Myth of the Free Market

Abstract The free market, in which equal parties freely agree on prices and quantities—equilibrium—if it ever existed, does not exist in the current stage of industrial production and Banker Capitalism. John R. Commons, Thorstein Veblen, and John Maynard Keynes understood the market to be a principal source of instability for prices and employment. The response to abundance was concentration of business enterprises, undermining of organized labor, and reliance on finance. These responses were endorsed by courts under a system that Commons called Judicial Sovereignty. This paper examines the role of Judicial Sovereignty superseding the executive and legislative branches of the United States government in this era of stabilization, with policies protecting vested interests against the instability of the market. Courts’ endorsement of these emerging practices supports stabilization policies that are the product of neither a democratic system nor a free market.