"For the most part, we have to leave it to institutions and businesses to decide how to hire employees and price services, confident that successful enterprises are usually better able to make this call than legislatures or judges."
What's included in a free market?
Free Markets v's Controlled Markets
"To prohibit a great people, however, from making all that they can of every part of their own produce, or from employing their stock and industry in the way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind."
-- Adam Smith
Business people want free markets when entering a market, but want barriers raised after they are up and running.
The world has far more corpses to bury from from the envy of socialism than it has from the greed of capitalism.
Free marketers are not imposing their will, it’s a systematic change for people to impose their own will.
Government typically operates outside the market mechanism and is usually a monopoly supplier of its 'goods'. This has implications for GDP.
- Is there such a thing as market power, all markets are voluntary
- Exploitation is not case as the company is not forcing them to work, in fact it is increasing the workers choices.
- Feudal world view – where the worker has no choices
- Firms are only taking advantage of lack of choices by increasing them
- Market power is the financial equivalent of sexual “pulling power”, if someone more sexy comes along they will get more attention.
- For sexual matters coercion is abhorrent, but it is o.k in commercial matters
In all proper relationships, there is no sacrifice of anyone to anyone. An architect needs clients, but he does not subordinate his work to his wishes. They need him, but they do not order a house just to give him commission. Men exchange their work by free, mutual consent to mutual advantage when their personal interests agree and they both desire the exchange. If they do not desire it, they are not forced to deal with each other. They seek further. This is the only possible relationship between equals. Anything else is the relationship between slave and master, or victim and executioner.
-- Ayn Rand
Markets v's government provision.
The democracy of the markets
"The distinguished economist Lord (Lionel) Robbins once referred to the market as a “perpetual referendum” in which everyone votes, pound by pound, between countless goods and services produced by unnumbered suppliers around the world, competing in quality and price to satisfy customers. This quest to capture votes and obtain profit leads to improved products, cost-cutting innovation and enhanced productivity and wealth."
Markets and religion
Pay to pray
, or free-market capitalism meets the synagogue.
On Saturday, Jews around the world celebrated Yom Kippur, the holiest day of the year. There was a time when synagogues opened their doors to non-members on the High Holy Days. Donations were encouraged. Now it's become commonplace to "pay to pray." "I was once of the opinion it should be free for everybody, before I realized that if it’s free for everybody, then some people are underwriting everyone else," Amichai Lau-Lavie, the spiritual leader of Lab/Shul, tells the New York Times, describing what economists call the "free rider" problem. Spoken like a true capitalist.
"penalties, which entirely ruin the smuggler; a person who, though no doubt highly blameable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been, in every respect, an excellent citizen, had not the laws of his country made that a crime which nature never meant to be so."
-- Adam Smith
Note there is also something called the grey market
- Government is reckless with your money.
- Government has rejected the free markets for decades.
- For every cent the government spends they have to take it from somewhere productive.
- Things should be financed by private sources, not taxpayers. If something is worthwile private money will find a way there.
- Tax policy affects the flow of capital.
- Government subscribe to the theory of regulation, regulation of people and companies, but they don't want themselves to be regulated in the same way.
Free market in Energy
"You could be forgiven for thinking that the energy providers are part of some mythical 'free market' intent on fleecing the public and leaving old ladies to die in the street this winter. The sad truth is no such market exists - a free market is by definition one whose only oversight an regulatory body is the customer base able to vote with its feet and wallet."
"The big energy company's only seem to work as a cartel because the majority of the public does not change supplier, Rather than demanding the abolition of a free market, ask yourself if you have compare energy prices in the past 6 months. If not, its you who are more likely the cause of profiteering."