This is a blog to discuss philosophy, chess, politics,
C. S. Lewis, or whatever it is that I'm in the mood to discuss.
Friday, November 26, 2021
How free should a free market be?
How free does the market need to be? Does a regulated market cease to be a free market? If so, we lost our free market long ago.
Free markets can create monopolies. In fact, that is what players in the Game of Capitalism are aiming for.
Markets happen whenever people trade. Whenever people trade there are rules. Even drug cartels have rules. So, no, there have never been "free markets" if that means there are no rules or regulations.
Aren't there two senses of 'free' here? A market can be free in that producers are not told by government what and how much to bring to market, and what price to charge. And a market can be free in that there is little or no regulation as to how things are made or how employees are treated. In the West we have gone down the route of generally increasing regulation, so markets are less free in the second sense, but we have very largely left markets free in the first sense.
But government can affect what producers produce, how much to produce and what to charge by regulations and taxes. If you tax a product like cigarettes, the price goes up and so fewer will be produced. There are also products that are outright outlawed.
True. Victor asks rhetorically, Does a regulated market cease to be a free market? The answer is Yes, but only in the second sense. But then he says, Free markets can create monopolies, and here I think he is using 'free' in the first sense.
4 comments:
Markets happen whenever people trade. Whenever people trade there are rules. Even drug cartels have rules. So, no, there have never been "free markets" if that means there are no rules or regulations.
Aren't there two senses of 'free' here? A market can be free in that producers are not told by government what and how much to bring to market, and what price to charge. And a market can be free in that there is little or no regulation as to how things are made or how employees are treated. In the West we have gone down the route of generally increasing regulation, so markets are less free in the second sense, but we have very largely left markets free in the first sense.
It seems Victor's OP regarded your second sense.
But government can affect what producers produce, how much to produce and what to charge by regulations and taxes. If you tax a product like cigarettes, the price goes up and so fewer will be produced. There are also products that are outright outlawed.
True. Victor asks rhetorically, Does a regulated market cease to be a free market? The answer is Yes, but only in the second sense. But then he says, Free markets can create monopolies, and here I think he is using 'free' in the first sense.
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