Lets play devils advocate on this form. In what way can the free market be bad? (This suggestion was at the urging of my teacher.)
Currently overpaid academics cannot earn vast salaries for services no one wants. That’d be “bad” in your teacher’s estimation, at least.
-Jon
Well, the system we have today is quite far from a free market, so those institutions which have grown large and powerful today would stand to lose the most by the institution of a free market. Credit would be much harder to obtain. Without socialized roads, the current prevailing model of enormous, distant production would become cost-prohibitive. Common and well-known brands would also likely decrease or disappear because of the greater distribution of production, so advertising and therefore the current model of television and many other currently “free” services would become far more local or disappear as well. Stability overall would be decreased. More jobs would be created, since entrepeneurs would be freer to start up their businesses, but more would be lost because no one would be bailed out at the expense of taxpayers. Lack of socialized law enforcement would likely lead to people being generally more cautious and well-armed, and the ancient institution of the duel might rear its head once more. If you had neither insurance nor money, you would be utterly dependent on generosity for your health care, since hospitals would not be compelled to help you.
Is not giving people a false sense of security a flaw?
A free market as upposed to what, bad is relative. You have to have an alternative system where the problem no longer exists. Problems can exist within a free market framework, but the market itself, probably doesn’t cause any “problems” in the sense that they require “solving” by a state. Voluntary communism can exist within said framework, as can various other forms of social organization that can deal with alledged problems.
Just curious. What exactly would happen right now if the government decided that it no longer wanted to intervene in the market? Obviously we would be in a world of hurt, but how long would this last? 5-10 years?
The Marxists claim that unequal distribution of resources is itself a ‘market failure’ - and obviously a bad.
What basis is there for this? Why is economic inequality a negitive?
From my own perspective, “inequality” in and of itself is not negative. Rather, what’s negative is poverty, stagnation, low time preferance and a shitty environment in general (the bulk of which is an effect of state intervention). So the typical lefty emphasis on “equality” itself in the economic sense seems misplaced to me.
I am pretty sure we disagree on just about everything, but that was a very funny comment and I highly recommend the young student use that as an example..
Well if Marxoids want to argue that they need to provide a criterion of success for the market that somehow entails an “equal” distribution of material goods, and then justify why it should be taken seriously. Ethical arguments will not suffice.
Thank you ML.
-Jon
There are two ways it can be ‘bad.’
- Each individual or set of individuals which make flawed or incorrect market decisions will fail.
Okay, now of course, this isn’t as ‘bad’ as it is as ‘good’ respect to the containment of flawed or incorrect market decisions. Basically, if Bob and Joe make a mistake, only Bob and Joe will fail. Not Jane and Dan. Today, each person in the market is either explicitly or implicitly tied to one and other by governmental safety nets and the fiat currency (and fractional reserve banking) systems. Which is why you see the talking heads on the idiot box claim that big corporations like Bear-Stearns and the Duopolopy of Fannie Mae and Freddie Mac are too big to fail as their debts in one way or another are our debts.
- All future wealth generated must be generated by existing wealth.
This one is a problem that I get thrown in my face because many folks cannot imagine that no one could go out on a limb and invest unless there was some measure of ‘credit’ or a fiat currency (or even a safety net) to shield or reduce the so-called impact of failure in the market. But what such folks fail to realize is that even in our broken marketplace wealth is still the foundation for which any other form of wealth is produced. Whether we’re talking about investment returns getting reinvested in other ventures, or the simple fact that something has to be made from something else (restaurants buying food products that were once raw plant crops and cattle/animal herds, which in turn they sell as finished meals).
So, really, the two possible ‘bad’ sides to a free market seem rather good, so I can’t say there’s any substance to any argument against it.
I would say the degrading effects of consumer culture and constant advertising.
But isn’t “consumer culture” a direct result of high time preference which, in turn, is caused by moral hazards created by government, such as high taxes, welfare schemes etc.?
Since value is subjective what is thought to be a good to someone might be bad to another. The debate of what is good and what is bad is completely removed from economics, which is a value free science concerned with human action.
Of course, when governments, or any other group of people with guns, prevent people from acting according to their values I find that to be immoral.
Indeed. The market only works with the individuals it has at its disposal. If they are systematically degraded by a government, it will lead to outcomes that reflect this. Socialists will look at you with eyes glazed over when you point this out, and some will deny it, as it discredits their understanding of capitalism qua cultural phenomenon.
-Jon
I wish we knew. We have never really seen the effects(positive/negative/normative) of a free market, since the government has always been involved in one capacity or another. Socialism has gotten its greedy paws into a good thing many a time, and has found a way to get them into our government.
Ouch. Major burn.