The myth of the free market

The myth of the free market, perpetuated by those who benefit from its absence.

The concept of a "free market" is often idealised as an economic system where competition flourishes, prices are determined by supply and demand, and individuals have equal opportunities to participate. However, this idealised vision obscures the reality that truly free markets are a myth. In practice, markets are heavily constrained by monopolies, rentier capitalism, and the concentration of wealth and power among a small elite. These forces restrict competition, distort prices, and exclude the majority of people from meaningful economic participation. Rather than being a neutral arena of exchange, the market is shaped by entrenched interests that limit its freedom and perpetuate inequality.

One of the most significant barriers to free markets is the dominance of monopolies and oligopolies. Large corporations, through economies of scale, regulatory capture, and anti-competitive practices, stifle smaller competitors and control entire industries. Tech giants like Amazon, Google, and Facebook dominate digital markets, while a handful of pharmaceutical companies dictate drug prices. These firms manipulate markets through predatory pricing, exclusive contracts, and mergers that eliminate rivals. There is relatively little competition.

When a few players control an industry, the supposed "free market" becomes an illusion. Prices are no longer set by competition but by corporate power. Consumers and workers have little choice but to accept the terms imposed by these dominant entities. The result is not a free market but a rigged system where wealth and influence are concentrated at the top.

Another distortion of free markets comes from rentierism—a system where wealth is extracted not through productive activity but through control over assets like land, patents, or financial instruments. Rentiers, such as landlords, patent trolls, and monopolistic financiers, generate income by charging others for access to essential resources rather than by creating value.

Housing markets exemplify this problem. In many cities, a handful of property owners and real estate speculators drive up rents, making housing unaffordable for most people. Similarly, intellectual property laws allow corporations to extract monopoly rents by charging exorbitant prices for medicines or technology. Financialisation further entrenches rentierism, as banks and hedge funds profit from debt and speculation rather than productive investment.

Rentier capitalism distorts markets by prioritising extraction over innovation, making it harder for genuine entrepreneurs and workers to thrive. It turns markets into mechanisms of wealth transfer from the many to the few who are profiting without producing.

A truly free market assumes that all participants have relatively equal access to resources and opportunities. However, extreme wealth inequality ensures that this is not the case. The richest one percent control a disproportionate share of global assets, while billions struggle with poverty and debt. This concentration of capital means that most people cannot meaningfully participate in markets—whether as entrepreneurs, investors, or even informed consumers.

Banks favour wealthy clients with better loan terms, venture capital flows to well-connected startups, and political influence is bought by corporate lobbies. The average person faces barriers to entry at every turn, from student debt limiting career choices to monopolistic firms squeezing out small businesses. The myth of the "self-made" entrepreneur ignores how structural advantages—inherited wealth, elite education, and insider networks—determine success far more than merit or market competition.

Governments and corporations often invoke "free markets" to justify deregulation, tax cuts, and privatisation, claiming these policies enhance competition. Yet, in reality, these measures frequently entrench existing power structures. Deregulation allows monopolies to expand, tax cuts disproportionately benefit the wealthy, and privatisation often turns public goods into private profit centres. Market freedom is an illusion.

The 2008 financial crisis exposed how "free market" rhetoric masked a system where banks were bailed out while ordinary people lost homes and jobs. Similarly, the COVID-19 pandemic saw corporations reap record profits while small businesses collapsed. These crises reveal that markets are never truly free—they are shaped by power, privilege, and policy choices that favour the elite.

The idea of a free market is a myth because real-world markets are structured by monopolies, rentierism, and extreme inequality. Rather than being open and competitive, they are controlled by dominant players who manipulate rules to their advantage. For most people, market participation is constrained by debt, lack of capital, and corporate dominance. If we want markets to be genuinely free and fair, we must challenge monopolistic power, redistribute wealth, and democratise economic decision-making. Otherwise, the "free market" will remain a convenient fiction for those who benefit from its absence.