What are some myths of the "free market" people continually believe and why?
For context, this is a question I answered on Quora
The two most common myths are that free markets are the prevailing economic model or that they were the prevailing model in the distant past, usually the 19th century is used as the period in which the free market supposedly existed. Neither are true if you bother to consider that all white markets have had legal monopolies over money, land, and ideas imposed on them since forever. In the U.S. in particular the constitution gave congress the power to grant certain individuals and enterprises legal monopolies over ideas and processes called patents from the very inception of the country. From the very inception of the country, the USG has also established a monopoly over land deals with existing tribal nations barring private citizens from purchasing land from tribes directly and establishing land grants and land patents to decide ownership over parts of the earth that they mainly seized at gun point. This historical aversion from voluntary exchange that underpins the term “free market” to state violence made our current land rights contingent on the bizarre pseudo-religious doctrine of discovery articulated in Johnson v. McIntosh just as the state invention of intellectual property made free competition in various markets contingent on the authority of U.S.P.T.O. The same is true of money which the U.S. constitution gave congress a monopoly over and which congress has delegated to various national banks chartered in 18th and 19th century before they created the federal reserve. The only thing that remotely resembled a “free market” in money in American history was when people on the frontier used commodities such as whiskey, tobacco and furs as a common currency in exchange for other goods and services in lieu of bank notes from state and federally chartered banks. And of course it should also be pointed out that foreign competition has always been mitigated through the use of tariffs that the U.S.G. has imposed on imported goods from the very beginning. The so called free market was very much limited to trade on the western frontier that occurred outside the purview of federal, state and municipal authorities.
Benjamin Tucker first articulated how these four government granted monopolies restricted competition among capitalists and gave them an enormous advantage over laborers who bargained for wages under unlimited competition. You do not need to be a mutualist or anarchist of any sort to see how giving certain people the privilege to control land without compensation to those dispossessed of it, access to credit, and access to markets themselves not only burdens ordinary working class people with higher living costs but also reduces their bargaining power in the labor markets.
Benjamin Tucker: State Socialism and Anarchism
I don’t think he or his intellectual predecessors Pierre Proudhon and Josiah Warren ever imagined that competition in the supply of capital could be even further reduced through certificate of need laws and stringent occupational licensing for even the most mundane services.
Abolish Occupational Licensing (Part 1)
Abolish Occupational Licensing (Part 2)
Abolish Occupational Licensing (Part 3)
I don’t believe any of them would similarly imagine that housing for the working poor could be made scarcer and thus costlier through single family zoning, minimum floor space requirements for such housing, prolonged reviews and delayed permitting for multifamily housing that also has off-street parking minimums imposed on it and minimum lot size requirements. They probably wrongly believed that the state had disadvantaged the working class as much as it possibly could.
They also would have not foreseen the creation of federal regulatory agencies that would succumb to regulatory capture by the very industries they were set up to police through revolving doors with said industries and reliance on user fees.