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"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."

   --  Richard Thomson Ford

What's included in a free market?

Mixed vs Free markets

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
Controlled vs Free markets

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.

Critics of markets often complain that capitalism encourages and rewards self interest.
In fact, people are self interested under any political system. Markets channel their self interest in socially beneficial directions. In a free market, people achieve their own purposes by finding out what other people want and trying to offer it.

Market power

  • 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.

Black market

"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

Statutes against victimless activities of all kinds have created lucrative black markets which provide enormous profits to those persons who are willing to break these “laws".
Criminalizing such activity will inevitably undermine whatever respect for law a person engaged in such conduct may once have had. In such a setting, it is unrealistic to expect most black marketeers, whose livelihood is earned by providing goods and services that are deemed to be illegal, to observe the fine line between violating such statutes and violating the genuine rights of others—particularly when their black-market activities are denied the protection of recognized legal institutions and they must routinely resort to self help.
Victimless crime laws not only breed violations of victim’s rights, the huge premiums that result from making certain highly desired transactions illicit create powerful financial incentives for criminals to organize into groups which in effect purchase the “right” or privilege to engage in criminal conduct by corrupting law enforcement agents at all levels.

Note there is also something called the grey market


From the following link
Capitalism is too vague a concept. Some suggest abandoning the term altogether, because it is so fraught with conflicting meanings and ideological overtones.

Capitalism should be split into 
Free market capitalism (pure)
Crony capitalism (corrupted)
Wealth has causes, but poverty does not; poverty is what results if wealth production does not take place , whereas wealth is not what results if poverty production does not take place.

Critics of markets often complain that capitalism encourages and rewards self interest.
In fact, people are self interested under any political system. markets channel their self interest in socially beneficial directions. In a free market, people achieve their own purposes by finding out what other people want and trying to offer it.


  • 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."