FREE MARKET

Nuanced history of a notion that, while central dogma in economics, is in the eye of the beholder.

Through the influence of libertarians like Friedrich von Hayek and Milton Friedman, the free market today is presumed to be self-regulating, with state interference only harming it. But as Soll, a MacArthur fellow and professor of philosophy, history, and accounting, shows in this authoritative account, this is far from the views of early proponents of the free market. Cicero, for example, believed that a free market should be the natural outcome of well-meaning, well-educated agrarians coming together to trade justly, with the state aiding the process through the guidance of wise laws. This idea carried into the early modern period by way of intermediaries such as St. Augustine, who continued to view free trade as a species of ethics. “If God helped people do good, and if by their own free will they then were pious and nonmaterialistic, their possession of money and goods could be positive,” Soll glosses, before moving on to the greatest moral economist of all, Adam Smith, who “saw the free market as the product of a peaceful and even gentlemanly process of social and economic progress.” An influential precursor to Smith, Antonio Genovesi emphasized personal integrity and public trust as determinants of the value of labor and commodities, aided again by governments that advanced trade by providing protections against criminals, building roads and harbors, and the like. Conversely, Soll argues, von Hayek considered markets to be the arena of a battle between good and evil, the latter represented by the state. Friedman, whose name is most closely associated with the free market today, agreed, though it did not stop him from supporting unfree societies such as Augusto Pinochet’s Chile. Ironically, Soll concludes in this stimulating book, China is now a leading proponent of free market ideas, even as many Western powers turn to economic nationalism.

A cleareyed exposition of an important tenet of economic thought, with all its shades of meaning.