the free market: does it work or is it flawed

[pjdude1219]

it doesn't work. Its two core tenants are wrong. they do not exist and cannot be brought about too exist.

1. that information is equitable between buyer and seller. while in some cases this can brought to happen in the vast majority of them it can't. first pillar of the free market down.

2. that people behave in rational ways and make rational choices. This is total false and cannot be brought to be. human survival is based on hard coding some illogical processes into us. we will never make perfectly rational choices. second pillar down


now while free market/capitalism cannot work it has some good ideas that when taken and blended with some other idea will net a workable adaptable system.

 

[Norsefire]

First, we must ask ourselves: what is the free market?

The free market is just a term referring to the concept of free exchance and free association. Within a free market, people own property and exchange freely; people can choose with whom to associate, and how to associate. They are free from and free to.

In a free market, each person has the role of consumer and producer. As consumers, people choose where their money goes.....and therefore in a free market, only the best places are where resources are allocated. In a free market, something cannot survive if it is not popular.


The free market is all about each individual making a choice as to where their property and currency will go; it "pinpoints" key areas of interests. And it is the only true freedom because you get both independence and freedom, whereas in other so-called "freedoms" you are still bound.

Further, the free market is about self-responsibility and self-action as opposed to government legislation and government babysitting.

One of the greatest delusions in the world is the hope that the evils in this world are to be cured by legislation. – Thomas B. Reed (1886)

Giving money and power to government is like giving whiskey and car keys to teenage boys. – P.J. O'Rourke

A government which robs Peter to pay Paul, can always count on the support of Paul. – George Bernard Shaw

There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him. – Robert Heinlein


In a free market, you have people that contribute to society and in exchange they receive wealth.

As the free market is all about voluntarism, if something does not work in the free market, there is little chance it will work at all.

 

[joepistole]

Free markets do work and work well at resource allocation. However, freemarkets tend not to remain free. Eventually enterprising individuals learn how to use their wealth to gain the system and give them perpetual competitive advantages by controlling the markets (e.g. Insustrial Robber Barons).

http://en.wikipedia.org/wiki/Robber_baron_(industrialist)

So government is needed to keep markets competitive.

 

[pjdude1219]

First, we must ask ourselves: what is the free market?

The free market is just a term referring to the concept of free exchance and free association. Within a free market, people own property and exchange freely; people can choose with whom to associate, and how to associate. They are free from and free to.

In a free market, each person has the role of consumer and producer. As consumers, people choose where their money goes.....and therefore in a free market, only the best places are where resources are allocated. In a free market, something cannot survive if it is not popular.


The free market is all about each individual making a choice as to where their property and currency will go; it "pinpoints" key areas of interests. And it is the only true freedom because you get both independence and freedom, whereas in other so-called "freedoms" you are still bound.

Further, the free market is about self-responsibility and self-action as opposed to government legislation and government babysitting.

One of the greatest delusions in the world is the hope that the evils in this world are to be cured by legislation. – Thomas B. Reed (1886)

Giving money and power to government is like giving whiskey and car keys to teenage boys. – P.J. O'Rourke

A government which robs Peter to pay Paul, can always count on the support of Paul. – George Bernard Shaw

There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him. – Robert Heinlein


In a free market, you have people that contribute to society and in exchange they receive wealth.

As the free market is all about voluntarism, if something does not work in the free market, there is little chance it will work at all.

??? I think you have just proven you haven't the foggiest idea of what the free market is. The free market is an economic theory yet you speak of it as if it were a philosophical one.




and norse all the quotes in the world don't change that the core tenants are false

 

[Norsefire]

Free markets do work and work well at resource allocation. However, freemarkets tend not to remain free. Eventually enterprising individuals learn how to use their wealth to gain the system and give them perpetual competitive advantages by controlling the markets (e.g. Insustrial Robber Barons).

http://en.wikipedia.org/wiki/Robber_baron_(industrialist)

So government is needed to keep markets competitive.

Nope. The people are only able to gain an upper hand because of government protectionism and favoritism.

The government needs to protect against fraud and protect property rights. Wealth redistribution and government enterprise are not needed and are harmful to the economy.

Thus the government is needed only for the basics: enforce contracts, recognize property rights. Uphold the courts.

Nothing beyond that.

 

[joepistole]

Nope. The people are only able to gain an upper hand because of government protectionism and favoritism.

The government needs to protect against fraud and protect property rights. Wealth redistribution and government enterprise are not needed and are harmful to the economy.

Thus the government is needed only for the basics: enforce contracts, recognize property rights. Uphold the courts.

Nothing beyond that.

Here is the thing Norsefire, Industrial Robber Barons came to be in a period of laissez faire.

 

[pjdude1219]

Free markets do work and work well at resource allocation. However, freemarkets tend not to remain free. Eventually enterprising individuals learn how to use their wealth to gain the system and give them perpetual competitive advantages by controlling the markets (e.g. Insustrial Robber Barons).

http://en.wikipedia.org/wiki/Robber_baron_(industrialist)

So government is needed to keep markets competitive.

than its not a free market than its a regulated market.

 

[Norsefire]

Here is the thing Norsefire, Industrial Robber Barons came to be in a period of laissez faire.

There has never been a period of laissez-faire. Besides, from what I know about these Robber Barons, it wasn't very laissez-faire if they were able to bind people to estates (that's Feudalism, not capitalism).

What sorts of regulations do you have in mind, anyway, Joe? I'm sure we can probably agree........as long as you don't advocate high taxes, costly regulations, or redistribution of wealth, or government interference in private business.

 

[pjdude1219]

There has never been a period of laissez-faire. Besides, from what I know about these Robber Barons, it wasn't very laissez-faire if they were able to bind people to estates (that's Feudalism, not capitalism).

that's the fatal flaw. it cannot maintain its self. someone gets power through vast wealth and can control others.

What sorts of regulations do you have in mind, anyway, Joe? I'm sure we can probably agree........as long as you don't advocate high taxes, costly regulations, or redistribution of wealth, or government interference in private business.

so we can have regulation just none of which that actualy helps

 

[WillNever]

In the TRUE free market, there is no government intervention in the economy whatsoever. That means no bans on monopolies, cartels, fake advertisements, service malpractice, unsafe working conditions, child labor, and dangerous and even deadly consumer products. In the free market, all of those things would be perfectly legal.

Does that sound like a good way to live..? Do monopolies and cartels sound beneficial to the competition necessary to maintain a stable economy..?

I don't think it is... but you can decide for yourself. In the meantime, the closest the USA ever came to the free market was back in the late 19th century. Things were pretty awful then.

 

[BenTheMan]

I think the question is too naive. Does the free market work? Does Communism work? Sure, in principle. It's not hard to set up a system that works in principle. If everyone behaves as they should, then anything you write down can work.

It's also not hard to see that every system that you can set up has its shortcomings, and is flawed in some (potentially) fatal way.

 

[Read-Only]

I think the question is too naive. Does the free market work? Does Communism work? Sure, in principle. It's not hard to set up a system that works in principle. If everyone behaves as they should, then anything you write down can work.

It's also not hard to see that every system that you can set up has its shortcomings, and is flawed in some (potentially) fatal way.

I agree. And not only is the question VERY naive, so is the original poster. He also seems to believe it's an either/or situation while it clearly isn't.

For example, in the U.S. version of a free market, it's possible to establish companies that go head-to-head with huge ones. Like computer operating systems - Microsoft vs Mac and Linux (Linux and other Unix style OSs are growing every year in the business world). It encourages competition which always helps to hold prices down. If there is only a single supermarket in town - and the nearest town with one is 40 miles away - they can get away with charging higher than normal prices. And the situation is then ripe for another one to open up and drive those prices down.

At the same time, it also allows for regulated monopolies. Would it make any sense to have six different sets of power lines running along each street? Of course not !! Or five different bus companies running between Atlanta and Memphis? That would make no sense either with a limited ridership and each company trying to stay in business. It would mean that each would be charging a higher fare than a single one or two who were regulated.

 

[WillNever]

Power lines are built by what are called "natural monopolies" like power companies, cable companies, etc. Those companies are highly regulated by the state. Every time they increase prices, they need to have this long-ass sit down with a state board to justify why the price increase.

Bringing up natural monopolies as a reason that monopolies are okay is not kosher. They are government-sanctioned, which flies against the free market.

 

[Read-Only]

Power lines are built by what are called "natural monopolies" like power companies, cable companies, etc. Those companies are highly regulated by the state. Every time they increase prices, they need to have this long-ass sit down with a state board to justify why the price increase.

Bringing up natural monopolies as a reason that monopolies are okay is not kosher. They are government-sanctioned, which flies against the free market.

Picky, picky. Evidently you are unaware of the history of the telephone industry. When phones were first becoming popular, it was common in big cities - like NY and Chicago - to have ten or more phone companies operating in them. And there was NO way to connect between people using different companies. They eventually merged - with NO push or help from the government - because they simply realized that business model wasn't working at all. It was considerably later before they became regulated.

An I notice that you didn't even comment on the bus line scenario I outlined.

 

[WillNever]

To comment on what..? If there is no need for more than a few bus lines, then any extra ones will be swallowed up or run out of business. That case solves itself. The power line issue, nor the uncontrollable price issue belonging to cable and power companies, don't take care of themselves.

 

[Read-Only]

To comment on what..? If there is no need for more than a few bus lines, then any extra ones will be swallowed up or run out of business. That case solves itself. The power line issue, nor the uncontrollable price issue belonging to cable and power companies, don't take care of themselves.

Sure they would - just like the numerous phone companies in the same city did. I'll use your own words against you on the multiple power company issue: "If there is no need for more than a few..., then any extra ones will be swallowed up or run out of business."

It always amazes me how some people can see an apple and recognize it as as apple. Yet show them another apple and they think it's an orange. :shrug:

 

[stateofmind]

What economy is it where all the people of the populace have enlightened self-interest? Do we need to set up a framework at all? What if people were aware of the power they possessed to dictate the products they receive? Wouldn't everyone then get exactly what they want? What we need to do is teach people the facts about their role in the economy. If everyone understood that we are voting with every dollar we spend - what need have we for any theories? The economy would be exactly as it should be, as it wants to be - as it needs to be.

 

[WillNever]

Sure they would - just like the numerous phone companies in the same city did. I'll use your own words against you on the multiple power company issue: "If there is no need for more than a few..., then any extra ones will be swallowed up or run out of business."

It always amazes me how some people can see an apple and recognize it as as apple. Yet show them another apple and they think it's an orange. :shrug:

They aren't both apples. Multiple bus lines don't cause the same negative externalities that having multiple power lines running in the same location would. It just causes inefficiency. Multiple power lines on the same location causes more than that.

For what reason do you believe multiple power lines would be swallowed up or run out of business..? How long would that take..? What would stop future companies from arising to compete and clutter up public property with their lines even more? We are talking about an industry that is directly reliant on a public good to function at all, where there isn't enough of that public good for everyone to share. That doesn't hold true for bus lines. The roads are not going to be congested by some extra bus companies whose itineraries span hundreds of miles.

If you can't see the difference between those two, then I'd be forced to believe you're looking at this with blinders and purposefully so. I hope that's not true.

 

[Norsefire]

no bans on monopolies, cartels,

How are unnatural monopolies going to form without government? Government helps monopolies. The free market may allow a certain company to grow and dominate a certain industry, but it can only maintain that domination if it delivers quality service. If it doesn't, then it will fall when it gets no business. The same goes for cartels.

fake advertisements

That's fraud. And nobody is saying the government shouldn't protect against fraud.

service malpractice

This can be handled by private firms and private organizations; and legislation doesn't protect people against malpractice.

unsafe working conditions

It's up to labor unions and employees, and people being responsible, to address this issue

child labor

It's up to the parents to be responsible, not to government to babysit us.

and dangerous and even deadly consumer products

There are many private review organizations that ensure quality control.

In the free market, all of those things would be perfectly legal.

Eh......you should probably put more thought into it. And for whatever, of what you mentioned, would be 'legal', that doesn't mean it will be there.

Does that sound like a good way to live..? Do monopolies and cartels sound beneficial to the competition necessary to maintain a stable economy..?

Nope, and in a free market, natural monopolies can only form and maintain their status if they can defeat the competition. Otherwise they fail.

Governments create monopolies. And barriers to entry. The American Medical Association deliberately makes it difficult for people to enter into the medical field, for instance.

 

[Read-Only]

They aren't both apples. Multiple bus lines don't cause the same negative externalities that having multiple power lines running in the same location would. It just causes inefficiency. Multiple power lines on the same location causes more than that.

For what reason do you believe multiple power lines would be swallowed up or run out of business..? How long would that take..? What would stop future companies from arising to compete and clutter up public property with their lines even more? We are talking about an industry that is directly reliant on a public good to function at all, where there isn't enough of that public good for everyone to share. That doesn't hold true for bus lines. The roads are not going to be congested by some extra bus companies whose itineraries span hundreds of miles.

If you can't see the difference between those two, then I'd be forced to believe you're looking at this with blinders and purposefully so. I hope that's not true.

No, the blinders appear to be on the other side of the screen from me. Also, I have no agenda in this, simply pointing out basic economics.

Indeed, they are BOTH apples. Both have a relativity stable consumer base and both would be competing for a fairly stable amount of revenue. Congestion - or anything similar is not an issue here - it's primarily a flat revenue base and if ALL the competitors attempt to each stay in business independently of the others, they will have to charge a higher rate than a single one working alone. Which is precisely why AT&T was allowed to be the only long-distance telephone company operating in the U.S. for decades.

In addition to the obvious factors, there is also the efficiency gained through economy of scale to take into consideration in ALL those apples. Multiple power companies or bus lines serving a fairly flat customer base would naturally result in idle plant (or rolling stock). And that's an increase in operating costs that can only be made up by HIGHER rates - period.