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For & Against the Free market
For & Against the Free market
What does the free market mean? Which are the benefits of the Free Market? Are there any disadvantages of liberalisation? Let's discuss these questions and try to reach a conclusion.
What is the Free Market?
Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a newsdealer for fifty cents, the newsdealer and I exchange two commodities: I give up fifty cents, and the newsdealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager (an agent) with the authority to hire.
http://www.econlib.org/library/Enc/FreeMarket.html
Pro:
we can exchange things freely
we gain satisfaction
the interaction between the supply and demand is made faster
we earn time and money
Cons:
we may have speculated a situations wrongly
we may be used and tricked
some of us don't get to the free market and don't have access to different kind of supplies, or can't reach the demands of some people
it encourages waste
LET THERE BE DEBATE !!!
1 year 5 weeks ago
some of us don't get to the free market and don't have access to different kind of supplies, or can't reach the demands of some people
This touches on the big problem with the free market in practive compared to theory. The free market in theory needs perfect knowledge so that consumers switch between producers/providers so that the price moves towards equilibrium and the companies cant rip people off. In practice there can never be perfect knowledge and so consumers tend to stick with what they know even if there are cheaper alternatives.
However I am not sure about the way you have put it as the situation should be different with supplying goods as in a free market not having access to certain kinds of goods should not be a problem, is not the whole point that if there is demand for something someone will supply it?
1 year 5 weeks ago
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I believe that some needs are not satisfied in time or at all because of the fact that the exchange of information between the demander and the supplier is made to slowly, a problem which needs a different solution from the one with not reaching the right seller. it depends on the idea of you discovers a need: the demander or the supplier. If the answer is the demander the free market doesn't facilitate a way of interacting and exchanging ideas between this too, if the answer is the supplier than the free market is perfect for it as it as the freedom of movement and "manipulating" the buyer into thinking it needs its product.
I'm not sure if I made myself clear, but it's not very clear for me eighter, so sorry :D
1 year 5 weeks ago
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I have to admit I dont remember how advertising and marketing fit into free market theory. I think marketing and and 'manipulating' the buyer should be considered seperate from the free market because it is really a market failure, as mentioned it is the failure that there is not perfect information (not having the correct information about the product). It may also be a failure due to the buyer not being rational as they are buying something they dont want or need.
The real problem is that the theory is much nicer than the reality... a bit like communism, nice in theory but in practice we have seen it quickly gets nasty!
1 year 5 weeks ago
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I wonder whether the original intent was not to have a debate about free market theory but rather about consumerism. Many of the original negatives that are mentioned are much more of a problem of consumerism than the free market.
If we take the three definitions of consumerism (http://www.thefreedictionary.com/consumerism)
1. The movement seeking to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards.
2. The theory that a progressively greater consumption of goods is economically beneficial.
3. Attachment to materialistic values or possessions: deplored the rampant consumerism of contemporary society.
then the 2nd and 3rd are really what I am thinking of! The Free market is a big part of consumerism and may be necessary for it but the free market could live without consumerism and may well remain the best way of organising an economy in which the consumption of goods was not the main motive for life.
1 year 5 weeks ago
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Yes, you are right, no consumer will have perfect knowledge. But here you are using The Nirvana Fallacy. It is a fallacy in which the person in question sets up a utopian world then says that the free market doesn't live up to that. The problem is that there is nothing better than the free market. Consumers who are using the cheapest and best products tell their friends. The producers of said products advertise in order to gain more business. It may not be perfect knowledge, but it's the best we've got.
39 weeks 2 days ago
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Despite having argued that perfect knowledge does not exist we are certainly getting a lot closer to perfect knowledge than we have had in the past. It is possible that the internet may well bring us as close to perfect knowledge as we can get with direct comparisons between products, shops etc with reviews and ratings for each one.
However I dont see how advertisments contribute to perfect knowledge as they are biased and may provide misinformation; they certainly dont want you to know if a rival has a better product!
39 weeks 2 days ago
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It's true that businesses won't advertise other businesses' products, even if they are superior, but those other businesses certainly will! It is in everyone's interest if the best businesses advertise far and wide, so that is what they do. Again, we cannot have perfect knowledge, but market forces contribute to giving us better knowledge.
38 weeks 5 days ago
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Before I start to discuss your initial post in any depth, I would like to ask you a question Panait. I'm not trying to catch you out, and I would ask you not to use Wikipedia or Google when deciding on your response. Let's imagine that you have been asked to put money into two investment products. Both products will exist for a set period of time, and both will pay you a small amount of money each month during that time period. The first product will run for ten years. The second product will run for only five years, but will pay out much more, in total, than the first. Which product would you choose, and why?
1 year 5 weeks ago
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I would choose the second product because it would gain more from it than from the first product and because it would give me more money to invest into other products, further more, I actually have nothing to lose from this trade and I even win something.
why? Which was the right answer or what was it that you wanted to prove?
Anyhow, interesting question.
1 year 4 weeks ago
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I would choose the second product because i would gain more from it than from the first product and because it would give me more money to invest into other products, further more, I actually have nothing to lose from this trade and I even win something.
why? Which was the right answer or what was it that you wanted to prove?
Anyhow, interesting question.
1 year 4 weeks ago
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I believe the free market is a concept that is deserved by the people. It is our right to be able to buy and sell freely without the influence of an external force. However, like all policies, there must be moderation. Just like democracy, the freedom of speech and such, we must use this right to a free market correctly. For instance, refraining from buying/selling banned goods.
The invisible hand theory is a good mechanism to ensure everyone reaps what they sow, and thus should not be disrupted. Imagine the people of the past. They have been using the barter and free market systems, and got along just fine. Communism, or at least, a controlled economy will not result in the maximum amount of utils (objective units of consumer satisfaction) and also hinder the economy.
Free markets bring out the best in suppliers and entrepreneurs alike, and we need this competitive edge to achieve maximum economic growth. Again, everything in moderation and as a majority or the world's population in still sane and can function logically, free markets are the best option to provide the best economic status. After all, we can't have the best of both worlds, but we can surely take the one with more benefits.
1 year 1 week ago
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It is our right to be able to buy and sell freely without the influence of an external force. However, like all policies, there must be moderation. Just like democracy, the freedom of speech and such, we must use this right to a free market correctly. For instance, refraining from buying/selling banned goods.
If it is 'our right' to buy ans sell freely without external influence then who is to apply this moderation? If people see a profit to be made from 'banned goods' (which will of course not be banned or it is hardly free!) then surely it is part and parcel of a free market to sell them?
39 weeks 1 day ago
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The limits of the free market is rights. My rights to my person, property, and free use of both must not be infringed upon. This applies to everyone. Determining that someone cannot buy or sell certain goods is telling them waht to do with their property, violating their rights, and undermining liberty.
38 weeks 5 days ago
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so you are arguing for a free market in drugs, prostitution, heck what about nuclear bombs? basically anything that can be produced?
Since you have already set limits by saying everyone has a right to their own person (so no slavery then which was of course perfectly in the free market only a couple of centuries ago) then why is it such a big step to impose other limits such as 'nothing that can kill', or 'nothing that can cause harm to someone's person or property'?
38 weeks 4 days ago
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In Defense of Natural Rights:
I'm glad you understood my position so well. I fail to see any compelling reason to ban drugs, prostitution (I love the argument that it will ruin your life, so if we catch you doing it, we'll throw you in jail and ruin your life. It makes me laugh every time), etc.
Nuclear Bombs, on the other hand, are a bit harder to defend, being highly destructive if detonated. It all comes down to a question of rights. We de facto assume (and rightly so) that unless a good reason can be brought up otherwise, we have a right to engage in any given activity, or own any object.
Allow me to clarify that the threat of violence is also unacceptable - you pointing my gun at me gives me just as much right to defend myslef as you actually shooting. For this reason, I would consider it appropriate for members of the surrounding community to destroy or disable a nuclear bomb becuase, in effect, it is always "pointed" at everyone around it.
Anything can kill. I could kill someone with a scarf by strangling them, so it would be absurd (impossible, even) to prohibit all potentially lethal objects. More to the point, simply owning an AK-47 does not violate my property, or pose a direct threat to my property. It could be used in such a way that it violates or threatens to violate my property, and at that point I can lawfully violently intervene to protect myself. In the absense of the initiation or threat of the initiation of force, it would be a violation of rights to confiscate his peacefuly owned property.
11 weeks 4 days ago
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Free market in what economic system? And what are the alternatives to free market? Let's enumerate the possible options:- Free market slavery- Centrally planed slavery (as in Sparta)
I think it is safe to assume that there is no one here would support any slavery of feudalism, whether free market or centrally planned (or combination of those), so let's continue with the more acceptable options:
1. Free market capitalism
- David Friedman capitalism, that is- stateless capitalism with free market for law
- Rothbardian capitalism- stateless capitalism with a basic "libertarian" law generally accepted by the private defence agencies and dispute resolution organisations
- capitalist minarchy
- minarchy + laws regulating externalities such as pollution
- Milton Freedman capitalism- minarchy + laws regulation externalities such as pollution and poverty
2. Mix of free market capitalism and central planning
- various types and degrees of social-democracy - that mix capitalist market with nationalization
3. Central planning
- plain nationalized economy with biroucracy control (called "socialism" by free market capitalists and bolsheviks, or "state capitalism" by democratic and libertarian socialists and communists)
4. Mix of cental and decentral planning
- nationalized economy with co-determination by the workers (Titoism, Chaves, and similar)
5. Classless economy
- democratic socialism
- libertarian socialism (both democratic and libertarian socialism are polycentric concerning economic organization, encompasing Prudhonian, Bakuninst, Kropotkinist and Fourierist methods of organization)
- communism
After enumerating different alternatives, now we just have to fact-check a little, to see that everyone knows what these systems are and how they differ, and then we can compare them and talk about which one should exist.
8 weeks 6 days ago
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The free market ultimately means people in society make choices according to what they are willing to pay for. There is no state regulation or intervention. If people are willing to pay for a product or service at a certain price, then more of that product and service will be provided because there is a demand for it. However if people are only willing to pay for that product/service but did not realise that the there manufacturing or the provision of the product/service caused, as an example, social and environmental damages, then they have ignorantly bought that product/service no knowing the implications it has. If people know the social/environmental damage and yet still trade their commodities for it, then they have chosen the product/service over prevention of the social/environmental damages being caused.
Consumers don't make smart choices, and they can be ignorant.This is where the state becomes needed to put in place interventions to prevent social and environmental damages because of unethical coporate decisions and manipulation of the consumer market..
2 weeks 3 days ago
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The free market on principle is a representation of freedom, innovation, enterprise and opportunity. Yet in reality the contemporary free market is riddled with manipulation, clever advertising and environmental and social problems as stated before. This is where the free market story quickly fades into the market failure story.
The only place where you see a truly free market is in the speeches of notorious figures. Strong regulation, consumer regulation etc is the way in order to curb the negative effects of the modern day marketplace.
1 week 2 days ago
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However if people are only willing to pay for that product/service but did not realise that the there manufacturing or the provision of the product/service caused, as an example, social and environmental damages, then they have ignorantly bought that product/service no knowing the implications it has. If people know the social/environmental damage and yet still trade their commodities for it, then they have chosen the product/service over prevention of the social/environmental damages being caused.
As was mentioned earlier in the thread if there are social and environmental damages being caused then if it is truly a free market then those damages should be included in the cost and demand would be less accordingly as the price would be higher. The fact is that our free market usually has a whole host of areas where the production uses the global commons and as a result the producer dumps the cost on someone else. So almost everything produced today takes advantage of this market failure.
The kind of things that should be included would be; the cleanup of any pollution, the cost of stopping CO2 emissions, the social cost of this pollution, the social cost of paying almost slave labour wages etc. If you take such an expansive view of the market then is not the government not simply a part of it? After all the kind of global (or national) commons that companies take advantage of are things like security, healthcare, and education which states provide. This is probably why most advanced economies have quite a lot of state involvement; because they take into account more of the real costs of production and thus clear up more of the resulting problems creating an overall better business environment.
1 week 2 days ago
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How does the free market encourage waste? The problem with waste is mostly the opposite, it is not included in the cost and there is no cost to dumping it. A waste free market would mean being charged for the non recyclible waste you create (for the environmental damage caused) while being paid for things that can be reused or recyled. The free maket should therefore discourage most waste and encourage that which can prevent the use of yet more resources (so preventing another cost).
The problem is what we are not yet really used to the idea that the commons should operate under market conditions so it seems outragious that we should be charged for dumping in landfil (beyond the labour cost of getting it there).