# Success and failure off the free market **URL:** \ **Category:** Great Debates\ **Created:** [August 21, 2016, 3:18pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506 "2016-08-21T15:18:40Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![boffking](https://avatars.discourse-cdn.com/v4/letter/b/858c86/32.png) [@boffking](https://boards.straightdope.com/u/boffking)\ **Post date:** [August 21, 2016, 3:18pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/1 "2016-08-21T15:18:40Z")
Inspired by the thread on private prisons. That is something the free market fails miserably at. The computer industry on the other hand, is a perfect example of free markets working for the benefit of all parties. What are other examples where the free market is either massively successful, or fails horribly? I think when the goal is to rely on captive markets, it breaks down. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [August 21, 2016, 5:04pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/2 "2016-08-21T17:04:31Z")
In what way is the prison market a free market? I feel like Winston Smith all of a sudden. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 21, 2016, 5:24pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/3 "2016-08-21T17:24:23Z")
> [@WillFarnaby](#): > > In what way is the prison market a free market? I feel like Winston Smith all of a sudden. There were many from the rational, skeptic groups and from the left that did feel like Winston Smith a long time ago. [https://www.prisonlegalnews.org/news/2011/oct/15/the-failed-promise-of-prison-privatization/](https://www.prisonlegalnews.org/news/2011/oct/15/the-failed-promise-of-prison-privatization/) > [@](#): > > We have been experimenting with prison privatization in the U.S. now for over twenty-five years. The privatization idea originated out of a notion that the private sector, with its competition-driven efficiency and innovation, could operate prisons of higher quality and lower cost than the public sector. Create a market for incarceration services, the argument ran, and the market will work its magic, improving prison conditions and rehabilitative outcomes while saving the taxpayers millions of dollars. That market has effectively been created over the past quarter century and we have now arrived at a place where prison privatization has been studied extensively and evaluated rigorously. > > Although hyperbole continues to propel prison privatization policy along, research findings are incontrovertible: even in the best private prisons, quality of prisoner care is no better than in public prisons and the cost advantage of privatization, which initially accounted for minimal savings, is steadily eroding as the private prison industry matures. > > The big promises of prison privatization – less cost, higher quality – have simply not materialized. Despite these disappointing results, prison privatization advocacy maintains traction in diverse jurisdictions as policymakers from Ohio to Florida and from Maine to California seek expedient solutions to budget shortfalls triggered by a lingering great recession. The reality is that the ones that owe those jails did promise and talked about the free market as the framework where the jails would work. Or course it is silly to talk as if the prisoners could choose, the choosing is done by the local governments supposedly with the jailers competing for the contracts, or by competing for inmates from other counties or even states. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [August 21, 2016, 6:24pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/4 "2016-08-21T18:24:31Z")
Nm ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [August 21, 2016, 6:26pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/5 "2016-08-21T18:26:09Z")
> [@GIGObuster](#): > > There were many from the rational, skeptic groups and from the left that did feel like Winston Smith a long time ago. > > [The Failed Promise of Prison Privatization | Prison Legal News](https://www.prisonlegalnews.org/news/2011/oct/15/the-failed-promise-of-prison-privatization/) > > The reality is that the ones that owe those jails did promise and talked about the free market as the framework where the jails would work. Or course it is silly to talk as if the prisoners could choose, the choosing is done by the local governments supposedly with the jailers competing for the contracts, or by competing for inmates from other counties or even states. Gotcha. When a lobbyist uses free market rhetoric in order to gain a government granted monopoly in prison operation, the actual free market is to blame. There literally cannot be a free-market in locking people up against their will. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [August 21, 2016, 6:37pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/6 "2016-08-21T18:37:21Z")
> [@boffking](#): > > Inspired by the thread on private prisons. That is something the free market fails miserably at. The computer industry on the other hand, is a perfect example of free markets working for the benefit of all parties. What are other examples where the free market is either massively successful, or fails horribly? I think when the goal is to rely on captive markets, it breaks down. No. I don’t think it is the failure of a free market. The prisoners aren’t customers. The state is. However, in our nation we have laws that govern how we should treat people. Are you suggesting that the state is following the law with regards to human rights in prison? I’d say no the state does not. The state is responsible for the lack of security and conditions in the prisons. That includes privately run prisons or state run prisons. Violence, drugs, murder, abuse, rape are tolerated in many state run institutions. That is a failure of the state and the people. We tolerate and condone abuse of prisoners. That’s a failure of _us._ ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 21, 2016, 7:16pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/7 "2016-08-21T19:16:48Z")
> [@WillFarnaby](#): > > Gotcha. When a lobbyist uses free market rhetoric in order to gain a government granted monopoly in prison operation, the actual free market is to blame. > > There literally cannot be a free-market in locking people up against their will. Like I said, what you say is silly. Again, if the free marketers were not there to lobbie for that this would not had taken place. And again the free market refers to what was promised, competition from several private prisons to lower prices and deliver good service to the state in this case. It did not happen. ---
**Author:** ![PastTense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pasttense/32/14550_2.png) [@PastTense](https://boards.straightdope.com/u/PastTense)\ **Post date:** [August 21, 2016, 7:24pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/8 "2016-08-21T19:24:14Z")
Obviously the free market does not do well with environmental issues: if pollution doesn’t cost anything then companies will pollute if it is cheaper than non-polluting. Natural monopolies are a big issue of concern. It is not clear when these should be operated by the government (post office) or private industry (cable TV/internet). Health insurance is a horrible mess in the U.S. We have the highest price system in the world, millions lack coverage, and the health care results are only average among the industrialized countries. Private industry works well for the vast majority of things–as long as there is adequate environmental, social, safety… regulation. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 21, 2016, 7:24pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/9 "2016-08-21T19:24:17Z")
Getting back on topic, I don’t see the computer industry as a good example of the free market at work; quite the opposite. The history of the computer industry is the story of how Microsoft established a de facto monopoly. If a government agency had done the same thing to computers that Microsoft had, people would rightfully be denouncing it as the worst sort of suppression of the free market. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 21, 2016, 7:27pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/10 "2016-08-21T19:27:35Z")
> [@PastTense](#): > > Health insurance is a horrible mess in the U.S. We have the highest price system in the world, millions lack coverage, and the health care results are only average among the industrialized countries. In my opinion, health care should be treated like education or the police; as a public service provided by the government not as a free market for private companies. ---
**Author:** ![DinoR](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dinor/32/2821_2.png) [@DinoR](https://boards.straightdope.com/u/DinoR)\ **Post date:** [August 21, 2016, 7:55pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/11 "2016-08-21T19:55:11Z")
In between the simplistic positions of markets are super awesome and markets suck is the economics which generally includes the concept of market failures. From the wiki article on [market failures](https://en.wikipedia.org/wiki/Market_failure) > [@](#): > > Market failures are often associated with time-inconsistent preferences,[5] information asymmetries,[6] non-competitive markets, principal–agent problems, externalities,[7] or public goods.[8] That’s a whole list of categories of market failures that could have examples under each. There’s also the concept of government failures. Just because government intervenes to try and correct a market failure doesn’t mean it gets it right. It may produce worse results than the market without correction even when failures are present. Government intervention can also produce failures when the motivation is a perceived failure because the efficient (or at least less inefficient) outcome is perceived as unfair or undesirable. ---
**Author:** ![boffking](https://avatars.discourse-cdn.com/v4/letter/b/858c86/32.png) [@boffking](https://boards.straightdope.com/u/boffking)\ **Post date:** [August 21, 2016, 8:19pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/12 "2016-08-21T20:19:39Z")
> [@Little\_Nemo](#): > > Getting back on topic, I don’t see the computer industry as a good example of the free market at work; quite the opposite. The history of the computer industry is the story of how Microsoft established a de facto monopoly. If a government agency had done the same thing to computers that Microsoft had, people would rightfully be denouncing it as the worst sort of suppression of the free market. I was actually thinking of PC hardware when I said the computer industry. The story of that industry is how IBM designed computers to use interchangeable parts, and then the market exploded with various manufacturers. The ensuing competition lead to massive innovation. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [August 21, 2016, 9:25pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/13 "2016-08-21T21:25:29Z")
> [@boffking](#): > > I was actually thinking of PC hardware when I said the computer industry. The story of that industry is how IBM designed computers to use interchangeable parts, and then the market exploded with various manufacturers. The ensuing competition lead to massive innovation. The computer industry is an excellent example of the interaction of government and the free market. The transistor got invented at a regulated monopoly, which used its monopoly earnings for research. The internet itself came out of government funded projects. The TI development of the integrated circuit came out of their defense division, and the military was a big early customer of ICs. PCs were quite late - and in any case by the late 1980s there was worry that they were stalling out due to lack of applications (the famous you can store recipes on one, what else.) The web fixed that problem. And the web came out of a government funded research institution also. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [August 21, 2016, 9:37pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/14 "2016-08-21T21:37:19Z")
> [@boffking](#): > > I was actually thinking of PC hardware when I said the computer industry. The story of that industry is how IBM designed computers to use interchangeable parts, and then the market exploded with various manufacturers. The ensuing competition lead to massive innovation. I tend to think of the software as the important half of the computer industry. The hardware is just a means of delivering the software. ---
**Author:** ![Captain\_Amazing](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@Captain\_Amazing](https://boards.straightdope.com/u/Captain_Amazing)\ **Post date:** [August 21, 2016, 10:26pm UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/15 "2016-08-21T22:26:31Z")
> [@GIGObuster](#): > > Like I said, what you say is silly. Again, if the free marketers were not there to lobbie for that this would not had taken place. And again the free market refers to what was promised, competition from several private prisons to lower prices and deliver good service to the state in this case. > > It did not happen. You can’t really have a free market when there’s only one customer, though. That’s called a monopsony, and it’s not free in the same way a monopoly is; with just one customer, the customer can unilaterally dictate terms to the supplier. The buyer has choice, but the seller doesn’t. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [August 22, 2016, 1:14am UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/16 "2016-08-22T01:14:43Z")
> [@GIGObuster](#): > > Again, if the free marketers were not there to lobbie for that this would not had taken place. What does “lobbie” mean? I can’t find it in any dictionary. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [August 22, 2016, 1:30am UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/17 "2016-08-22T01:30:01Z")
My bad, that was supposed to be **lobby**. > [@Captain\_Amazing](#): > > You can’t really have a free market when there’s only one customer, though. That’s called a monopsony, and it’s not free in the same way a monopoly is; with just one customer, the customer can unilaterally dictate terms to the supplier. The buyer has choice, but the seller doesn’t. Actually I’m agreeing with this, it required a lot of magical thinking for the proponents of private prisons to get going. Magic was going to get us efficient jails thanks to privatization and some free market. [http://civilrights.findlaw.com/other-constitutional-rights/private-jails-in-the-united-states.html](http://civilrights.findlaw.com/other-constitutional-rights/private-jails-in-the-united-states.html) > [@](#): > > Private jails, prisons and detention centers have a long history in the U.S., as far back as 1852 when San Quentin was the first for-profit prison in the U.S. (it is currently state-owned). A more recent resurgence in private prisons came in the wake of wide-spread privatization that took place during the 1980s. Prior to the 1980s, some aspects of prison management had been privatized (services), but overall management had still been held by federal and state authorities. Currently there are over 150 private jails, prisons and detention centers in the U.S. > > Why Private Jails Became an Attractive Option > > In combination with an overall privatization push by President Reagan, prison populations soared during the “war on drugs” and prison overcrowding and rising costs became a contentious political issue. Private business stepped in to offer a solution, and the era of privately run prisons began. Privately run prisons promised increased, business-like efficiency, which would result in cost savings and an overall decrease in the amount that government would have to spend on the prison system while still provided the same service. It was also theorized that privately run prisons would be held more accountable, because they could be fined or fired, unlike traditional prisons (although the counter point is that privately run prisons are not subject to the same constitutional constraints that state-run prisons are). Well, there you go again… ---
**Author:** ![Trinopus](https://avatars.discourse-cdn.com/v4/letter/t/2bfe46/32.png) [@Trinopus](https://boards.straightdope.com/u/Trinopus)\ **Post date:** [August 22, 2016, 1:30am UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/18 "2016-08-22T01:30:55Z")
> [@D\_Anconia](#): > > What does “lobbie” mean? I can’t find it in any dictionary. You’ve made some typos yourself, if memory serves. You denied it, once, and challenged us to prove it…which we rather easily did. Glass houses and bricks. ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [August 22, 2016, 6:34am UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/19 "2016-08-22T06:34:55Z")
> [@Little\_Nemo](#): > > Getting back on topic, I don’t see the computer industry as a good example of the free market at work; quite the opposite. The history of the computer industry is the story of how Microsoft established a de facto monopoly. And Microsoft is in the process of losing that monopoly. Chances are your smart phone runs Android, not Windows Phone. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [August 22, 2016, 8:25am UTC](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506/20 "2016-08-22T08:25:07Z")
> [@WillFarnaby](#): > > There literally cannot be a free-market in locking people up against their will. :smack: By this logic, I suppose chicken farms are not part of a “free market” if the chickens are held involuntarily. L.O.L. [Next page](https://boards.straightdope.com/t/success-and-failure-off-the-free-market/763506.md?page=2)