To see how a truly free market works I encourage folks to look at the 1870/1880s in the railroad business (note that only the UP/Cp got loans from the govenment, while the Northern Pacific and the ATSF and SP got land as well as 10 years earlier the IC.
This prompted me to respond:
Wait, a “truly free market” where they all got subsidies, some in the form of loans from the government, others in the form of land? Seems a bit funny to condemn as an example of a “free market” something that so much government involvement.
Which prompted the following response from Elias:
Yeah; and I’m not sure Lyle is Scottish, anyway.
Now Elias writes some very nice political analysis, but there’s a carelessness with definitions here that deserves a sharp rebuke. Simply put, there is a difference between a market in which the government is providing subsidies for favored economic interests and one in which it doesn’t. To note that distinction is not to engage in the no true Scotsman fallacy, but to emphasize that different outcomes result when government gives subsidies, and when it doesn’t. We can even use Lyle’s own sphere of industry for examples, by comparing the railroads that were subsidized with the Great Northern Railway, the one that didn’t go bankrupt or have to completely rebuild its original route. To claim there’s a no true Scotsman fallacy here is to pretend that actual differences don’t matter.
There’s a bizarro world aspect here, where no matter how often a free market advocate insists that rent-seeking/subsidies is an interference with the free market, some anti-market liberals insist on defining free markets as including such rent-seeking. So here’s my question for folks like Elias: What term would you have us use for a market where the government is not giving out subsidies? Because we can’t have a serious discussion until we are imputing the same meaning to terms, and I have a gut feeling that the whole purpose of this eliding of differences is so that you can avoid having to deal with that type of market; that is, so you can avoid having to get that serious about the issue. Is that unfair on my part? Perhaps, but if so it’s pretty easy to prove how unfair it is by demonstrating that you recognize the distinction and working with me on developing common terminology.
But here’s my line in the sand: if you conflate two substantively different things (subsidized industries vs. unsubsidized ones), you are not engaging in serious adult discussion, just cheap partisan game-playing.