The Free Market, Revealed and Defended (at last!)

Freedomnomics, by John Lott

Oh boy. Where to even begin with this book review? Let’s first ascertain whether Freedomnomics: Why the free market works and other half-baked theories don’t, stands up to its own title. Is it about “freedom”? No, not really. The book is a smattering of short “the author takes on” topical segments, not all of them having to do with notions of “freedom.” For instance, I am clueless as to what a justification of high gas prices and price gouging by hoteliers during a natural disaster have to do with “freedom.” Similarly, I don’t know, even after finishing this book, why fines for small-scale environmental polluters are advancing “freedom,” nor how a pension fund’s successful intervention in a lawsuit in order to preserve portfolio value ensures our “freedom” as opposed to TIAA-CREF's profits.

Perhaps “freedom” is a bad measuring tool; bad because we don’t know what it means. How about the rest of the title? “Why the free market works…” stop right there! Now, that’s an argument, yes? No. Not really. What does the author mean by “free market”? We can only assume he means the American free market, since there isn’t much else that would qualify anywhere else in the world, ever. Indeed the author, John Lott, PhD (twice referred to in this manner at the outset) tells us in the introduction that, as opposed to countries that he maintains tried True Communism in the 20th century and failed miserably, “countries that stuck with the free market have prospered.” The author apparently has confused American capitalism with a "free market." How unfortunate (and, I'll add, fatal to the whole project).

But he didn’t say “America.” In fact, Lott then proceeds to tell the reader that "Naturally, suspicion of corporations is paramount" when Americans consider their own circumstances, politicians “convene hearings to rail against oil companies,” and “(n)ewspapers denounce ‘corporate greed,’ arguing that the only thing keeping any big company from turning into another Enron is the watchful eye of government regulation.” There is no endnote to back these declarations and if you have lived in this country, watched a television, or read a newspaper in the last decade you know why: because those assertions are patently false. Which newspaper has argued that all corporations are little Enrons and that we need massive government intervention--was it owned by McClatchy or NewsCorp? I’m lost already—and that’s page 3. This bodes ill.

And then, suddenly, we are talking about the United States: “Is the US economy truly just a giant, Hobbesian free-for-all that encourages duplicity in our everyday transactions?” Who said it was? Who are you arguing with? No need for 200 more pages if it’s going to go on like this…oh no, he’s not finished! “For example, consider eBay, the Internet (sic) auction site. Even in its anonymous forums, sellers develop reputations by allowing customers to rate their transactions.” That’s it? eBay, an international cyberspace trading company, is your example of the “American free market” that proves its superiority? I give you animalporn.com. Game, set, match, good night.

Really, though, we both are and are not supposed to think of the United States while John Lott, PhD is writing. His endless use of “Some countries,” “many economists,” “those countries that did x,” and various other indefinite phrases, serve to muddy things up to the point that we can’t be sure what, exactly, he’s talking about. So, at times it seems Lott means “the United States” in a positive, look-at-our-free-market-economy way, and other times he means it in a look-at-our-overbearing-government way ("some people" will be confused by this praise/scold disjuncture in Lott’s thinking). Sometimes, he means “a typical, timeless middle class neighborhood,” and other times he means “corporations.” This last one, I think, is his real subject. Nearly every topic addressed in this book is seen from the point-of-view of the corporation as opposed to the consumer. This leads to all sorts of “why on earth shouldn’t the consumer pay more? It’s only natural to make a profit!” moments that really drive home the feeling that John Lott, PhD was raised in a bank by a sentient ATM.

This impression is made even stronger by the absolute absence of any sort of political comprehension on the part of the author. He has, apparently, never considered the thing we know as “politics,” nor does he show the least interest in what we might call “contextual facts” (he likely calls them “externalities”). So, for instance, Lott muses that politicians are far from beholden to their donors and financial backers, since they tend to vote the same way throughout their careers. The implications are, first, that politicians are therefore not phonies, because they really believe in what they’re doing. Charles Manson really believed in what he did, too. That didn’t make it good. But, Lott argues, politicians set agendas and then supporters come to them, not the other way around. Furthermore, he can prove this because retiring politicians don’t suddenly abandon their handlers’ agendas and switch votes to what they “really” believe in. You can see, can’t you, how awfully simple that is? It proves, QED, that there are no special interests in politics—just free market alliances of ideological soulmates.

Anyone who has had even minimal experience in politics—and you’d think Lott, a former American Enterprise Institute fellow, would at least have the courtesy to extend his readers this much credit—knows that that ain’t how it works. Why don’t retiring politicians go crazy and vote against all their donors’ interests? Could it be because they don’t ever really retire, but just become lobbyists? Could it be because they’re part of a caucus or party with a platform and an agenda larger than any one member or term? Could it because they don’t exist in a vacuum, at all, but have goals and plans that extend several decades into the past and future? Gee, I don’t know. What do you think? I’m starting to believe this fellow brought a knife to a gunfight; that is, he wants to be taken seriously as an intellectual but unfortunately he’s only a rather dim-witted number-cruncher.

John Lott, PhD personally assured me, on this very blog, that I’d find his book interesting and hard to classify as the work of a right wing ideological stooge. Well, you lose the bet, John, for having an argument that rests on the notion that profits are inherently good, rich people prove that, and poor people don't count. You also said your book "didn't hate America," but quite clearly, you DO hate America: you hate and fear black people, female voters, the government (which IS actually the political arrangement named "the United States of America"), and people who don't want to own guns, get married because of an unplanned pregnancy, want lower prices for life-saving drugs, and equal protection under the law. These are groups you positioned yourself against in your book, and then you tried to justify them with numbers that are, at best (at best!) disputed by other economists, not to mention academics and activists across the intellectual and social spectrum.

Also, a writing tip: the introduction of a serious scholarly tome has but one purpose and that is to justify the reader’s attention. Not only does Lott utterly fail to support his title argument—he didn’t establish that there even is, or ever was, a “free market,” nor did he discuss except in the abstract any other, “half-baked” theories—but he signals that the book itself will be a compendium of random replies to the book Freakonomics, which I haven’t read. Hell of a strategy: write a book to reply to another book. Have you heard of the telephone? You know the last names of the authors of Freakonomics, why don't you call them?

Lott basically insults the reader’s intelligence by taking the role of corporate defender/apolitical naïf (for just one more example, he discusses the gas shortages of the 1970s at length and NOT ONCE does he mention the Middle East or US policy towards the Middle East. I am serious.). This just will not do. It left me to ponder just who the intended audience of this book is. People who read Freakonomics? Why would they read this shoddy reply? Republicans? Libertarians? Given its utter lack of understanding or sympathy for the working classes and unabashed endorsement of corporate rights and wisdom, I'd say this book was written either to fulfill Lott's publishing obligation to AEI or the Hoover Institute, or else it's supposed to be read by the very wealthy to reinforce the idiotic notion that working class America is composed of a scary, ethnic, greedy, criminal rabble. But the thing is, even I don't believe wealthy Americans would read this tripe. It's just too poorly done to be anything but embarrassing.

So much for the introduction. Let’s do chapter 1 next!

On second thought, let's not.