Welcome to the Free Talk Live bulletin board system!
This board is closed to new users and new posts.  Thank you to all our great mods and users over the years.  Details here.
185859 Posts in 9829 Topics by 1371 Members
Latest Member: cjt26
Home Help
+  The Free Talk Live BBS
|-+  Free Talk Live
| |-+  General
| | |-+  Is a free-market economy perfect?
Pages: 1 [2]   Go Down

Author Topic: Is a free-market economy perfect?  (Read 5407 times)

0 Members and 1 Guest are viewing this topic.

Evil Muppet

  • Offline Offline
  • Posts: 5487
    • View Profile
Re: Is a free-economy perfect?
« Reply #15 on: October 03, 2009, 01:06:26 PM »

How about this. 

The market is based upon consumer preference and people are frequently insane.  The only thing more insane than a person is a group of people. 

market externalities. 
Logged
Now you see that evil will always triumph, because good is dumb.

BobRobertson

  • Offline Offline
  • Posts: 929
    • View Profile
Re: Is a free-economy perfect?
« Reply #16 on: October 03, 2009, 01:20:58 PM »

Obviously it is not infallible or perfect. However it is the most moral system of exchange.

Keep in mind that the failure of an enterprise is not a market failure, it is actually a successful correction of a bad investment.

People taking chances, businesses that turn out not to be profitable, is a sign of a healthy economy. People have confidence and savings to spend on trying new things.

A "bust" however is a symptom of a problem. Many people all making large malinvestments at the same time means that something was wrong with the market signals of price, savings, interest, etc. That's why when the Federal Reserve makes a move, huge numbers of people are effected, and while some get rich most end up liquidating the malinvestments.

So booms and busts are not "market failures" at all. They are the results of intervention, even well meaning intervention.

Quote
Because I believe that in a free market there will still be the ability for some people to acquire the means to have excessive differential advantage against others trying to enter any particular market.

Define "excessive"? That's an opinion, which is different between different people. So who gets to decide what is or is not "excessive"?

Does the fact that Donald Trump has lots of money and I don't mean that the market has to be corrected? Does the fact that Bill Gates made a huge fortune selling shoddy software mean that the market has to be corrected?

No, because in both cases no coercion was ever used. Donald Trump and Bill Gates made deals with others voluntarily that both parties believed they benefitted by. That's all. They did it far better than I, so they have made far more wealth than I in doing so.

Trying to correct for "excessive" success or "excessive" power will have only one result: Everyone will be worse off.

Quote
The consequence being that new inventions and ideas will be suppressed (by the market leader's advantage) in order for the status quo of that particular market to retain its advantage for the sake of extended profits. (ie. Withholding the true state of technology in order to sell minor upgrades over a long period of time.)

Albeit, in a free market this advantage wouldn't hold nearly as long as it does with a coercive monopoly.

Exactly. All interventions do is raise the costs of competition thereby protecting the established, vested interests. Licensing, zoning, taxation, incorporation, copyright, patent, all make it harder for a newcomer to enter a field, or undercut the established providers, preventing competition and allowing those already established to charge higher prices for lower quality products.

Quote
Some say that they deserve to reap the profits. I question the ethics of that matter.

So when is it ethical to initiate force?

I have a total monopoly over my own output. If I am the only person who can perform a particular operation and save lives, is it ethical to put a gun to my head and force me to perform that operation?

Is it ethical to require me to perform the operation at a lower price than I would choose to charge?

Ah, but is it ethical for me to use coercion over others to prevent competition, if someone else figures out how to do that same operation? That is the reasoning behind copyright/patent, after all, the most widely supported market interventions there are.

I will posit that it is coercion that is unethical, not profits.
Logged
"I regret that I am now to die in the belief that the useless sacrifice of themselves by the generation of 1776 to acquire self-government and happiness to their country is to be thrown away by the unwise and unworthy passions of their sons, and that my only consolation is to be that I live not to weep over it."
-- Thomas Jefferson, April 26th 1820

think4yourself

  • Voluntarist / Anarchist
  • Offline Offline
  • Posts: 30
  • Forgiving Trolls
    • View Profile
Re: Is a free-economy perfect?
« Reply #17 on: October 03, 2009, 01:21:58 PM »

Okay, it's not perfect. Now, please list all of the examples of socialist economies that ARE perfect.

No such thing. That wasn't my intention.
Logged
[ insert something witty and freedom-oriented here ]

think4yourself

  • Voluntarist / Anarchist
  • Offline Offline
  • Posts: 30
  • Forgiving Trolls
    • View Profile
Re: Is a free-economy perfect?
« Reply #18 on: October 03, 2009, 01:55:31 PM »

Obviously it is not infallible or perfect. However it is the most moral system of exchange.

Keep in mind that the failure of an enterprise is not a market failure, it is actually a successful correction of a bad investment.

People taking chances, businesses that turn out not to be profitable, is a sign of a healthy economy. People have confidence and savings to spend on trying new things.

A "bust" however is a symptom of a problem. Many people all making large malinvestments at the same time means that something was wrong with the market signals of price, savings, interest, etc. That's why when the Federal Reserve makes a move, huge numbers of people are effected, and while some get rich most end up liquidating the malinvestments.

So booms and busts are not "market failures" at all. They are the results of intervention, even well meaning intervention.

Quote
Because I believe that in a free market there will still be the ability for some people to acquire the means to have excessive differential advantage against others trying to enter any particular market.

Define "excessive"? That's an opinion, which is different between different people. So who gets to decide what is or is not "excessive"?

Does the fact that Donald Trump has lots of money and I don't mean that the market has to be corrected? Does the fact that Bill Gates made a huge fortune selling shoddy software mean that the market has to be corrected?

No, because in both cases no coercion was ever used. Donald Trump and Bill Gates made deals with others voluntarily that both parties believed they benefitted by. That's all. They did it far better than I, so they have made far more wealth than I in doing so.

Trying to correct for "excessive" success or "excessive" power will have only one result: Everyone will be worse off.

Quote
The consequence being that new inventions and ideas will be suppressed (by the market leader's advantage) in order for the status quo of that particular market to retain its advantage for the sake of extended profits. (ie. Withholding the true state of technology in order to sell minor upgrades over a long period of time.)

Albeit, in a free market this advantage wouldn't hold nearly as long as it does with a coercive monopoly.

Exactly. All interventions do is raise the costs of competition thereby protecting the established, vested interests. Licensing, zoning, taxation, incorporation, copyright, patent, all make it harder for a newcomer to enter a field, or undercut the established providers, preventing competition and allowing those already established to charge higher prices for lower quality products.

Quote
Some say that they deserve to reap the profits. I question the ethics of that matter.

So when is it ethical to initiate force?

I have a total monopoly over my own output. If I am the only person who can perform a particular operation and save lives, is it ethical to put a gun to my head and force me to perform that operation?

Is it ethical to require me to perform the operation at a lower price than I would choose to charge?

Ah, but is it ethical for me to use coercion over others to prevent competition, if someone else figures out how to do that same operation? That is the reasoning behind copyright/patent, after all, the most widely supported market interventions there are.

I will posit that it is coercion that is unethical, not profits.

Just to clarify, I'm not proposing that a third-party needs to correct these things - not at all. I absolutely agree that coercion is unethical. And I don't think profits are unethical.

By 'excessive', I'll try to explain with an example. Say, I invent a light bulb that will last ten times longer, glow brighter, and use less energy than any other light bulb on the market. Meanwhile, Light Bulb Corp. has developed to a tremendous scale with virtually limited resources at their disposal. If my new light bulb enters the market, their stocks will plummet. Light Bulb Co., could use their advantage and use coercion against me in one way or another to prevent me from entering the market.

I don't know for sure what could prevent this type of situation. Hopefully the market would create some type of protection for inventors.
Logged
[ insert something witty and freedom-oriented here ]

gibson042

  • Non-Aggression Principal since 2006
  • Offline Offline
  • Posts: 948
    • View Profile
    • gibson.mp
Re: Is a free-market economy perfect?
« Reply #19 on: October 03, 2009, 06:51:56 PM »

By 'excessive', I'll try to explain with an example. Say, I invent a light bulb that will last ten times longer, glow brighter, and use less energy than any other light bulb on the market. Meanwhile, Light Bulb Corp. has developed to a tremendous scale with virtually limited resources at their disposal. If my new light bulb enters the market, their stocks will plummet. Light Bulb Co., could use their advantage and use coercion against me in one way or another to prevent me from entering the market.

I don't know for sure what could prevent this type of situation. Hopefully the market would create some type of protection for inventors.


Microsoft has a similar effect on the market, using their overwhelming share to manipulate (or make irrelevant) standards—to the detriment of their competition.  The best defense for those underdogs is cooperation.
Logged
"WOOOOOP  WOOOOOP  WOOOOP EH EH EH EH HHHEEEOOOO HEEEOOOOO" —Rillion

anarchir

  • Extraordinaire
  • Offline Offline
  • Posts: 5103
  • No victim, no crime.
    • View Profile
    • Prepared Security
Re: Is a free-market economy perfect?
« Reply #20 on: October 04, 2009, 12:14:18 AM »

I agree with Bob: Better words than "perfect" would be "healthy" and "efficient."
Logged
Good people disobey bad laws.
PreparedSecurity.com - Modern security and preparedness for the 21st century.
 [img width= height= alt=Prepared Security]http://www.prepareddesign.com/uploads/4/4/3/6/4436847/1636340_orig.png[/img]

BobRobertson

  • Offline Offline
  • Posts: 929
    • View Profile
Re: Is a free-economy perfect?
« Reply #21 on: October 04, 2009, 12:59:54 PM »

If my new light bulb enters the market, their stocks will plummet. Light Bulb Co., could use their advantage and use coercion against me in one way or another to prevent me from entering the market.

The operative words there are "use coercion". And for that specific reason, they are in the wrong.

Let's change your example and eliminate coercion. Say that LBC uses their might and power to create sole-source contracts with the big home-improvement stores like Home Depot and Lowe's, that they get a break on the wholesale price of LBC products if they will not carry your improved bulb.

Or LBC offers you a huge sum of money to abandon your invention with an iron-clad contract that keeps you from telling anyone else how to build them.

You always have the option to ignore them and self-market, of course, and in a "free market" that is always an option since the "barriers to entry" are not artificially raised. That's why I see far more variety as the result of repealing regulation.


Microsoft has a similar effect on the market, using their overwhelming share to manipulate (or make irrelevant) standards—to the detriment of their competition.  The best defense for those underdogs is cooperation.

Microsoft's great coup was to make "Windows" synonymous with the machine itself. Their marketing department will be the study of graduate students for centuries.

While I agree that what Microsoft has been doing is reprehensible, I don't see it as prosecutable. Outside of their use of government monopoly grants, that is, Copyright and Patent, I don't see anything they have done as actual "coercion". The greatest condemnation is that they "changed their own product without telling anyone." Embrace, Extend, Extinguish only effects people who try to use Microsoft products (and their customers, of course). Good reason to use someone else.

Microsoft's masterful negotiation of "sole source contracts" with the computer OEMs has created the impression of power, and certainly earned them lots of short-term money, but in the words of Princess Leia, "The more you tighten your grip, Balmer, the more {computer} systems will slip through your fingers."

Microsoft's abominable behavior in corrupting the ISO deserves universal condemnation. What surprises me is that anyone would still give them money after all this.

Indeed the "competition" to Microsoft is cooperation. The entire Free and Open Source Software environment, BSD, Linux, Minix, GNU/HURD, Xorg, Apache, etc etc etc, is based upon cooperation. As Gibson042 says, in the face of a greedy monopolist-wannabe the best competition is cooperation.

We have the example of a "lack" of government regulation of the computer market, since it's one of the few facets of our lives that does not have any (or much if at all) government regulation, to demonstrate that vigorous, open competition is exactly what has happened. Even in the face of the most powerful and wealthy business in its field using every dirty trick it can, the "good guys" by just cooperating not only survive but thrive!

A free market does not inevitably lead to huge overarching monopolies, because in order to survive there must be constant innovation. Even an established giant in its field can only maintain its position by providing a better product, not just by buying government favors.
Logged
"I regret that I am now to die in the belief that the useless sacrifice of themselves by the generation of 1776 to acquire self-government and happiness to their country is to be thrown away by the unwise and unworthy passions of their sons, and that my only consolation is to be that I live not to weep over it."
-- Thomas Jefferson, April 26th 1820

freeAgent

  • pwn*
  • FTL AMPlifier
  • *
  • Offline Offline
  • Posts: 3660
    • View Profile
Re: Is a free-market economy perfect?
« Reply #22 on: October 04, 2009, 03:46:25 PM »

Another way to ask this question is: Are all the problems/deficiencies in the current un-free economy due solely to government/coercive intervention?

No, individuals and firms make mistakes too and shit happens (natural disasters, etc.).
Logged

BobRobertson

  • Offline Offline
  • Posts: 929
    • View Profile
Re: Is a free-market economy perfect?
« Reply #23 on: October 04, 2009, 08:03:33 PM »

Another way to ask this question is: Are all the problems/deficiencies in the current un-free economy due solely to government/coercive intervention?

No, individuals and firms make mistakes too and shit happens (natural disasters, etc.).

I would also point out that people adapt their business practices to the environment in which they are working. So since there is government/coercive intervention, business takes that into account.

A truly unregulated market is something that few people can imagine, simply because they've never experienced it (or maybe just noticed). So they imagine all kinds of awful things because people tend to fear what they do not understand, and then make up excuses for being afraid.
Logged
"I regret that I am now to die in the belief that the useless sacrifice of themselves by the generation of 1776 to acquire self-government and happiness to their country is to be thrown away by the unwise and unworthy passions of their sons, and that my only consolation is to be that I live not to weep over it."
-- Thomas Jefferson, April 26th 1820
Pages: 1 [2]   Go Up
+  The Free Talk Live BBS
|-+  Free Talk Live
| |-+  General
| | |-+  Is a free-market economy perfect?

// ]]>

Page created in 0.114 seconds with 32 queries.