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Author Topic: Issues about a free market.  (Read 3052 times)

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Ben

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Issues about a free market.
« on: February 26, 2011, 08:34:03 PM »

Although I've accepted a true free market is a better system than a government run "free market", I'm still not greatly knowledgeable about all the possible pitfalls of a free market.

I'm hung up on one issue that may arise in a true free market.

Say you run a business and you're doing well. A competitor decides they want to ruin your reputation, and business, and start selling dodgy and harmful products inside packaging that is exactly the same as your own. What do you do? How would the free market combat this without intervention by government?

Also, whats to stop robber barons rising up in a free market and, apparently, making everyone's life hell?
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Pizzly

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Re: Issues about a free market.
« Reply #1 on: February 26, 2011, 09:01:11 PM »

Although I've accepted a true free market is a better system than a government run "free market", I'm still not greatly knowledgeable about all the possible pitfalls of a free market.

I'm hung up on one issue that may arise in a true free market.

Say you run a business and you're doing well. A competitor decides they want to ruin your reputation, and business, and start selling dodgy and harmful products inside packaging that is exactly the same as your own. What do you do? How would the free market combat this without intervention by government?

Also, whats to stop robber barons rising up in a free market and, apparently, making everyone's life hell?

There's every incentive to prevent this, so I'm sure it would happen. Right off my head: All orders are recorded and are in a company run database. There might be multiple levels of seceruty to prevent counterfit, not all of which would be openly public I'm sure.

And to robber barons, what do ya mean? When there's little competition and prices rise, other firms enter the industry. When too many firms enter and prices go too low, the ones who can't withstand the operating cost will have to leave. It regulates itself.
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LTKoblinsky

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Re: Issues about a free market.
« Reply #2 on: February 26, 2011, 09:25:33 PM »

One. The counterfeiter is harming people. That competitor would find staying in business (let alone in society) extremely difficult as producing even bad products is expensive and he'd be harming himself as well, even to the point of driving himself out of business.
Two. A highly profitable industry attracts competition. Also, Robber Barons are mostly a myth. There are political entrepreneurs in history (men who got rich off of government subsidies), but the exploits of these men are unjustly projected onto men like Carnegie, Hill, and Vanderbilt.
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Sam Gunn (since nobody got Admiral Naismith)

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Re: Issues about a free market.
« Reply #3 on: February 26, 2011, 09:41:35 PM »

Although I've accepted a true free market is a better system than a government run "free market", I'm still not greatly knowledgeable about all the possible pitfalls of a free market.

I'm hung up on one issue that may arise in a true free market.

Say you run a business and you're doing well. A competitor decides they want to ruin your reputation, and business, and start selling dodgy and harmful products inside packaging that is exactly the same as your own. What do you do? How would the free market combat this without intervention by government?

Also, whats to stop robber barons rising up in a free market and, apparently, making everyone's life hell?
Sounds like fraud.
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Zhwazi

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Re: Issues about a free market.
« Reply #4 on: February 27, 2011, 12:25:22 AM »

Although I've accepted a true free market is a better system than a government run "free market", I'm still not greatly knowledgeable about all the possible pitfalls of a free market.

I'm hung up on one issue that may arise in a true free market.

Say you run a business and you're doing well. A competitor decides they want to ruin your reputation, and business, and start selling dodgy and harmful products inside packaging that is exactly the same as your own. What do you do? How would the free market combat this without intervention by government?

Also, whats to stop robber barons rising up in a free market and, apparently, making everyone's life hell?
Sounds like fraud.
Thank the gods somebody else saw that. Definitely fraud.
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Ben

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Re: Issues about a free market.
« Reply #5 on: February 27, 2011, 02:13:23 AM »

Thanks for the responses. Yeh, I was thinking another company using your logo might fall under some sort of I.P. law or something. But then I.P. laws are another minefield. Fraud sounds about right, but I'm just wondering how you'd make the offending company accountable?

I should have been more clear about robber barons. Basically around the 1900s in America when a few people became rich and powerful and apparently used their money and power to squash competition. I've only done very light reading on it, but as near as I can understand, was that about when government started regulating the marketplace, and the reason for it?
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Zhwazi

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Re: Issues about a free market.
« Reply #6 on: February 27, 2011, 04:01:26 AM »

Government regulation in the US has been growing exponentially for a long time. You can liken it to a ball rolling down a gradual slope. It was always rolling from the very beginning, but people like to point to specific times and say "This right here is when it REALLY started rolling". Sure, it was slow at first, but there isn't really a point where there wasn't some form or another of regulation. Libertarian-minded people have been complaining about it since before the revolution (they were complaining louder before that). Every war did give it a good string push downhill.

Regulations encourage formation of large businesses that can absorb the costs. Regulation of large businesses itself came about because of the problem caused by side-effect of earlier regulations. If you're new to libertarianism in general you'll see a lot of this sort of thing, regulators using the only tools available to them, regulations, to solve the problems the created previously by application of regulations.

About dealing with fraud, use whatever legal system is in place or was developed. If you're giving your products a unique signature (whether it's a logo or not) and somebody else is forging that signature then it's fraud. Some might say it needs to be on a contract to count, I disagree with those some. I've yet to meet an IP-skeptic that thinks forging signatures is something people should be free to do.
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Riddler

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Re: Issues about a free market.
« Reply #7 on: February 27, 2011, 09:38:42 AM »

you'd simply hire a security chief like nha10 to ''take care of'' the problem company execs
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cavalier973

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Re: Issues about a free market.
« Reply #8 on: February 27, 2011, 03:32:11 PM »

Thanks for the responses. Yeh, I was thinking another company using your logo might fall under some sort of I.P. law or something. But then I.P. laws are another minefield. Fraud sounds about right, but I'm just wondering how you'd make the offending company accountable?

I should have been more clear about robber barons. Basically around the 1900s in America when a few people became rich and powerful and apparently used their money and power to squash competition. I've only done very light reading on it, but as near as I can understand, was that about when government started regulating the marketplace, and the reason for it?

Fraud is prosecuted more by the customer than by a competitor.  If I purchase a can of "Coke" that turns out to be not Coke (the softdrink), then I take action against the person who sold it to me under false pretenses (spread the word to my friends/family, etc.)  Vendors will have incentives to make sure that the products they sell are of acceptable quality.

The "robber barons" of America "quashed competition" through the use of government, not through the free market.  Some of the so-called robber barons actually got started by flouting government-granted monopolies.  Check out the story of Vanderbilt.  Standard Oil beat its competition by being exponentially better at cutting costs and figuring out new products that could be made from the refineries' waste.  As an example of cost-cutting: back when they were shipping oil in actual barrels, JD Rockefeller noticed that they used a lot of glue to tighten the tops to the barrels.  He suggested using a little less glue each day until the top fell off, then add back a little more glue, and use that amount.  Standard Oil could sell its products at a profit in amounts that were less than its competitors' cost basis. People made a good living starting refineries with the express intention of selling out to Standard Oil.
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Bill Brasky

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Re: Issues about a free market.
« Reply #9 on: February 27, 2011, 11:02:12 PM »

Thanks for the responses. Yeh, I was thinking another company using your logo might fall under some sort of I.P. law or something. But then I.P. laws are another minefield. Fraud sounds about right, but I'm just wondering how you'd make the offending company accountable?

I should have been more clear about robber barons. Basically around the 1900s in America when a few people became rich and powerful and apparently used their money and power to squash competition. I've only done very light reading on it, but as near as I can understand, was that about when government started regulating the marketplace, and the reason for it?

Fraud is prosecuted more by the customer than by a competitor.  If I purchase a can of "Coke" that turns out to be not Coke (the softdrink), then I take action against the person who sold it to me under false pretenses (spread the word to my friends/family, etc.)  Vendors will have incentives to make sure that the products they sell are of acceptable quality.



How does one go about prosecuting a retailer for what is believed to be a can of counterfeit Coke?

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Turd Ferguson

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Re: Issues about a free market.
« Reply #10 on: February 28, 2011, 12:08:38 AM »

Chuck a rock through his storefront window?

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Ben

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Re: Issues about a free market.
« Reply #11 on: February 28, 2011, 10:07:30 PM »



How does one go about prosecuting a retailer for what is believed to be a can of counterfeit Coke?



That's basically what I'm hung up on. How does this get solved without government interference in the marketplace?
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Zhwazi

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Re: Issues about a free market.
« Reply #12 on: March 01, 2011, 01:24:38 AM »

How does one go about prosecuting a retailer for what is believed to be a can of counterfeit Coke?

That's basically what I'm hung up on. How does this get solved without government interference in the marketplace?

There are already a few proposed ways to solve the problem of non-government justice, ranging from insurance companies basically replacing the state at everything it does to private third-party arbitration to ostracism, some combining these.

Personally in such a case I would follow the chain of supply until I found the counterfeiter and tell everyone in the supply chain of counterfeit goods and everyone in the supply chain of the legitimate version, and let them handle it however they see fit. It would probably end up with the counterfeit producer getting sued. Oh, and I'd stop buying the counterfeits.
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Alex Libman

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Re: Issues about a free market.
« Reply #13 on: March 01, 2011, 01:31:31 AM »

My recent post from a similar thread on another forum:

Quote
A free society cannot exist in the stone age; it can only exist to some degree once a sufficient level of economic literacy is reached by a sufficient fraction of the population.

In the 21st century we have (or will soon have) advents like: consumer interest publications, customer feedback Web-sites / wikis / databases, instant searching and data aggregation, smart-phones that can read and cross-reference RFID / signature codes of any product, GPS-enabled databases of local businesses, augmented reality glasses to give you instant facts about what you're looking at, digital payment trails, package tracking, camera and satellite networks tracking shipping containers and vehicles, etc, etc, etc...

Nothing comes out of nowhere and nothing disappears out of sight anymore, everything can be tracked and analyzed (soon with increasingly greater aid of artificial intelligence), and the consumer can utilize independent objective information to aid in all purchasing decisions.  "When in doubt, don't buy" - so the burden falls on the manufacturers and sellers to present a clear and objectively verifiable quality assurance trail.

This decentralized system has considerable advantages over blind faith in an inevitably-corrupt government monopoly providing one-size-fits-all solutions down the barrel of a gun.  Given enough eyeballs, all bugs (or fraudulent sellers) are shallow!
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mikehz

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Re: Issues about a free market.
« Reply #14 on: March 01, 2011, 10:15:34 AM »

Often objections to the market ignore that the same problems, or worse, can arise with equal ease under statism. What if a politician decides to do evil and nasty things to someone? What if a politician robber decides to rise up and make everyone's life hell?

In any case, other than purely for recreational purposes, I've never understood why capitalists out to make money would go to the time and cost of ruining someone else's life. I suppose it could happen. After all, no one said a free market would be perfect, only that it results in generally better economic conditions than does a state controlled market.
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