What makes you think the OP intended the question as an attack on the free market? (I didn’t get that impression.)
And quit you’re whining about whining. 
To clarify, I meant that markets are free from government interference as in your “freedom” to choose. It does not mean that companies are unrestricted by government for polluting the water supply.
The “powerful corporate actors” are the result of consumers choices clustered around a particular product or idea. Now that some folks don’t like the outcome of that clustered choice, all of sudden, it’s “not free” when it was freedom to choose was what created the clustered choice in the first place!
In the early 1980s when Microsoft was getting started, there were several computers and operating systems. Businesses (and individuals) could have chosen Burroughs, Honeywell, Apple, Radio Shack and other operating systems such as CPM. But eventually, people (without govt interference) clustered around the IBM PC clones running Microsoft operating systems (DOS and then Windows). Now in the year 2009 you contend that the market is “not free”. That makes no sense.
What in the world does “more free” mean to you? How would the 1980s play out more differently in the “more free” scenario you envision?
Or let’s apply this history of the 1980s to the present time…
Today, Google dominates in online-search and document. People by their own free will are “clustering” around Google as a choice platform. What should government do TODAY that makes this situation more free? Should we pass a law saying that all consumers using a web browser must use Yahoo Search 50% of the time, and Google Search the other 50% of the time? Should we remove everyone’s computer and iPhone and only provide government approved web browsers to ensure compliance with such a law? How do you make the marketplace of online-search “more free” as you envision it? Or do we wait until the year 2019 and complain on SDMB that “online search is not a free marketplace because Google monopolizes it.” That makes no sense.
Explain how the dominance of Microsoft Windows is different from the dominance of the “English language” or “marriage.”
The OP was exactly what it looked like. People use the term and I wanted to get what they considered the minimum requirements for a free market.
Looks can be deceiving because…
Are you using the word “free market” as in “fair market” or as in “a market free from govt distortion”? They are 2 different things. Most intellectual economic debate uses the 2nd definition (govt interference). Most casual internet debate seems to use the first definition (fair market).
I’m asking people to explain the minimum for the term they use. I’m not defining their term.
Well then, you’ll get a messy thread of a debate because even something as simple as “what does ‘free’ in “free market” mean?” is complicated enough. That you want layer another dimension (such as “level of idiocy”) on top of an uncertain phrase doesn’t seem to be ingredients for a very productive discussion.
Suppose someone else believes “free” in “free market” means a “zero cost market” as in everything doesn’t require money. Adding a another definition of “free” doesn’t add anything meaningful to your thread.
Why is it in anyone’s interest to tread over semantics again and again?
You already your own view what “free market” mean… just disclose it. Wouldn’t that help focus the debate?
That would just make people argue with me over my definition.
IANAeconomist, in fact I’m deeply uncomfortable with their level of abstraction, but I have a hunch - that’s all it is; a hunch - that corporations benefit most when competition is keenest between individuals. Scarce jobs; scarce opportunities; high barriers to mom and pop ventures and, especially, new ideas.
Culturally speaking - please pardon the fuzzy-feelyness here - our society venerates and talks up competition only among individuals. Not groups, not institutions, and sure as hell not capital-holding institutions.
Microsoft is an incident. Corporate collusion is a systematic looting . They will resist any all all attempts to regulate or prosecute. The bankers are right back where they were before the financial emergency. They are eating banks and getting bigger. The disinterest that the financiers have for the consumer is insulting. They believe that consumers are too stupid or isolated to exert any pressure on them. They laugh all the way to the offshore tax shelter as they increase their own salaries and bonuses.They jack up interest rates ,add charges up the wazoo, and all the while are back at the derivatives game again. They are putting the economy back in jeopardy and they do not care what we think. They know they have the access to the tax payers money any time they want it.
The corporations who took their business offshore must know that they are weakening America. They are getting short term profits while gutting the working and middle class in this country. One odf Americas strengths has been its buying capacity. it gave us power over nations that got our jobs because they still had to deal with the biggest market in the world. But the financial mess in America has resulted in our power being diminished. There is no good coming from allowing those thieves to continue without facing consequences.
If you want a free market or something resembling it, you will have to regulate vigorously.
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/25/AR2009052502108.html Brooksley Born warned the bankers, congress and the Senate that they were making a mess out of the economy. They ,and our board libertarians displayed great ignorance and huge hubris, in touting the economy as being on the right track. The middle class and the poor are paying the price for this huge national stupidity. Those who made the mess are getting away with it. They always do.
Out of curiosity (not that I expect you to answer me, mind), but who are these ‘board libertarians’ who are saying the economy is on track? I can’t think of any libertarian types on this board who would think that, so I’m curious if any of them have come out saying that and I simply missed it, or if you are, as I suspect, making it up. As usual.
-XT
It is certainly true that big corporations are no fan of the “free market”. Rather, they love government regulation, the more complicated the better. Corporations don’t exist to create a free market, they exist to make money.
And of course, a free market cannot exist without some sort of rule of law, or custom so strong it has the force of law. If I exchange my baskets for Thag’s chickens, but when I give Thag my baskets he tells me that he’s going to keep them but not give me the chickens, and if I complain he’s going to ventilate my spleen with his handy new invention “sword”, then we don’t have a free market.
But funny thing is, now that Thag has set himself up as the new ruler of our village (calls himself by a funny new word “king”), he suddenly has a conflict. Of course, he makes his living by stealing what the rest of us produce. But he also has an interest in making sure there’s more stuff to steal. So while he’s allowed to steal our stuff, nobody else is. If anyone besides Thag steals my baskets, Thag will ventilate his spleen. That means I only have to worry about Thag, and as long as I give him enough baskets to keep him happy, I can make baskets and trade them for other goods and services without worrying about getting robbed.
So Thag, out of greed, will protect my economic rights. If he takes a long-term view. Unfortuntely many rulers throughout history haven’t shown such enlighted self-interest.
So from the beginning markets have had free characteristics and unfree characteristics. But as time went on people noticed that the more an industry resembled what Adam Smith described–low barriers to entry, perfect information, and so on–the better off the customers of that industry were. Not that the industry inself was better off, but the rest of us were better off. And since everyone who works at one particular job or industry relies on hundreds of thousands of other workers and industries, they are better off under a general free market even though they’d prefer that their particular industry was not a free market.
So it’s not particularly the competitors of big powerful corporations that have an interest in preserving the freeness of that marketplace, but rather the customers.
And no market can be completely free, that’s not the point. The point is that our regulation of the marketplaces should be intended to try to make them more free, not less. There are interested parties constantly at work to undermine free markets. Sometimes they use market power. Sometimes they bribe government officials to grant them favors. Sometimes they just advocate for more complexity of regulation, because greater complexity means higher barriers to entry and bad information to consumers. So sometimes making a market more free means repealing old laws that make markets less free, sometimes it means enacting new laws to prevent practices that make markets less free.
And they don’t necessarily exist to make money through selling products, or providing services, or satisfying wants or needs. They exist to make money, period. Especially now that raw numbers, in the form of shareholder value, are the first and last measure of performance.
We hear a lot about green or socially useful investment or business practices. I maintain that as long as there is even one totally venal sonofabitch in the market who puts money first, last, and always, then any other approach to business can’t compete well enough to keep going.
It’s a jungle out there because there will always be people who believe it is, and who act like it is. That’s why we need social checks on the market: to make sure there’s a place for business that doesn’t run by jungle law.
So unless the entire human race is transformed into perfect angels, capitalism won’t work?
What does it even mean to “put money first, last, and always”?
Thing is, even corporate sharks don’t really care about money, they care about what money buys them. Power, influence, social standing, hot chicks/dudes, premium goods and services (which they like because premium goods show off their social standing).
So suppose you have three bakers in your town. Two are ordinary human beings, while another is an amoral sociopath.
What difference does that make to you, the customer? How will you know? Because if the amoral sociopath really only cared about making money, he’d predend to be a normal human, because normal people don’t like dealing with psychopaths (cite: Reservoir Dogs).
What insuperable business advantage does the sociopath have over regular folks?
He has a lot more means at his disposal to put them out of business. For that reason, he gets to make the rules.
And BTW, it doesn’t apply to bakers, or indeed, anyone who has to deal daily with normal people. Real power today lies in knowing how to react to numbers on a screen. And why do you suppose that is?
And even those who want the pretty baubles of life know the attitude they have to have to earn them. Numbers on a screen come first. Not your bros, not your hos, not your ski lodge in Zermatt, because without the numbers, there is nothing else.
There there, I am sure even proud libertarians have learned a lesson. . But I am not talking of right now. You libertarians were proudly talking about the invisible hand ,and the best government is the one that governs least, and that the market is self correcting yadda yadda yadda. It was a strong belief and actually proffered as good argument against regulation for a long time. It was horrible then and is even worse now. The libertarians are a little quieter now since Greenspan has declared he was wrong. I still see posters talk of leaning toward libertarian beliefs like it is a good thing. It is a big crap pot of sophistry. I don’t know why more people did not laugh out loud when our posters declared it a wise strategy.
You are a suck up. When the crash came you argued that Paulson and his entourage were extremely well qualified to lead us out of the mess they caused. The were Ivy League MBAs after all. You saw highly qualified financial geniuses. I saw thieves of the highest order. Their asses should be in jail. So now they are enjoying the fruits of getting their own people in charge of handling trillions of tax payer dollars.
You guys declared the economy to be a thing of beauty for years.
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/25/AR2009052502108.html This is the kind of advice you shouted down.
Is intelligence needed? No.
Is education needed? No.
Do other species have free markets? Yes, except for maybe ants and bees, or one could argue that they’re market exists in breeding.
I’ve hung out with Anarcho-Capitalists in college, and according to them, they’re convinced that the natural order of things is the free market. They say that as long as one person can outproduce something better than another person, scarce trading of goods and services will continue to exist.
I’m convinced that the natural order of things would be feudalism. But, as Lemur states, if all I have to do is count on paying off Thag the King, then my market is relatively free.
Mind you, with out intelligence and education (and aren’t those really the same thing?), this market that does exist will be prone to market failures (which will self-correct, probably painfully) and won’t produce a lot of wealth. It will probably be largely agrarian/barter based and highly inefficient.
Are you saying you don’t know those are companies that owe their success to government backing. It follows logically with the previous post. They did not have to compete.
Did you even read my message?
You seem to think that being pro-big government is the same as being anti-big business, and vice versa. But it’s not. Power of big business is enhanced by the power of big government, and politicians are largely funded by big business.
I don’t know when you lefty types will figure this out. You seem to believe that if you just get the right person into the government, they’ll get rid of the influence of big business, crack down on the rich guys, and everything will by hunky-dory.
But it never works out that way. You won’t even find that in communist countries. The Soviet Union was full of rich guys. They had limousines and private Dachas in resort areas and access to the best goods the west could import.
A while ago, I posted a chart which showed the percentage of wealth held by the top 5% of Americans. It has stayed the same for 80 years, through many different marginal tax rates, through liberal Democratic administrations and Conservative Republican administrations.
The U.S. has the second highest corporate tax rates in the world - and some of the lowest actual corporate taxes. Why? Because government and business are in bed with each other, and over the years the businesses have successfully lobbied for so many loopholes and tax credits that their effective taxes are low.
“Regulatory Capture” is well known. GE is currently lobbying hard for cap and trade and other environmental regulations. You know why? Because GE makes windmills, nuclear power plants, and the control hardware and software factories will have to buy if the government forces them to change. GE’s in it for the bucks, not the planet. You may approve of that right now because their interests are temporarily aligned with yours, but I guarantee that if something you don’t like comes along that GE will benefit from, they’ll lobby for that too.
Farm subsidies, which were originally proposed to help small family farmers survive, almost all now go to huge agri-businesses like Monsanto and Archer Daniels Midland.
Have a look at the current health care debate - the Obama administration has been working feverishly to cut deals with big Pharma, with the AMA, and with other special interests to get their support for the legislation. And they’re using the same executive privilege that Bush used to avoid releasing the lists of people they’ve paid off.
And I guarantee that once the health care bill passes, and the activists move on to the next big issue and the public stops paying attention, one group will be left - the lobbyists for the affected industries. And they will constantly prod and pressure the government for changes that benefit them and hurt their competitors. That will never end.
And who gets hurt by all this? Everyone who isn’t connected. Small startup businesses. Entrepreneurs. Independent contractors. The poor. Anyone who can’t afford to keep a bevy of lawyers and lobbyists in Washington to look after their interests.