[Vision2020] The Free Market

[Ted Moffett]

Paul et. al.

Here is an over simplistic and cynical take on your post, that does not
attempt to answer your post with sophisticated economic theory:

The "free market" means those with the most money get to buy the most
politicians to get the most legislation written so that those with the most
money can continue to make more money than those with less money who cannot
buy politicians."

Here is one possible retort to this rather obvious and well documented
development in the distribution of wealth in the USA over the past 25 years:

The "free market" means a system where someone with a good idea and hard
work can start out with very little and become a millionaire, and live the
"American Dream," without the government stopping them or taxing their hard
earned wealth away.

There is truth to both views of what the "free market" means, but as you
point out it is more than obvious our economic system is highly regulated.
Socialism is a reality in the USA, that even some economic conservatives
support, despite the fact they use the word "Socialism" as a dirty word.
What is Social Security and Medicare but vast tax supported government
mandated Socialist welfare programs?  Why can't I refuse to pay into Social
Security and give up my rights to the benefits later, choosing instead to
use my hard earned money, that goes into the Social Security fund, to make
my own wealth and pay for my own retirement?  Is this expressing the
operation of a "free market?"  Sounds like big government Socialism to me!
And indeed, many economic conservatives want to dismantle the New Deal.
They have influenced the Bush administration's attempts to partly privatize
Social Security.  People either pay for their own retirement, or get someone
or some institution to help them, but they don't think it's the government's
place to guarantee everyone a retirement safety net, either for basic needs
or medical care.

Some of the regulations on economic activity are to prevent the catastrophes
that can happen in a truly "free market," like the Great Depression
collapse.  Wall Street has controls in place to help prevent such a
disaster.  And of course some regulations are to ensure a fair playing field
for the operation of the "free market," like anti-trust law.

But it seems the wealthy are able to rewrite or gut the enforcement of some
of the laws regulating economic activity, allowing them to plunder, like
Enron using the deregulation of energy markets to flat out rob US citizens
of millions, or the Savings and Loan scams ran during the Reagan
administration after deregulating the banking industry

I tend to think about economic systems like ecosystems:  the more diversity
in the forms of economic activity, balanced over public and private sectors,
the more stable the system, and able to absorb change, just as a wide
diversity of lifeforms in an ecosystem creates an ecosystem that is more
stable and able to adapt to environmental challenges.  I therefore do not
favor either a mostly governmental run economic system, nor the other
extreme, with a so called total "free market," whatever that might mean.

Of course, some economists insist that the balance should be towards the
free market side of the equation for the most diverse and stable economic
system.  Government regulation in this view tends to limit the diversity of
businesses that exist.

At this point we need some mathematics in our economic theorizing to get
anywhere serious... Let's see, I took college Calculus 34 years ago.  What
is the Chain Rule?  Never mind!

I am not an economist, but I get to play one on Vision2020!

Ted Moffett


On 8/6/06, Paul Rumelhart <godshatter at yahoo.com> wrote:
>
> I wanted to raise this topic, because I've seen it bandied about here on
> the list.
>
> In my opinion, the "free market" (as I understand it) is a cold, mean
> place that cares nothing about ethics, employee rights, the environment,
> etc.  It's a consequence of this idea that "business" is somehow
> different in the history of human affairs.  You know - "it's just
> business".  It's ok to do anything you can within the law (or outside
> the law if you can get away with it) as long as it's in the name of
> "profit" or it helps the stockholders.  Think "robber barons" to get the
> general idea.
>
> So, how is the "free market" supposed to work?  I see it bandied about
> as this Great Thing, but I just don't see it.  What would happen if the
> government sat back and took out all legislation involving the
> regulation of monopolies, the imposition of environmental controls, the
> minimum wage, and all other government intervention in this area?  What
> would this mythical market look like?  Would the world really be a
> better place?  And for whom?
>
> Paul
>
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