Free-market capitalism

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evkl

evkl

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Is a truly free market a good idea?

Remember, that means no government regulation whatsoever.

If you don't think a truly free market is good, is even the very liberal free market that America presently has a good idea?

Discuss.
 
I love how economics is based on numbers, yet most of the individual concepts are based on people being reasonable. When are people ever reasonable?

So, no, free market capitalism is not a good idea. I've come to appreciate certain aspects of capitalism, but...a free and open market is still something I don't see working any better than, say, pure communism. They're both unrealistic and rely too heavily upon people being predictable. People aren't predictable. They may move in general patterns, but the instant something new is introduced, the patterns change.

But maybe I hate pure capitalism because I think Milton Friedman is a dick.

What we have now isn't perfect, but it's close enough for me.
 
Really. I thought both systems sounded good on paper ... and somehow both sides have screwed them up. Whether it's capitalism or communism, you still end up with barely-eating poor and super-rich power-mongers. I don't really see the difference (much). I still love how corporations love free markets until they're about to go bankrupt and then ask for government handouts. A classmate of mine told me, "But, airports and such are necessary to our society" -- basically arguing that because we've become dependent on them, they should get a free ride. But, my problem is that we could depend on small businesses as well ... but for some strange reason they get ignored in the big money pie. We reward big business with tax write-offs and then have the audacity to tell the little guy that the reason they aren't financially successful is that they don't have good business sense ... yeah, the sense to become a parasite to Congress. (rolls eyes)
 
If we had a truly free market society, we'd have far more extremes than we do now. Monopolies would run rampant until they get overthrown and rebuilt. The system as we have it now tends to buffer those extremes and keep things in a more manageable range of values. But again, nothing is perfect, even if the ideas themselves are when you neglect human nature. :p
 
But then we shouldn't call ourselves a free market, just like calling ourselves a democracy is inaccurate -- we're a republic.
 
Well, if we define a free market as being without any form of governmental regulation, then we are talking about an economy based upon Darwinian principles of survival of the fittest.

Oddly, through most of human history, that describes the economy perfectly.

So, let's look at this idea through the perspectives of the producer and the consumer. Both are intricately intertwined.

WARNING: ECON LESSON AHEAD!

Let's look at this first from the producer's viewpoint.

If you're producing something, you want to make it as cheaply as you can and sell it for as much as you can. This is possible only if you are a monopoly.

Otherwise, you have to contend with competition. Someone may undercut your price and be satisfied with lower income.

Also, labor is fluid. Labor goes wherever the pay is higher and the benefits are better. That raises costs. That reduces profits unless there are no substitutes for the product being made, in which case, the price can be raised.

Is there anything for which one or more substitutes can't be found that will do the same job?

Mind you, monopolies existed when the entry costs for competitors were too high. In the late 1800's, that was true. Nowadays, it doesn't take that much effort to find capital investors overflowing with money. Monopolies like the water company, gas company, power company, telephone company, cable company, etc. exist today because of government.

Now, let's look at things from the viewpoint of the consumer.

What does the consumer want? Whatever he/she wants at the cheapest price. And if it's too expensive, the consumer won't buy it unless they have no choice. Underline no choice.

That's as simple as it gets. Consumers spend what they have to get the greatest value for their money.

So, where does government enter the equation? Pretty much ensuring consumers get good products. Upton Sinclair's "The Jungle" exposed how the meat packing industry was selling substandard products to the public. As a result, the FDA was created.

Without governmental regulation, we'd be sold s**t and most of us wouldn't have any alternatives.
 
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For much of economic history it was hard to transport products great distances. So you really only had local factors and economies to consider. It was easier to say the locksmith to hold a monopoly.

However, today the economy is global and has opened a whole new can of worms. The biggest one for these differences in the cost of living. My mom told me about a story she read. A man working in America found out his job was being sent to India. When he protested his boss told him if he wanted his job he had to move to India and accept a lower wage. The man agreed, moved to India and took his job at the lower Indian wage. Despite being paid less his standard of living was a little better in India because the cost of living was lower.

So countries like the U.S. have a problem because their cost of living is so high. Labor costs more because it costs more to keep body and soul together. The answer had been tariffs. Let's say you can make a product for $1.00 in the U.S. while a company in China can make it and ship it here for $.90. The government places a $.10 tariff on the Chinese product so both products cost the same to get into your store. It didn't discourage trade but it also didn't encourage outsourcing since there was no change in profits.

In free market capitalism you don't have tariffs and basically nothing to stop outsourcing. We've seen it here in the United States which weakens the economy because the nation's spending power is weakened. Right now we've kept afloat by barrowing but now that has come back to bite us in the ass but that's another story.

The government needs to step in to set the ground rules both on regulating quality (something else that has run into a snag in today's economy) and making sure the playing field is level.

Also, as the UWA/Big 3 talks have shown. The U.S. really needs to think about universal healthcare. The reason Japanese workers don't cost as much in the healthcare sector is much of their health needs are paid for by the government (and in Europe). And it's cheaper because the government isn't making a profit off healthcare (like the insurance companies are) and are more focused on prevention because it costs less to prevent illness than treat it. So you can add lifting some burdens from both consumers and producers to the list (which is win-win for producers because not only do your costs go down but the consumers have more money to spend on your product).

Communism failed because it requires 100% of the population to be 100% honest and 100% self sacrificing 100% of the time. Good luck. Free market capitalism fails because it requires the population to keep their greed in check and conduct business logically. Again, good luck.

Personally I think the Northern Europeans have figured it out. They time and time again prove to be the happiest people on earth. They've found the right mix of regulation and capitalism and prosper. Granted they pay through the nose in taxes the services those taxes afford them is well worth it. Too bad it would take a major change in mindset to get that to work in the U.S.
 
Disgusting, Adam Smith and Milton Friedman can fuck off.

It doesn't work, neither does any capitalism.

Only under an anarcho-syndicalist society can we be free.
 
Capitalism has the fatal flaw that, due to human nature as it stands, it reduces everything to *only* economic factors.

Humans are not purely rational economic beasts, and purely economic factors don't tend to take in account environmental and social costs of decisions - not until the shit starts hitting the fan and it begins monetary advantageous to take a stand that would otherwise cost monies.

Savage capitalism has never worked.

The situation in America is already a vast improvement, although I still lean toward thinking the limited access to healthcare and higher education is a major issue.
 
Well, limited access to healthcare is a problem, but education isn't limited-access..nearly every county has a community college, for instance. The desire to seek out education isn't there.
 
Community colleges aren't free though. You still have to pay for tution and books though at a much lower cost compared to universities. But yeah, it's more a lack of will than lack of access.

Another fatal flaw in free market capitalism is that it removes the idea of the commons. Everything has to be owned by someone meaning nothing is owned by everyone. This is a bad way to go because it destroys the human sense of community and can lead to conflicts.
 
It comes down to pay a lot now or pay a little many times. But yeah, you're out about the same amount in the long run.

Though I don't see why people bitch about paying taxes for healthcare and education. Usually you pay less through taxes for them than paying private providers. Though, there's the pork government spends tax money on which is a pain.
 
*Cues in right-wing "NUH! NOT TRUE! DEPRESSION = CAUSED BY GOVT!"*
 
Evil Figment said:
Humans are not purely rational economic beasts...
Click to expand...

Indeed, they are not. Not even close. They only look at the short-term benefits of their economic decisions and mostly they look at things in terms of "what's in it for me."

Economic darwinism at its finest.

If humans were rational economic beasts, they'd accept short-term hardships for long-term benefits.

Evil Figment said:
...purely economic factors don't tend to take in account environmental and social costs of decisions
Click to expand...

Again, that's because long-term decisions require short-term sacrifices. There is no way you can justify that in today's economy where everyone wants to make money now. Long-term environmental and social costs don't matter when there is money to be made now. Those costs will be passed to subsequent generations just like they have been throughout human history.
 
without government regulation its a terrible idea, we need someone there to make sure enough nessessities are grown so people dont fucking starve to death.
 
You don't need a government nevermind government regualtion, but businesses in control of the workers and then you'll rid yourself of boom and bust.
 
barónmon said:
You don't need a government nevermind government regualtion, but businesses in control of the workers and then you'll rid yourself of boom and bust.
Click to expand...

Anarchists are so cute. Like watching a toddler try to fit a square peg into a round hole.
 
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