Quote from: JorgeStolfi on July 23, 2014, 12:25:57 AM

Quote from: xyzzy099 on July 22, 2014, 11:46:35 PM

You may have discussed some of these principles with someone on this forum. It was not me.

I see it exactly the opposite way from you: The regulations you believe are necessary for a free market (ironic, if you think about it) are always and everywhere used to subvert market forces, and give preference to whichever entity has the most political control over the 'regulators'.

Yeah, sorry, it must have been in some other thread.

The "free" in capitalism's "free market" does not mean "free from regulations", but rather that "suppliers and customers can freely choose each other, and new suppliers and customers can freely enter the market if it seems advantageous to them". Thus, even a highly regulated market can be free as long the regulations do not prevent the entry of competitors. Theory says that such a free market will tend to achieve a fair price -- cost plus a small percentage of proft -- that makes it as profitable as any other market.

However, a strong government and proper regulation is necessary to keep a market free; because otherwise the leading suppliers will use their position to keep competition away, e.g. by dumping, controlling the supply of raw materials, false advertising, lobbying for exclusive laws, etc.. Without adequate antitrust and consumer protection laws, every market quickly becomes a monopoly or oligopoly, that converges to a price that will maximize the suppliers' net revenue -- usually much higher than the fair price of a free market.

I think the point I am failing to convey to you is that government and regulation pose EXACTLY the same threat that you ascribe solely to the market participants. Yes, it is theoretically possible for a regulated market to be a free market, but we need only to observe the real world we live in to see that that never really happens.

I believe that we live in a world that is not painted purely in swaths of black and white. The truth rarely lies in absolutes at either end of any spectrum.

I agree with you that bad actors in the economy would subvert free markets if allowed to do so, BUT so will their agents, the government, if empowered to do so.

Total freedom in the sense of absolutely no restraint, is certainly never desirable... My need for individual liberty does not demand that I have the freedom to coerce and murder, and economic entities should certainly be held to the same standard. THAT is the problem that needs to be solved: how do we prevent the players in the game from bending the rules in their own favor, thus cheating the other participants? The answer is surely not as simple as government regulation - that is just another cheating mechanism.

I don't claim to know what the ideal answer is. I imagine that there probably is no ideal answer, really. But I do know that empowering regulators is just arming the enemy.

We need to find the sweet spot... We need to cut through the vast web of regulations that have become the worst part of the problem, while still requiring the players to play fair.

It's not a trivial task, and the answer is not going to be something you can put on a bumper sticker or into a sound bite. And it won't be yet more government regulation either.