When India gained Independence, a group of its top businessmen came up with something called the Bombay Plan, which was their vision of what the economy should be like. They wanted an interventionist state, with plenty of regulation and many curbs placed on free enterprise. Historians have presented this in support of the argument that hey, even capitalists wanted unfree markets, so free markets can’t be all that great, right? But think about it: of course the entrenched businesses would want government to keep out competition. Like, duh!

So beware of crony capitalists and the governments they partner with. And every time a new regulation or tax or tariff is introduced, consider who it is likely to benefit.”

 Embrace freedom—and question everything that your governments do.

Five: Government is a false god. It offends me when people have blind faith in entities other than me. Like government. Governments came into being to serve the people and protect their rights, but instead, have ended up ruling the people and infringing their rights. Think about it, if any individual or group of people forced you to pay a third of your income every year to them, which effectively meant you were enslaved to them till April every year, you’d be pissed, and would correctly call them thieves. If they regulated all your activities, curtailed your freedom even when you were causing no harm to others, and took a cut of all your purchases, you’d feel that a mafia was running your life. But when an entity called government does all this, and sanctimoniously tells you that this is for your own good, and it’s your duty to obey it, you somehow accept it. And furthermore, you expect it to be the solution to all your problems, even when the biggest problems around you are caused by government itself. What a con job!

The biggest force in human progress over the last few centuries has been free enterprise. And the biggest enemy of free enterprise—indeed, a sinner in my books is government. And yet, you worship this false god, while forgetting all about me and the beautiful, natural system I put in place for you, tailored perfectly to human nature. So here’s a commandment for you: Embrace freedom—and question everything that your governments do.”

We welcome your ideas at

📬 Kick off each morning with coffee and the Daily Brief (BYO coffee).

By providing your email, you agree to the Quartz Privacy Policy.