1. Is it true that the freer a market is, the faster it will grow?
Firstly, all other things being equal, the less fettered a market is, the faster it will expand. What is a free market? To me it is an arena, whether in cyberspace, the stock exchange, or a school fair, where individuals may make trading decisions with no outside interference.
Logically if there are only two parties per trade (buyer and seller) the transaction may proceed more quickly, wealth may be built at a faster rate.
If a third entity, (or forth, fifth, sixth…..) should join the party it gets more confused, More variables have to factored in, the trade becomes less “pure” and less likely to be beneficial to both original parties.
Tax for example, really slows things down. Imagine two rugby teams, playing at full pace in a nailbiting game.
Imagine they all have to give up 39% of their energy and divert it as a form of tax to the soccer players down the road.
The game will slow, tension will ease and vitality will be sapped.
Anything will grow faster if it is fed properly and not artifially hampered.
2. Is maximising growth, utilitarian?
I understand “utilitarian” to mean, to do something because it is practical, with little reference to the underlying principle. Right now, China is using capitalist methods, with no reference to the principles of human liberty that underly capitalism, to grow their economy. That, to me, is classic utilitarianism .
What did Deng Xiaoping say? “Who cares whether the cat is black or white, as long as it catches mice?
That’s fine, but there is a bit of an underlying trap. Labour’s “reforms of the ’80s” were sold in a utilitarian way. There was little talk of the principles of liberty, the rights of people to make their own decisions or liberal social values. It was all about efficiency, economic rationalism and re-vitalising the econonomy.
That was OK as far as it went, but with little public understanding of the principles behind the actions, people were very unwilling to put up with the associated pain. They were also happy to allow the current Labour regime to roll back many of the gains of that era.
It should not be a government’s aim to maximise economic growth. It should aim instead to create the freest possible society so that people, if they so wish, may grow the economy at whatever rate they desire.
Freedom must come before prosperity. Prosperity without freedom is a very temporary phenomonon.