# The failure of the absolute free market system **URL:** \ **Category:** Great Debates\ **Created:** [September 16, 2008, 5:25am UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803 "2008-09-16T05:25:43Z")\ **Posts on this page:** 11\ **Page:** 4
**Author:** ![Polerius](https://avatars.discourse-cdn.com/v4/letter/p/d78d45/32.png) [@Polerius](https://boards.straightdope.com/u/Polerius)\ **Post date:** [September 19, 2008, 7:28pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/61 "2008-09-19T19:28:10Z")
> [@xtisme](#): > > You are right, it’s failed. We should go back to being hunters and gatherers I guess… Where did I put my bow and arrow? 🙂 Seriously, no, we shouldn’t go back to that, but we do need to invent a new “game” to play. It’s not going to happen now. It will take decades if not centuries for a viable contender to the current scheme to evolve and replace it. If you think back to when Europe was a feudal society, someone may have said “You know, I don’t like this and this aspect of the way we run our society”. In response, someone may have replied “You are right, it’s failed. We should go back to being hunters and gatherers I guess.” But of course, the first person couldn’t just sit there and invent the current market-based economy out of whole cloth and implement it in a couple of years. It took decades and centuries for society to move from that old system to the one we have now. And I expect it will take a long time for the current system to be replaced by a better one. But it will. Because it is broken. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [September 19, 2008, 7:30pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/62 "2008-09-19T19:30:03Z")
> [@Polerius](#): > > They could have let it all collapse, which would have demonstrated its failure, but that would come at a huge cost to all citizens and society as a whole. So they decided to stop it from heading over the cliff. The failure of the system that was, essentially, created in 1929 by law, which forced investment banking–a higher-risk venture–to be separated from commercial banking, essentially concentrating risk in a sector? I’m surprised it lasted as long as it did. > [@](#): > > The financial system has failed. You’re right, the system we imposed on banking has shown itself to have problems. > [@](#): > > It’s like Daddy lets his kids try their hair-brained scheme on how to make money, and even though it works for a while and they make a lot of money, after a while the scheme goes sour and not only are the kids losing all their money, but the situation is threatening the entire family’s financial situation, and may even destroy the whole neighborhood. More like daddy forced them to create schemes, while paying them to do it from mom’s purse. ---
**Author:** ![Polerius](https://avatars.discourse-cdn.com/v4/letter/p/d78d45/32.png) [@Polerius](https://boards.straightdope.com/u/Polerius)\ **Post date:** [September 19, 2008, 8:24pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/63 "2008-09-19T20:24:14Z")
> [@erislover](#): > > The failure of the system that was, essentially, created in 1929 by law Remind me again _why_ the system was created in 1929? Oh, yes, because of the **crash** and utter failure of the previous system. ---
**Author:** ![Polerius](https://avatars.discourse-cdn.com/v4/letter/p/d78d45/32.png) [@Polerius](https://boards.straightdope.com/u/Polerius)\ **Post date:** [September 19, 2008, 8:37pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/64 "2008-09-19T20:37:11Z")
Let me put it another way: The fundamental flaw with the current financial system is that it is a positive feedback system. Positive feedback systems are inherently unstable. The only way to stabilize a positive feedback system is with constant and frequent control. So, we either keep the current system and increase the level and frequency of control, or we find a new system that does not suffer from positive feedback. The latter will take a long time to develop (if ever), so we should be converging to the former option. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [September 19, 2008, 9:24pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/65 "2008-09-19T21:24:45Z")
> [@Polerius](#): > > Remind me again _why_ the system was created in 1929? > > Oh, yes, because of the **crash** and utter failure of the previous system. Quite so. Do you suppose that the problem, then, might not have been the lack of _more_ regulation but a lack of _good_ regulation? ---
**Author:** ![Polerius](https://avatars.discourse-cdn.com/v4/letter/p/d78d45/32.png) [@Polerius](https://boards.straightdope.com/u/Polerius)\ **Post date:** [September 19, 2008, 9:48pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/66 "2008-09-19T21:48:14Z")
> [@erislover](#): > > Quite so. Do you suppose that the problem, then, might not have been the lack of _more_ regulation but a lack of _good_ regulation? Possibly. Do you also agree, though, that if, over the decades/centuries, we try different types of regulations and always end up with a crash, that maybe there is something fundamentally unsound about the system? ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [September 19, 2008, 10:58pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/67 "2008-09-19T22:58:19Z")
> [@Polerius](#): > > Do you also agree, though, that if, over the decades/centuries, we try different types of regulations and always end up with a crash, that maybe there is something fundamentally unsound about the system? It’s possible, maybe even likely, but unless we know what it is, can we fix it? ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [September 20, 2008, 5:07pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/68 "2008-09-20T17:07:10Z")
> [@Polerius](#): > > Do you also agree, though, that if, over the decades/centuries, we try different types of regulations and always end up with a crash, that maybe there is something fundamentally unsound about the system? Let’s look at it a different way, as my last post may be seen to express something I did not intend. I am all for experimentation in creating a better free market. But supposing we could prevent various crashes is like saying we could create a system that cannot fail. Even rudimentary skepticism of the lowest order should be able to see that this is an engineering task that itself is destined to fail. Suggesting that there may be incentives the government can create that will avert some failures better is not to say that we cannot have economic failure. It will just be a _different_ failure… maybe even a more spectacular one. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [September 21, 2008, 8:58pm UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/69 "2008-09-21T20:58:28Z")
I know no one is paying attention to me but what the heck. I insist mixing market freedom and market regulation is a fallacy and only leads to misdiagnosing the problem. The problem in this case has zero to do with freedom of the market (which is a good thing) and everything to do with regulation of the market. The problem was that the market was poorly regulated, not that it had too much freedom. Freedom is always a good thing. Regulation can be good, bad, or neutral. In this case the relevant regulation was unsatisfactory and it was bad because of political motives. There are plenty of issues where politicians do not want to be the ones to burst a bubble and they may even contribute to create one but this is an argument against politicians, not against freedom of the markets. ---
**Author:** ![devilsknew](https://avatars.discourse-cdn.com/v4/letter/d/4da419/32.png) [@devilsknew](https://boards.straightdope.com/u/devilsknew)\ **Post date:** [September 25, 2008, 8:04am UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/70 "2008-09-25T08:04:45Z")
> [@xtisme](#): > > Just be ready for the screams of the people who THINK that because they invested the money it should be a sure thing, and who are going to be pissed off because shit happened… > > -XT Yea, it’s almost like they feel **entitled** or live in a **welfare state** or something. This is to you, Repugs… Don’t ever use that fucking strawman weak ass excluded middle argument on this board again. ---
**Author:** ![devilsknew](https://avatars.discourse-cdn.com/v4/letter/d/4da419/32.png) [@devilsknew](https://boards.straightdope.com/u/devilsknew)\ **Post date:** [September 25, 2008, 8:26am UTC](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803/71 "2008-09-25T08:26:38Z")
What a fucking joke Shrub was tonight. Even in his failure he propogated the nationalistic spin that we are a “Capatilistic Democracy”. There was no Yellow cake and he lied. Just like him. It’s “Social Democracy”…there, now was that so hard? [Previous page](https://boards.straightdope.com/t/the-failure-of-the-absolute-free-market-system/463803.md?page=3)