What are the components of a Free Market? For example, no government subsidies, no mandated monopoly laws, no entry to market laws (or exist laws for that matter)
No government/no legal barriers to entry.
No coercion/theft/fraud/property damage/murder
A free market is a market without government intervention in the economy.
So a free market is the same as utopia? It is only reached if all that never happens?
How about no institutionalized coercion/theft/fraud/property damage/murder ?
I guess I made a flaw. [:(] I guess I mean that this stuff is not legit, and is prevented/stopped by people acting in self-defense (guns, pdas, etc.)
A market is a collection of actions/actors, so I suppose a free market would be a collection of free actions/actors, those which are voluntary.
-Rules of the game favors strong competition.(Easy entry, exit) But each industry has its own different competitive characteristics.
-Little monopoly power as possible. (Many companies).
-No government intervention whatsoever, except for laws to make markets competitive.
-Definitively, free markets are not in practice.
I like the Mises definition of a free market:
Obviously, anarchists would take issue with the fourth critereon but I think it is safe to say that there must exist some form of social apparatus that performs the same function whether it be government or otherwise in order for it to be a free market.
By institutionally, is Mises referring to governments or firms? Would institutionally interference include unions? Unions essentilly fight for wage rates. In its current form, their are far too many protections for unions.
These are great points, and perhaps umbrella other features of a free market. I took Mises point from Fried and associated (to the best of my ability, I am sure there is overlap) with each of the points everyone else on the list mentioned.
Few companies does not imply monopoly power, nor does even one company. And anti-trust laws (which I imagine are what you mean when you say “laws to make markets competitive”) are completely illegitimate, inefficient, and ineffective.
I would suggest to you the significant amount of Austrian writings on the issue of monopoly. Thomas DiLorenzo has done great work on it, and Murray Rothbard gave an excellent account of the topic in his writings as well. There is no such thing as a monopoly in the market unburdened by the government and anything the government does to make the market “more competitive” makes it less competitive in actual fact.
There’s also Dominick Armentano’s great work on monopolies and their non-existence in markets.
-Jon
I don’t think you could include union activity as “institutional interference” as long as unions had not special protection in law. Workers would be free to organise and collectively bargain just as employers would be free to discriminate against union involvement or collaborate with other firms.
This is exactly what I seriously disliked in my macro-materials. The professor was basically saying that on the free market there has to be a lot of competition between many companies in every sector of the market. This of course is not the characteristic of a free market. In case where a natural monopoly is the most efficient way to produce, it is hurtful for everyone when government pushes other companies into the sector. Since the companies would not get involved themselves the government would probably have to hamper other sectors. And this would not only make it more inefficient in the sector where the natural monopoly is required but also in the hampered ones.
PS! Sorry for my poor English, haven’t been using it for a while.
All interactions between actors are voluntary and when they are not the aggressor is made to pay retribution.
No, its that all the actions fall outside the market.
All exchange free of those conditions compose the free market. Anything else is crime.