John Singleton with Bob HowardRip Van Australia (Stanmore: Cassell Australia, 1977), pp. 31-33, under “Capitalism.”

This is one of the more misunderstood terms in existence today, being used to describe everything from a total, genuine, laissez-faire free-market to a modern welfare-warfare-bureaucratic-State, such as exists in the U.S.A. and Australia (for Great Britain see History).

The differences between a genuine free market and the capitalism of today are much more than a mere difference of degree. There are, it is true, many similarities, but the differences are fundamental and crucial. Because of these differences, anyone who supports genuine free market economics is as much opposed to modern Australian “capitalism” as the most ardent Marxist.

The only “capitalist” economist that most people have heard of is Adam Smith, and in most arguments over the validity of free market economics, it is to his theories that reference is made. This is a most unfortunate, even if understandable, situation.

There is in existence a vigorous school of economic thought, called the “Austrian School” that has developed the body of pure, free market, economic thought far beyond the work of Adam Smith. There is no denying the importance of Adam Smith, just as in physics one cannot deny the importance of Sir Isaac Newton. But we can no more base a final judgement of free market economics on Smith than we can base a judgement of physics on Newton.

The great historical figures of the Austrian School of economic thought are Carl Menger, Eugene von Böhm-Bawerk, and Ludwig von Mises. They form what could be called a “neoclassical” school of economic thought, which kept many of the great ideas of the previous school of Adam Smith and David Ricardo, but also made many changes, some of which were quite fundamental.

We have neither the competence nor the space (especially the competence) to go into the details of these two schools of thought. But we do believe it is necessary to at least point out that this distinction does in fact exist.

Interest in the Austrian School is growing all around the world today — particularly in the U.S.A. Notable adherents of this school of thought are the 1974 Nobel Prize winner, F.A. Hayek, and Murray N. Rothbard, libertarian economist, historian and social theorist.

There has never been a genuine free market economy anywhere in the world. There have only been some close approximations — notably England of the late eighteenth and early nineteenth century, and the U.S.A. of the nineteenth century.

Certainly the system of no government in business and no business in government has never been allowed to operate in Australia.

Insistence on the distinction between a real free market and what is usually passed off as one should not be dismissed as mere nitpicking, for it is a central contention of the Austrian School that it is government intervention that has always existed in some degree that is to blame for the economic problems all so-called capitalist societies suffer today. In other words, when the natural free market forces cannot operate because of legislative restrictions, dislocations in the market cease to act as signals of trouble, and become instead, institutionalised transmitters of trouble. Free market prices, for example, act as a barometer measuring the balance of supply and demand. High demand and low supply will push the price barometer up, and send a signal to suppliers and investors to increase supply. Their motivation for acting on the signal is the prospect of better profits. And obviously, the reverse also holds true.

However, when prices are fixed by legislation, this system can no longer operate. The connection between supply and demand has been severed, so that the relative balance of supply to demand is no longer indicated by the price level. It is, therefore, not only necessary to control the price, but also the supply and the sales. If the price was fixed artificially high, then suppliers, unless controlled, would rush to supply as much as they could in order to benefit from the high prices, but the buyers, on the other hand, would react to the higher prices by buying less, and the result would be a glut.

The reverse again holds — artificially low prices mean fewer people interested in supplying the product and more people wanting to buy because of the low prices, in which case the result would be a shortage.

When the price is fixed at the “right” level, the supply and demand balance out. But this “right” level is the market price — which is where it would have been anyway on a free market.

This same situation can result if, instead of fixing prices, the supply, or the demand, are fixed by legislation (as, for example, the supply of milk, eggs, doctors, taxis, are fixed today). When the supply is fixed, what is created, in effect, is a coercive cartel. The people or organisations within the cartel are able to exploit the consumers by raising their prices, or reducing their service, or both. By controlling the supply and the other suppliers, they are thus immune from competition. The high prices, or reduced service, would, in a free market, act as a signal, indicating that there was a supply demand imbalance. (The reduced service would create a demand for a better service.) In the fixed cartel, these signals no longer operate. Instead the reduced service or high prices transmit trouble, for example, the high prices raise costs and hence prices in associated industries go up, causing such trifling problems as unemployment and bankruptcies. This inevitably leads to a public outcry and demands for — you’ve guessed it — more controls and legislation; thus ensuring more institutionalised dislocations.

This is not meant to be a detailed or an exhaustive analysis of all the factors or all the possibilities existing in these cases. Rather, it is simply meant to illustrate a simple principle: that it is not possible to plan and control a market so as to improve on the free market, but it is possible to make it a hell of a lot worse. One has only to look at the situation existing today in Australia in the milk and egg industries to see very good illustrations of this principle.

A free market will always tend towards equilibrium. It is a stable system. A controlled market will only work if it precisely mirrors a free market — in which case it is totally unnecessary. Any other form of controlled market merely institutionalises distortions and dislocations which reverberate throughout the economy, creating more and more distortions and dislocations as they go.

The market controllers thus become involved in a continuous process of patching up these holes as they appear, but because they always seek to patch by adding controls, they generally create at least two holes for every one they patch.

We see the results all around us — a progressive increase in bureaucratic control, more and more red tape, prohibitions, regulations, quotas, subsidies, tariffs, boards, etc., etc. —and on top of it all, more, not fewer, problems. A controlled economy, in other words, is inherently unstable.

A proper free market is consistent with individual freedom. Today’s so-called capitalism, is not a free market system — it is a system of privilege, a controlled market, and as such, is not consistent with individual freedom.

The free market economists as well as the Marxists, recognize the evils, in this regard, of today’s “capitalism”, and equally deplore them. But, these evils are not the fault of a free market, because the market is no more free than you and us. And we’re not free, we’re just going cheap.

(in order of appearance on Economics.org.au)
  1. Governments Consume Wealth — They Don't Create It
  2. Singo and Howard Propose Privatising Bondi Beach
  3. Singo and Howard Speak Out Against the Crackpot Realism of the CIS and IPA
  4. Singo and Howard on Compromise
  5. Singo and Howard on Monopolies
  6. Singo and Howard Support Sydney Harbour Bridge Restructure
  7. Singo and Howard on Striking at the Root, and the Failure of Howard, the CIS and the IPA
  8. Singo and Howard Explain Why Australia is Not a Capitalist Country
  9. Singo and Howard Call Democracy Tyrannical
  10. Singo and Howard on Drugs!
  11. Simpleton sells his poll philosophy
  12. Singo and Howard Decry Australia Day
  13. Singo and Howard Endorse the Workers Party
  14. Singo and Howard Oppose the Liberal Party
  15. Singo and Howard Admit that Liberals Advocate and Commit Crime
  16. Up the Workers! Bob Howard's 1979 Workers Party Reflection in Playboy
  17. John Whiting's Inaugural Workers Party Presidential Address
  18. John Singleton and Bob Howard 1975 Monday Conference TV Interview on the Workers Party
  19. Singo and Howard on Aborigines
  20. Singo and Howard on Conservatism
  21. Singo and Howard on the Labor Party
  22. Singo, Howard and Hancock Want to Secede
  23. John Singleton changes his name
  24. Lang Hancock's Foreword to Rip Van Australia
  25. New party will not tolerate bludgers: Radical party against welfare state
  26. Singo and Howard introduce Rip Van Australia
  27. Singo and Howard on Knee-Jerks
  28. Singo and Howard on Tax Hunts (Lobbying)
  29. Singo and Howard on Rights
  30. Singo and Howard on Crime
  31. Singo and Howard on Justice
  32. Singo and Howard on Unemployment
  33. John Singleton on 1972's Cigarette Legislation
  34. Singo and Howard: Gambling Should Neither Be Illegal Nor Taxed
  35. Workers Party Platform
  36. Singo and Howard Join Forces to Dismantle Welfare State
  37. Singo and Howard on Business
  38. Singo and Howard on Discrimination
  39. Singo and Howard on the Greens
  40. Singo and Howard on Xenophobia
  41. Singo and Howard on Murdoch, Packer and Monopolistic Media
  42. Singo and Howard Explain that Pure Capitalism Solves Pollution
  43. Singo and Howard Defend Miners Against Government
  44. Singo and Howard on Bureaucracy
  45. Singo and Howard on Corporate Capitalism
  46. The last words of Charles Russell
  47. Ted Noffs' Preface to Rip Van Australia
  48. Right-wing anarchists revamping libertarian ideology
  49. Giving a chukka to the Workers Party
  50. Govt "villain" in eyes of new party
  51. "A beautiful time to be starting a new party": Rand fans believe in every man for himself
  52. Introducing the new Workers' Party
  53. Paul Rackemann 1980 Progress Party Election Speech
  54. Lang Hancock 1978 George Negus Interview
  55. Voices of frustration
  56. Policies of Workers Party
  57. Party Promises to Abolish Tax
  58. AAA Tow Truck Co.
  59. Singo and Howard on Context
  60. Singo and Howard Blame Roosevelt for Pearl Harbour
  61. Singo and Howard on Apathy
  62. Workers Party is "not just a funny flash in the pan"
  63. Singo and Howard on Decency
  64. John Singleton in 1971 on the 2010 Federal Election
  65. Matthew, Mark, Luke & John Pty. Ltd. Advertising Agents
  66. Viv Forbes Wins 1986 Adam Smith Award
  67. The writing of the Workers Party platform and the differences between the 1975 Australian and American libertarian movements
  68. Who's Who in the Workers Party
  69. Bob Howard interviewed by Merilyn Giesekam on the Workers Party
  70. A Farewell to Armchair Critics
  71. Sukrit Sabhlok interviews Mark Tier
  72. David Russell Leads 1975 Workers Party Queensland Senate Team
  73. David Russell Workers Party Policy Speech on Brisbane TV
  74. Bludgers need not apply
  75. New party formed "to slash controls"
  76. The Workers Party
  77. Malcolm Turnbull says "the Workers party is a force to be reckoned with"
  78. The great consumer protection trick
  79. The "Workers" speak out
  80. How the whores pretend to be nuns
  81. The Workers Party is a Political Party
  82. Shit State Subsidised Socialist Schooling Should Cease Says Singo
  83. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  84. Workers Party Reunion Intro
  85. Singo and Howard on Freedom from Government and Other Criminals
  86. Singo and Howard on Young People
  87. Singo and Howard Expose how Government Healthcare Controls Legislate Doctors into Slavery
  88. Singo and Howard Engage with Homosexuality
  89. Singo and Howard Demand Repeal of Libel and Slander Laws
  90. Singo and Howard on Consumer Protection
  91. Singo and Howard on Consistency
  92. Workers Party is born as foe of government
  93. Political branch formed
  94. Government seen by new party as evil
  95. Singo and Howard on Non-Interference
  96. Singo and Howard on Women's Lib
  97. Singo and Howard on Licences
  98. Singo and Howard on Gun Control
  99. Singo and Howard on Human Nature
  100. Singo and Howard on Voting
  101. Singo and Howard on
    Inherited Wealth
  102. Singo and Howard on Education
  103. Singo and Howard on Qualifications
  104. Ron Manners on the Workers Party
  105. Singo and Howard Hate Politicians
  106. Undeserved handouts make Australia the lucky country
  107. A happy story about Aborigines
  108. John Singleton on Political Advertising
  109. Richard Hall, Mike Stanton and Judith James on the Workers Party
  110. Singo Incites Civil Disobedience
  111. How John Singleton Would Make Tony Abbott Prime Minister
  112. The Discipline of Necessity
  113. John Singleton on the first election the Workers Party contested
  114. Libertarians: Radicals on the right
  115. The Bulletin on Maxwell Newton as Workers Party national spokesman on economics and politics
  116. Singo and Howard: Australia Should Pull Out of the Olympics
  117. Singo and Howard Like Foreign Investment
  118. Mark Tier corrects Nation Review on the Workers Party
  119. The impossible dream
  120. Why can't I get away with it?
  121. The bold and boring Lib/Lab shuffle
  122. Time for progress
  123. The loonie right implodes
  124. Max Newton: Maverick in Exile
  125. John Singleton on refusing to do business with criminals and economic illiterates
  126. Censorship should be banned
  127. "Listen, mate, a socialist is a bum"
  128. John Singleton on Advertising
  129. John Singleton on why he did the Hawke re-election campaign
  130. Sinclair Hill calls for dropping a neutron bomb on Canberra
  131. Bob Howard in Reason 1974-77
  132. John Singleton defends ockerism
  133. Singo and Howard talk Civil Disobedience
  134. The Census Con
  135. Singo and Howard Oppose Australian Participation in the Vietnam War
  136. Did John Singleton oppose the mining industry and privatising healthcare in 1990?
  137. Bob Carr in 1981 on John Singleton's political bent
  138. John Singleton-Ita Buttrose interview (1977)
  139. King Leonard of Hutt River Declares Defensive Just War Against Australia the Aggressor
  140. Singo says Lang Hancock violated Australia's 11th commandment: Thou Shalt Not Succeed
  141. Singleton: the White Knight of Ockerdom
  142. John Singleton bites into Sinclair Hill's beef
  143. Save Parramatta Road
  144. 1979 news item on new TV show John Singleton With a Lot of Help From His Friends
  145. Smoking, Health and Freedom
  146. Singo and Howard on Unions
  147. Singo and Howard Smash the State
  148. Singo and Howard on the big issue of Daylight Saving
  149. Come back Bob - It was all in fun!
  150. A few "chukkas" in the Senate for polo ace?
  151. Country Rejuvenation - Towards a Better Future
  152. Singo and Howard on Profits, Super Profits and Natural Disasters
  153. John Singleton's 1977 pitch that he be on a committee of one to run the Sydney 1988 Olympics for profit
  154. Thoughts on Land Ownership
  155. 1975 Max Newton-Ash Long interview on the Workers Party
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