We are a conglomeration of laws that work for and against the idea of a "free market". Purists believe that without regulation the market will sort itself out. Certainly economic entities will sort themselves out but is it in a manner that is conducive to actually doing business that will positively impact the bulk of society and our nation as a whole? That will "raise" everyone up?
Or will greed rule? Will we have whole levels of society relegated to slave wages because a "free market" will seek out the lowest payment for services rendered.
Today we have a managed economy not a "free market" because without regulations the greedy would ride roughshod over all of us. Coercion would rule. They would manipulate things in their favor and create environments for sucking out every bit of profit available.
Our failure, over the past decade, to monitor the unregulated in our financial markets is a direct result of a belief in the myth of "free markets". Recently the natural checks and balances of a "free market" failed to materialize until a catastrophe of unimagined proportions descended upon the worlds intertwined economies.
All governments around the world had to intervene to prevent total collapse of the "free market".
Is there such a thing as a "free market"?
The closest you can get to a "free market" is what we have today and understand as a "managed market" or a "mixed economy". Not a socialized economy. For government doesn't run all aspects of the economy.
Most conservatives believe Adam Smith's strong support for the "Free Market" implied that Smith wanted no regulation. The reverse is true. Smith felt that, to have a functional Free Market, a great deal of regulation was required. Caps on interest rates and a complete separation from government are amongst his most oft-repeated necessities for his Market. But the myth of the Adam Smith "free market" that goes unregulated lives on.
Conservatives support unregulated markets based on a misunderstanding of Smith. Adam Smith was a staunch supporter of the regulation of corporations and felt that they should be excluded from political participation entirely. (Unfortunately our Supreme Court Justices just recently voted in favor of giving corporations free reign in our political process). Today we can look forward to political manipulation by corporations interested in controlling their market environments and increasing their profits. For a free reign in the political process means votes and corporations owe no allegiance to any nation. If you think this is a country devoted to "We the people" get over it.
There is a term in the study of economics called the Pareto efficiency which states that in an economic system the "inefficient implies that a certain change in allocation of goods (for example) may result in some individuals being made "better off" with no individual being made worse off, and therefore can be made more Pareto efficient through a Pareto improvement." WikipediaA Pareto improvement is compensation made to balance the imbalance when there are only some individuals being made "better off". (Ex. Infusion of government money into the economy to stimulate jobs.)
Today we see this with our high levels of executive compensation, homeless, the unemployed, our stagnating wages, and lack of jobs. "Free markets" require government intervention when they have "failed". Why?
"Because no national economy in existence fully manifests the ideal of a free market as theorized by economists, some critics of the concept consider it to be a fantasy - outside of the bounds of reality in a complex system with opposing interests and different distributions of wealth." Wikipedia
What do you think...is the term "free market" a fantasy?
According to Lenny Flank "We now live in a global corporate planet—World, Incorporated. “Nations” are merely wholly-owned subsidiaries."
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