Can we have examples of free markets? I’m assuming we’re not talking about the U.S. or Western Europe, since business and government have been deeply interconnected for centuries. Is there in fact a society where powerful men do not seek the government to attend to their needs? If so, how did that happen? What’s stopping them?
So you can only have a Free Market if everyone involved plays by the rules. No force, no coercion, no fraud. Okay. Who enforces those rules?
Enforcement of property rights and the rule of law is the role of government.
As many posters have tried to explain above, the free market doesn’t do anything. It’s not a “system”. It has no intention. There is nobody with a hand at the tiller, trying to control something or push something in some direction or the other.
All it is, is a collection of voluntary choices that you and your fellow citizens make of your own accord.
If you don’t like the free market what you are saying is that you don’t want freedom to make choices for yourself.
As has been pointed out, we’ve had formal government for millennia and for the most part life has sucked. We’ve never had freer markets than we have for the last few centuries and the quality of life has increased at an astonishing rate. Indeed, I could cite a dozen or more historians saying that the introduction of centralized government made things much worse, and the hallmark of centralized government is a monopoly on the use of force.
Now, you can say “there’s more exploitation without violence than with” but that sounds like a personal opinion to me, and so I’ll counter it with nothing more than my own; I think you’re wrong. The worst evils are always visited with force and the threat thereof.
Of course you are totally correct in pointing out that free markets and capitalism rely on government to maintain the rule of law. I think the obvious answer to the underlying question “What creates material wealth and security” is that it’s like a machine; you need a number of things to work together. You need freedom of markets, but you also need government, peace, a functioning monetary system…
In another thread the question has been raised as to why the Industrial Revolution happened when and where it did. When you examine the evidence it’s obvious that it happened where and when it did because a combination of critical elements finally came to pass in Britain, starting in the 18th century and really revving up in the 19th. Stable government, freedom, rule of law, solid and complex financial institutions, specific market needs, literacy and a number of critical resources were all part of the equation. And really, that was the birth of modern capitalism.
In bad times, labour will often lose its gains even if big business and government AREN’T in cahoots. Stalinist Russia broke down all labour unions while eliminating big business. Nazi Germany banned labour unions and (contrary to popular belief) was only happy to allow big business to carry along as long as it seemed to be serving the interests of the Party; when it didn’t, the government just shot or threatened to shoot whomever it wanted to get its way. There are no unions, in any real sense, in China, Cuba, or North Korea, places where either there aren’t any big business or big business takes its marching orders from government. Sufficiently bad totalitarianism will kill both capitalism and labour unions.
So why does every free market advocate take it for granted that the Free Market inevitably leads to a beneficial outcome? With no-one in control an undesirable outcome is just as possible, but libertarians never even consider that possibility.
And that’s the fundamental problem with the whole concept:
- Free will is an illusion and people can be easily manipulated. Advertising is proof enough of that.
- People don’t always have access to every necessary piece of information when making decisions.
I guess the first might be disputable, but not the second. Both of these facts will always tip the balance of the free market away from the consumer and towards the producer, who is relatively difficult to influence and has much improved information availability.
Human nature makes a true Free Market impossible, and trying to impose it anyway would lead to a disaster of epic proportions. There will always be the need for a strong force to balance the system for the consumer and that role is best filled by a government.
Yes and government is also conducive to technological progress, see patent office.
A free market DEPENDS on a stable government. I guess you could say taht Somalia has a free amrket too but not in any meaningful sense. Every free market requires police powers to protect property rights, a judicial system to resolve disputes, etc.
Der Trihs is exactly right, Government is the most powerful instrument of material and social progress, this doesn’t mean that governmental power cannot be abused but in the absence of a good stable government, its really hard for anything else to happen.
History is replete with criminals who maintained a monopoly by killing their competitors.
I don’t know how organized and “gopernmental” Ghengic Khan’s mongol horde was but they did a pretty good job of massive scale carnage.
It seems pretty clear to me that “free markets” are inferior to “regulated markets” or are we going to ignore the last few eyars?
Seconded.
The entire concept of *free market *as expressed by conservatives is a farce. The entire thing can be summed up as “have my cake and eat it too.”
To claim the US as a success is a direct counter example to the notion of free markets. The US didn’t get to be the greatest, free-est, best-est, richest country in the world because of free markets. It got that way through decades of heavy government involvement, and a system that was anything but free.
The quote in the OP is just more bullshit populist propaganda that has come to characterize what is conservative in the US. “Keep the government out of my Medicare.” Or more generic, “Go our team!”
Slavery can exist without or without government. The absence of slavery requires government.
Strange. I’d say that slavery requires a structured ‘government’ of some kind in order to make it work, the absence of slavery could be with or without government. So, pretty much the opposite of what you are stating here.
What are your historical examples of slavery existing with or without government ( I assume that’s what you meant to say)? What are your historical examples of only societies with a government having an absence of slavery?
-XT
There doesn’t have to be anyone in charge. The free market results in emergent order.
Who’s in charge of an ecosystem? Who was in charge of designing the English language? Who is in charge of an ant hill? Who was in charge of the evolution that produced humans?
The answer to all of these is ‘no one’. All of these are examples of emergent systems that function efficiently because they have evolved simple rules that lead to complex behaviors without there being a central controlling authority.
This is a very hard concept for a lot of people to grapple with. It’s why some people believe there must be an intelligent designer - that the random processes of evolution couldn’t possibly produce the complex order we see around us.
The free market is the purest form of democracy there is. Every time you spend a dollar, you’re casting a vote. You’re picking winners and losers and asserting your preferences at a very granular level. If you prefer Ford to Chevy, your dollars will make Ford a little stronger and Chevy a little weaker. If enough people feel the way you do, Chevy will lose market share and influence and Ford will gain it.
This is not a trivial effect. Any one transaction may have a small effect, but billions of transactions are carried out every year. The result is organization. Trial and error and iteration cause the markets to shift and change until they meet the desires of the population as expressed through the revealed preferences of spending.
An ant hill is a highly optimized construct. Ant hills appear almost spontaneously where there is an abundance of food. When they do, they exhibit optimal search patterns for finding food and collecting it in the hill. But there’s no bureau of ant management. There’s no king ant scientifically planning search strategies and picking winning and losing ants. It’s a simple rule at heart - ants leave pheromones behind them when they leave the hill. If an ant finds food, it follows its pheromone trail back, reinforcing it. This leads other ants to follow the same, now stronger trail. If they keep finding food, they keep coming back, and the trail grows stronger still.
Ants even have traffic management. If too many ants get on a trail, new ants are forced off it onto parallel trails. If those trails also lead to food sources, they start becoming reinforced, and the size of the traffic lane doubles.
This is all very simple at the lowest level, but when you observe an ant hill in aggregate, it looks like a lot of very complex, yet highly intelligent behavior is going on. Ants fan out and march to exactly where they need to go. It looks like industrial production. But there’s no leader.
The regulatory power of the market itself is not to be underestimated. It’s so strong that it will overpower even despotic governments when they try to thwart it. If a government tries to dictate the price of something, the market will respond in its own way, usually leaded to an unintended consequence for the government.
Now, that doesn’t mean markets lead to good social outcomes for everyone. If they did, there would be no pressure to increase the size of government in the first place. What it does mean, however, is that markets tend to drive towards pareto-optimal economic solutions in response to the revealed preferences of the public at large. If the public values the safety of a product, the product will become safer until the cost of incremental safety improvements is greater than the market is willing to pay. If the public demands SUVs, more SUVs will be made.
The last part of the reason markets work so well is because of prices. Prices are to markets what pheromones are to ants - the mechanism for transmitting necessary information efficiently. For prices to work efficiently, people have to make economic choices that have real consequences.
Markets can fail. Externalities, monopoly power, information asymmetry, and other things can reduce the efficiency of markets or cause them to fail altogether. That’s why you need government. But government is not capable of doing what markets do, which is to efficiently organize the productive capacity of a country and align it with the desires of the people.
The accumulation of wealth and resultant explosion of progress and standards of living required markets, but it required government as well. The best economic system is one in which the government sets and maintains the basic rules and stable legal framework for markets to operate efficiently.
Without government to protect property rights and to correct market failures, you wind up with too many barriers to trade, and people are unwilling to invest in long-term ventures.
But when government starts trying to direct the market and replace market-based organization of production with top-down economic organization, it winds up destroying wealth and ultimately reducing political freedom.
And what does it say about you that you think your example exhibits less coercion than selling an apple?
What if the US got where it is both because of letting exploiters run amok in some eras and providing safeguards for the little guy in other eras?
And what if we need an era of robber barons and widespread economic serfdom every now and then - say, to build infrastructure and GDP - or else we’ll sink into a morass of Third World-like underdevelopment and unrest?
I hope to hell not. I’m just beating the bushes here to see if anyone might see any logic to it based on history.
Except that a free market devoid of any regulation whatsoever very quickly devolves into anything but a “free” market.
We have seen this in the past in the US with the robber barons. A free market, left to itself, moves towards monopoly/oligopoly. Something you barely paid lip service to. This is not a possibility, it is a certainty in an unregulated free market.
That’s all well and good, I’m familiar with the concepts involved and also more-or-less agree with the conclusions at the end (though I suspect we’d disagree if we got into more detail).
I would not dispute the notion that the market is good at something, but the question that never seems to get asked is ‘is the result of the free market where we want to go?’. So the market is very good at allocationg resources (and also taking advantage of ‘commons’ and externalised resouces, but that’s another issue), but what would the perfect allocation of resources actually be an end goal worth acheiving? What would the human cost of this be?
It always seems to me that Free Market advocates just assume that the end result of a Free Market will always be a net positive for humanity, but as far as I’m concerned this is not a given. Nothing in human affairs is that simple.
No one is suggesting a market devoid of any regulation at all, however…at least no one in this thread. That’s a strawman that’s always trotted out by the anti-FM folks who want to justify their own ideas about command economies or at least more heavy regulation and government control. Most of the supposed Free Market advocates I’ve seen on this board have a more balanced viewpoint on this.
But, you see, the robber baron era was facilitated by government intervention. The government and those who controlled it were who enabled that behavior…and, frankly, even that facilitated quite a bit of economic expansion and prosperity in this country. If that’s the worst example of free market excess then it’s light years ahead of the worst examples of excess from government, which was used by another poster as a possible better instrument of material and social progress than the free market.
The trouble is, that the robber baron era wasn’t an example of a free market system…it was an example of crony capitalism and heavy handed government intervention. I think that there is a lot of confusion in this thread as to what a free market is. People seem to be conflating the term to mean capitalism in different forms as well as all sorts of other stuff as well. And I think that this misunderstanding cuts to the heart of the OP’s failure to put the statement that started all this in context, and thus the request for a ‘cite’.
No…it doesn’t. Capitalism combined with government CAN move towards monopolies or oligopolies.
-XT
And here we are, back where we started.
So by your own admission, the free market requires both regulation and government intervention.
When we look at the quote in the OP, we can again see that it is entirely devoid of meaning, and little more than populist propaganda aimed at angering what has become the American Conservative.
Some how in the same breath you can both advocate and admonish regulations. Where regulations require both government and taxes. You want smaller government and lower taxes, and fewer regulations. But you also want regulations, which require bigger government and higher taxes. Simply stated, have your cake and eat it too.
You want to be left alone to play with your toy, but also want your mom close enough to keep other people from taking, and you want your mom to provide the toy, while keeping other people from having toys.
Any idea of free market in the US is because of heavy government regulations and involvement, not in spite of them.
Exactly, confusion promoted and encouraged by the conservative movement, to the betterment of their contributors at the expense of their voters.
No one is arguing against government. So what is your point?
Don’t be obtuse. :rolleyes: