Forum Post: Free Market Economy
Posted 12 years ago on Nov. 9, 2011, 4:48 p.m. EST by CollegeStudent
(17)
This content is user submitted and not an official statement
I've been reading the Occupy Wall Street forums for a while and one trend I've seen is that there is a size-able group of people that are convinced the US needs to move to a free market economy. What I don't understand is how this would be any better than a well regulated economy?
Anyone that can maybe shed some light on the topic feel free to do so.
You know, there are countries that have something approaching a freemarket economy. They are third world countries. You show me a country with no enviromental regulations that has clean air and water. Show me a country with privatized education where everybody gets a shot at a good education. Or a country with no financial regulation that has a large middle class or a healthy economy. If you follow the logic of "liberatarians" then Somalia should be a paradise because it has almost no government.
You are absolutely right on. And you are right to place "libertarian" in quotes-- as this "free" market ideology has nothing to do with libertarianism or liberty.
The correct term is "market fundamentalist" http://en.wikipedia.org/wiki/Market_fundamentalism
The reason you don't understand why a so called free market economy wouldn't be better is probably because you are pretty bright guy(gal). Deregulation of one sort or another has caused the mess we're in today.
This.
No, This.
:o)
Wall Street is not the cause, it is a SYMPTOM!
JOIN THE REVOLUTION Read “Common Sense 3.1” at ( www.revolution2.osixs.org )
FIGHT THE CAUSE - NOT THE SYMPTOM We don’t have to live like this. "Spread the News"
The main reason is our economy is dependent on scarcity. So artificial forms of scarcity must be perpetuated or created to maintain profitability as new technologies create abundance.
http://www.techdirt.com/articles/20070503/012939.shtml
http://www.techdirt.com/articles/20100303/1529108398.shtml
Regulation is simply a bandaid if entire industries and that industry's job sector can be mechanized/ automated.
The entire economy must be readjusted to factor in productivity abundance and finite resources.
It has been my experience that most conservative republicans believe we have a free market economy in the U.S. Of course the last round of bailouts proved we don't. you could say we have half of a free market. this is just as ridiculous as a woman being half pregnant. I have heard our system referred to as "Capitalism for the poor and socialism for the rich.
I think the term is a mixed economy
The ultimate goal in a "free market" is the elimination of competition.
College Student. A book you might want to consider reading is Cornered: The New Monopoly Capitalism and the Economics of Destruction by Barry C. Lynn.
Ultimately the term "free market economy" is meaningless because it means different things to different people. Some free marketeers such as Milton Friedman, decry all manner of regulation, others fell some regulation is necessary. It's usually the degree of regulation that separates people but they can all be included under the umbrella of a free market economy.
If you are interested in my opinion, I feel that the economy is in such dire straits because of a lack of regulation. This encouraged the formation of monopolies and huge trading companies such as Walmart. Monopolies stifle competition, control prices, depress wages and abrogate jobs.
Ideally regulators work hand in hand with the free market. The whole point of the free market is that we all have a "rational self interest" approach. The quirk is defining "rational". I'm a capitalist at heart - i like investing in projects that bring prosperity. The illegal markets work the same way too, though. The regulators act as the voice of the rational, or at least they should. Our debt-biased tax system creates an incentive to lead people to work more to pay more for their debts. Our style of free market (at the moment) is very permissive of this approach that I find to be unconscionable conduct.
"Ideally regulators work hand in hand with the free market." -I guess this depends largely on the definition of free market that you go with. from Wikipedia: A free-market economy is one within which all markets are unregulated by any parties other than market participants. In its purest form, the government plays a neutral role in its administration and legislation of economic activity, neither limiting it (by regulating industries or protecting them from internal/external market pressures) nor actively promoting it (by owning economic interests or offering subsidies to businesses or R&D).
Sure, it's academic. In practice though, a hybrid approach would be my preference.
I think what is needed is a reality check. The 1% doesn't understand what it is like for the rest of us. If politicians made minimum wage. If banks were non profit. If CEO's lived paycheck to paycheck. So deregulation is not the best answer. Super regulation is also not the best answer.
Well said - there is a massive disconnect between the people and the government.
there is no such thing as a truly free market or economy. what we should strive for is one that is fair and free and intelligently and lightly regulated.
many of the problems we have today are because of market interventions - mandates, policies or laws - often well intended but with consequences that have not been helpful.
ie. ww2 wage freeze era benefit tax exemptions led to health insurance married to employment which led to people behaving differently under health insurance which led to prices that rise faster than inflation.
ie. student loans being 100% federally guaranteed by the government and unable to be discharged even in bankruptcy led to a system of money in any amount asked being available and lenders that will always provide it as they care not about student ability to pay it back because of the guarantee, leading to ever increasing costs of education beyond inflation.
So you're looking for a regulatory reform, which I am completely in agreement with. My main problem is people that don't see compromise as being a good thing in this area, as in those that feel a pure free market economy, devoid of any regulation, would be a good thing.
i'm a practical libertarian. really i think very few people call for zero regulation - when you hear people calling for free markets they are more or less just calling for "more free" markets, or "less intervened" with markets, as in the interventions i mentioned above.
vaff
They are idiots. If the government backed off completly from regulation, the markets would colapse in a matter of weeks of months. Most crops are subsadized to keep farmers from flooding the markets and bankrupting them selves (this was a cause of Great Depression). Second, if the governmetn backed off, all competition would be destroyed and monopolies would rule (then I would like to see what those free market people have to say about prices)
Crop subsidies are a huge part of the yearly surplus of crops that the government buys to keep the farmers from bankrupting due to lower than forecasted crop pricing. That's not even a debated point, its an accepted fact. I've honestly never heard of farmers being a significant cause of the great depression, I had always read the mentionable cause being the investment of money in the stock market, and the re-investment of the 'profits' back into the market. Can I get some Source material for that? The government doesn't need to back off from the market so much as it just needs to apply equal regulation for all companies, not just a few that can find purpose built loopholes.
Most farms rely on loans to pay for the seasons crop supplies. Befor the Great depression, farmers sold crops at market prices and were able to make back the loan money and a little extra. Durring WWI, that worked even dispite the increase in farm capacity becuase of the war. After the war however, demand and prices dropped. Farmers took out bigger loans to grow more crops so they could make a profit but when the drought hit, their crops failed along with their loans. Today still, most farmers use loans to pay for the season and pay them back after harvest.
http://www.thegreatdepressioncauses.com/dust-bowl.html
Thank you very much for providing me with a better understanding.
No problem. And na man, the great depression was a hell of a lot bigger than just re-investment. That site is actually a pretty good one to read over.
And I'm all for crop programs where they buy the crops, becuase they use them for school lunch programs. I am not for things like corn subsadies so that people can make money off of ethanol or subsadies on things like soy that need government help to make them affordable.
Oh I fully agree with you there, and to listen to the farmers I know, so do they. Ethanol and the cost of nuclear power are about the two most criminal fallacies Americans have been tucking themselves in with.
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We are heavily regulated and its the regulations that got the economy in the position in the first place.
But it was also largely due to regulation not being enforced and corruption of regulatory bodies. I'm not arguing about how much regulation we have now, I want to know what makes a free market system better.
regulation is always subject to regulatory capture. big corporations will help write the regulation - insuring only they can compete in that environment and startups can't or have a much harder time. or maybe they will get regulators to to very lax about enforcing rules as was done in regards to lending standards and leverage, part of how we got to the current crisis.
What you're talking about is corruption, and it sounds to me like you're saying that since it is, according to you, an inherent element of regulation that we should have as little as possible.
I'm not entirely convinced that corruption can't be removed through having a more transparent government, and through reform. I think our goal should be to limit corruption, and not simply expect it in our government.
Agreed. We did pretty well through the postwar years up until the 80s-90s.
no, i think we should have light regulation because well intended but bad ideas often have unwanted and unforseen consequences that can many times be worse than any problems they are trying to fix.
i do think we should keep government power light as well - if the government wasn't able to make special favors then nobody would be lobbying to buy them.
http://a3.sphotos.ak.fbcdn.net/hphotos-ak-ash4/319132_10100280130273789_30800332_47048366_1117804471_n.jpg
You gotta admit that image is ridiculous.
Antitrust laws are a type of regulation, for starters. Further, people "getting suspicious" and wanting regulation leads to regulations targeting the abuses of megacorp. Anything else is corruption. We need vigilance and campaign/lobbying finance reform, not deregulation.
is that what you told yourself when big pharma and insurers were writing parts of obamacare?
Yes (corruption), besides that what we needed was single-payer not a market handjob a la Bob Dole and other neoliberal goons.
markets work well if allowed to operate as one. health care today is simply broken.
Can you point out a nation with 100% market-based healthcare, where a significant percentage of the people have healthcare coverage of some sort, and where the overall health is better than ours (our health/outcomes being the lowest among advanced market democracies)?
i did open the report, and i just did it again, and i found nothing about cancer survival rates. i don't find similar measures either.
there is no system where there is equal care. do you think the prime minister of france has the same level of care as the bum in france? and i'm not advocating for a system of "wealthy" and "other" but for one that is people that can afford to pay in a market and poor people, just as we do with food. food is an even greater necessity and it operates fine for profit - although we do stupid things there too (government agg subsidies for example.)
medicare gets to do things that private sector does not. for one, the private sector hasn't been able to jump on the eletronification of records and data nearly as much as every other system has done since the 80s - because government mandates that everything be kept on paper. youw own link mentions the slow adoption rate of health care IT - this has less to do with them not wanting to adopt IT and more to do with them not wanting the nightmare of maintaining multiple systems.
medicare also prices things not on the market but from what some guys in a room think or push down to providers - and you can find many examples of providers pushing back and saying the costs are not enough to do the work at prices in the current system.
the paper you referenced seem to be light on actual quality metrics, ie. something like cancer survival rates.
http://img337.imageshack.us/img337/2794/ncancer121lv3.gif
Actually, the full report is linked from that page, and is chock full of data. You cherry-picked something in response. That report btw has been cited extensively: https://www.google.com/search?q=K.+Davis%2C+C.+Schoen%2C+S.+C.+Schoenbaum%2C+M.+M.+Doty%2C+A.+L.+Holmgren%2C+J.+L.+Kriss%2C+and+K.+K.+Shea%2C+Mirror%2C+Mirror+on+the+Wall%3A+An+International+Update+on+the+Comparative+Performance+of+American+Health+Care%2C+The+Commonwealth+Fund%2C+May+2007
no nation does, and i'm not saying we should have 100%. we should have a whole lot more though and not single payer.
getting a physical isn't a catastrophic event like crashing your car - it's a normal event like changing your oil. when you last got a physical, did you check out how much it would cost - or did you not care because it was a $20 copay? do you think anyone cared? do you even know how much the full cost was? if nobody knew the full cost, and nobody cared, would you expect the price to do anything other than rise faster than the cost of inflation? with a market, you have the correct price set by the market. with single payer, you have a government that takes some big guess or pseudo-negotiation. what happens when you get the price wrong? too high = overpay, too low = shortage or reduction in quality.
we could do well with a market system that provides a safety net for those that fall out - like food and food stamps. it would be stupid to give everyone food stamps. the system should be set up 90% market, 10% to treat the poor. not 100% to treat everyone like they are poor.
i don't know how you can say are outcomes are low, our outcomes are rather high, which is why people come from all over the world to get care here. our care is good, the problem is with price. the price discovery mechanism is broken, the price discovery mechanism can be restored.
A two-tiered system means second-class citizens getting second-class care. The private system will cater to the wealthy and will pay more for treatment than the state system. It is feudalistic. I think a lot of things should be for-profit, healthcare is not one.
It is a common necessity, and, further, if you look at Medicare, cost for positive outcomes is lower, and efficiency is higher, than in any private system.
Our outcomes look exactly like a developing country, and our costs are 2.5x higher than other developed nations.
http://www.commonwealthfund.org/Publications/Fund-Reports/2007/May/Mirror--Mirror-on-the-Wall--An-International-Update-on-the-Comparative-Performance-of-American-Healt.aspx
What do you mean by 'light' then? Since light is highly subjective.
things that correct information asymmetries, or keep some metrics in line with historic norms, not things that deter competition or cause changes in how markets operate.