An inherent problem of the free market is the creation of individual, social, and economic dependency on industries that might no longer be needed due to resource constraints or lack of necessity. The best examples are the future of fossil fuel power plants and the automobile industry of the late 2000s. The latter had to be propped up to maintain a cornerstone of our economy and the countless jobs associated with it, despite superior vehicles being produced by foreign competitors. Instead of more cars, America desperately needed an infusion of public transport infrastructure, but instead, we were forced to keep American auto manufacturers afloat in order to avoid putting people out of work and crippling a huge portion of the economy.
The market had created a dependency between the employee and the auto industry, as well as a dependency between the auto industry and the economy.
The fossil fuel industry is something that will eventually have to be scaled down in the very near future (due to climate concerns and resource constraints), and during that process, we will be presented with a situation similar to that of the auto industry. Do we start closing coal, gas, and oil power plants and putting people out of work? Or do we let them stay open and contribute to rising carbon dioxide levels? We will not have the option of keeping those power plants operational if we’re going to avoid environmental collapse.
We’ve known that we’ve needed to move to alternative energy sources for decades, yet the dictates of the market have kept fossil fuel prices low and alternative energy subdued, leaving us with a tremendous problem: worldwide dependency on fossil fuels that contribute to climate change when burned in excess, and countless millions of workers completely dependent on those fossil fuels for income.
The free market cannot compensate for these incredible problems since fossil fuels will continue to be preferred well past the point of no return since they serve as the backbone of our entire world’s economy, infrastructure, and energy production. Even if fossil fuels become scarce and expensive, we will have already gone beyond the tipping point (we are already at that point), and the richest countries in the world will continue to use them because they can afford it.
The prevailing notion among advocates of the market approach is that as fossil fuels become more scarce, prices will rise, demand will fall, and investment in alternatives will increase. This is true of goods we buy at the store – if beans are more expensive than potatoes, all things being held equal, I will purchase potatoes. That same logic does not apply to fossil fuels. Why? Because there aren’t trillions of dollars of sunk costs and decades of infrastructure invested in my decision to eat beans, and I don’t have to stop eating beans because they’re poisoning me irrevocably.
Some advocates of the market approach claim that a strong judicial system would help address the climate crisis. If people were concerned about pollution or global warming, it would be up to those people to sue the companies that are polluting and hope that any levied fines and penalties (or injunctions, if they’re even enforceable) would account for the problem.
Of course, that assertion completely ignores the fact that if a private, fossil fuel power plant were to be sued for a huge sum, that plant would be given even more incentive to produce as much profit as they can, as cheaply as they can, leading to cost cutting and greater exploitation of employees.
It also fails to address the question of how private companies would have their practices and pollutants monitored in the absence of a publicly funded entity like the EPA. Who would monitor everything? For-profit companies? Would companies self-monitor and report? Those options involve an incredible conflict of interest. Would the judicial system somehow monitor them? Non-profit companies functioning on donations? Neither seem like they would have the resources or the scale to address the issue at hand.
All of that aside, this type of system shifts even more of the burden onto individuals than what is already upon them – individuals who, even when their resources and knowledge are pooled, cannot hope to match the capabilities of an entire industry. And even if they could, there is no guarantee that what would need to be done would be done in a timely fashion – and the overwhelming consensus among scientists is that what needs to be done involves, ultimately, closing down the vast majority of power plants that burn fossil fuels, regardless of whether or not they are profitable.
So if that’s the case, and power plants are shut down, then what is to happen to those who work in them? Leave them at the whim of the market and hope that they can find a new income source? It’s not their fault that our elected officials and forefathers planned so poorly, so why place the weight of unemployment on their shoulders?
Ultimately, the free market cannot resolve the problems it creates, and if we wish to live in an egalitarian society that doesn’t let people just fall through the cracks, the free market cannot hope to address the problem itself. It must always be augmented, and those augmentations are only temporary stop-gap measures until the next problem is created.
Of course, if one doesn’t think it’s important to help those who are falling, then one probably won’t have a problem with the free market.