What Is The Free Market?

[Capitalist Pig]

I saw this a couple days ago posted as the daily article on the Ludwig von Mises Institute. It's an excerpt from one of Murray Newton Rothbard's books, explaining quite eloquently the nature of the market and how it operates.

The Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a news dealer for fifty cents, the news dealer and I exchange two commodities: I give up fifty cents, and the news dealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager (an agent) with the authority to hire. Both parties undertake the exchange because each expects to gain from it. Also, each will repeat the exchange next time (or refuse to) because his expectation has proved correct (or incorrect) in the recent past. Trade, or exchange, is engaged in precisely because both parties benefit; if they did not expect to gain, they would not agree to the exchange.

http://www.mises.org/story/1973

[SteveA]

Austrian economics combines social and economic transactions together. Basically being free to improve your home could be easily equated to an ability to earn some dollar value, or helping/spending time with a friend has a certain economic tradeoff, so ultimately people have various desires and various resources with which to fill them.

A free market to me is more of an abstract concept that describes a lack of artificially created impediments or having a variety of choices with the costs accurately portrayed.

A couple weakness I see in some capitalistic arguments are:

1) Not considering indirect costs to others. For example, if part of the manufacturing process for some plastic toys involves dumping 55 gallon drums of toxic materials into a lake, then obviously we need a system that places the costs of these (or otherwise punishes) such actions so that even though the toys might appear to only cost 25 cents each, in reality they cost $2 dollars because of indirect costs to others life and property.

2) Trying to oversimply property rights. Though it's nice to try to stay within simple and easy to define definitions of property rights (like rectangles on a map) so people can easily agree on a definition, in reality the communist view that property is a result of labor seems closer to intuitive reality. (The problem is that communists want to use this to say that all labor is equal but obviously that's not true ... someone painting rocks in a desert has much less value to people than a doctor performing heart surgery etc.)

But anyway, not everyone will agree 100% on what property rights are though, something I've found seems to work well is that "people have a right to adequate compensation for harm done to their prior vested interests. Punitive damages can be justified depending upon the level of evasion or fraud involved.".

Basically, the subtle differences are:

1) Ownership doesn't automatically include a right to exclude others from using the resource. You should only be able to claim damages, when you're truly damaged or at least some obvious threat of damage exists not simply when you imagine a right to something you physically have no right to control or vested interest in. Basically this is a "Show me the facts" attitude in claiming damages to ones life, liberty or property. For example, there's no reason why homesteading should be illegal because ownership of the land by government is simply symbolic and not existant in reality and outside narrow patent and copyright claims, I.P. laws or broad patent claims are effectively theft of others liberty. Truly I believe you could remove these altogether and even function better by using simply rights to privacy/private property and contractual agreements, though at least returning to a limited scope, with Constitutionally enforced limits on time for patents and copyrights would be a big enough improvement, I'd have few complaints though it's still not ideal and this still allows for corruption in assigning these as well as many unnecessary costs for this system.

2) Consider how punitive damages operate. They are there to add additional punishments to discourage intentional criminal actions. They are unnecessary for cases where we can be rather certain damages were unintentional (I know determining motive can be difficult, but I'm talking about ideals). Lying and fraud are almost identical. The only difference between the two is over the potential damages done by each. For example, "You look great today" does little harm and so doesn't deserves punishment (unless she just wants to harrass you ).

Take this example: A child comes into a candy store and picks up a candy bar and walks out of the store. What punishment is justified for this:

1) If the child didn't know he was suppose to pay, then simply having the child return the candy bar and informing them that this isn't proper behavior is enough under this circumstance.

2) If the child stole the candy bar intentionally, then some additional punishment might be necessary but of course minor as the damages are small.

3) If the child worked with some other kids that had a scam going in which thousands of candy bars were stolen, then obviously if discovered, this needs greater discouragement. So the punitive damages are there simply to make sure "Crime doesn't pay." In other words, that "business model" needs to adequately compensate for not only immediate damages discovered but the likelihood of other such incidents that might have occured and weren't discovered. So the greater the attempt at eluding a just resolution, the higher the discouragement should be. This should be close to what the likely total damages were for other events that were undetected as well. If instead of candy bars, they were cars then the damages should be orders of magnitude higher.

This philosophy was actually prevalent in the anarcho-capitalist showcase of midieval Iceland a crime seemed to less an issue of harm, if someone came forward immediately and admitted guilt and instead crime was about fraud, evasion or otherwise attempting to avoid a just resolution.

[Osborn F Enready]

I want to say one thing here.

I do not think the world can have a free market unless all nations of the world "who partake" in that market, are held to certain obligations for partaking. Those obligations "as nations" in the market, must be the economic factor of civil and human rights.

Those are not monetary obligations, but in the end, they effect monetary policies.

I think it should be obvious to all "free market capitialists", that without a "level playing field" the market is simply a tool for abuse of human, and civil rights.

For example, we in the United States recognize civil rights (or are SUPPOSED TO anyway), and we also recognize human rights, and these things place us in a "niche", since for all labor transactions to take place in this country, these rights must be observed.

However, places like China, or India are not "economicly" hampered by these rights. Because of this, their workers can be, and are mistreated and the workers rights largely ignored.

The NeoCons embrace the free market ideal to the point that they think we should SHED our rights, if they interfere with business or profit margins. I do not share this affliction.

I think it is only obvious, that for the free market to work, all that particpate in the "free market" are actually "free individuals" with respects to having human rights, and civil rights to free speech, freedom of belief, rights to defense and rights to have representative government. (representative of the will of the populace, not a representative based system)

We are all born with these rights and freedoms, but religion and information control have propagandized the belief that "civillization" entails a pervasive belief that compromise is always better than confrontation.

How can a nation who believes workers should be paid what they earn, compete with a nation who exploits its workers into poverty and a life of never ending mental activity to preoccupy notions of skeptical thought? How can we be expected to compete with people, who can not free themselves from the power that they work to grow?

Do you guys understand what I am saying?

The free market is dependent on people exchanging things of their own free will, to a mutually beneficial ends. Right now, we are letting China and India ABUSE the market, by allowing them to put goods in the market that are built on exploitation of workers, and their rights. They used to suffer from this mentality, because in societies like that, information, R&D, and the MOTIVE for being creative was usually stunted due to lack of drive by the "laborers", and the short supply of "educated" people. In todays markets, with the changes in information technology, and the speed at which information can be stolen, copied or transferred, this no longer occurs as drasticly as it once did. Now these systems simply place operatives in their targets nations, steal the technology, or buy it from the black market, or outright buy and copy it.

In other words, these countries rely on our societal advancement, which we create through blood, sweat and tears of the individual, as they venture to make fortunes, but sometimes lose them. Education and motivation are our tools for societal development, employed through individual liberty and individual responsibility. Our gambles, fortunes to failures, are embarked on, thought up by, and executed by the individual, at the expense of the individual, until THAT individual decides to bring on partners.(sometimes the offset, sometimes not until business is established.)

Communist, Socialist societies tools are "backwards engineering" (trying to manufacture something from dis-assembling a finished product) and propaganda. Their education is specific, and only for those the government sees as gifted, and all pay for those "few" to be educated while the rest toil in servitude in the name of nationalism. Their only purpose in entering the market is for national profit, not individual profit. Their people sometimes see the results of open market business, but not always, since these sytems usually regulate internally the citizen reach into market access. Often times, these markets also stifle information, especially if it contradicts national propaganda.

So is it not natural to see that a free market, requires a free people? If not all people are free, is not some type of economic protectionism of one form or another required?

I say the best way to do this, is to not trade with "hostile" markets, HOWEVER, I do conceed that if ever there was a genuine way to generate income, other than taxation, this is the ticket to acheive market stability, as well as economic protection.


This forces the hard question of just how free can a market be, when all the people who make it up are not free?

I look forward to your thoughts on this, as I consider myself to be a hard core free market capitalist.

[SteveA]

Free markets include not being harmed involuntarily. But if people are willing to submit themselves to being slave labor, then what can you say? We should help people that desire it but can't simply say that someone working 10 hours a day under an oppressive government can't trade with some other select group of people. You'd hope that person would recognize the injustice of it, but if they don't what can you do?

A free market includes a system of justice, even if it's simply individuals standing up for their own rights. This places costs on those doing harm involuntarily and makes that impractical to continue.

If low cost labor in China is able to build something less expensive than people in the U.S., then here are some things to look at: 1) Labor there is tolerant of this, possibly because they have fewer alternatives and/or they've been raised to be tolerant of these abuses. 2) the U.S. may be inefficient and not competitive because of harm done to labor here. It could be that the U.S. places even greater relative burdens on workers here than in China. 3) More specifically, intellectual property rights serve to hamper technological gains here while not being much of a deterrant elsewhere. Technology tends to spread out over time, so greater gains are made in improving countries. There's not much you can do about that and it doesn't "hurt" the U.S. really except that we play by an unrealistic set of rules so handicap ourselves.

Truly though, it's largely up to people in other countries to decide what thier rights are and defend them. If you've been raised on a diet of servitude and 12 hour work days, then it's likely that's all you'll know. What makes me most frustrated isn't the economic gains made elsewhere but the lack of them here. (Other countries are still catching up, as is natural but why do we have to wait around in the meantime?)

I agree that it's not a bad idea to place some economic pressures on countries that treat their citizens poorly, even from a selfish viewpoint it makes sense that you wouldn't want to encourage that elsewhere as things tend to come around anyway but really I think we have to start in our own backyard. It's unlikely from the track record we're going to see government policies truly promoting individual rights, even in other countries.

To summarize a bit: If people elsewhere placed greater emphasis on individual rights, then those violating them would suffer, including economically, and the markets would reflect this in bias toward freer economies but if people are truly willing to live without expectations of this, then there's not much anyone can do about. Sadly, you can't force people to attain greater freedom. Discouraging trade with oppressive governments isn't a bad idea though but the costs go both ways and truly we should fix things at home first anyway so this is less of an issue and we have a better "product" to export anyway.

[Osborn F Enready]

Well Steve, you know I agree with you fundamentally here.

I guess my question is this.

Is the free market, supply and demand concept flawed in any other ways that you know of, other than the idea that countries who do not respect citizen rights could potentially manipulate the market?

I never really viewed this problem very seriously, until recently.

It seems as though nations like for instance India, even though they are a "republic", are being taken advantage of by OUR government, as well as most major nations governments in relation to the drug trade.

India is the worlds LARGEST producer of Opium for the LEGAL drug industry, and even they stay as competitive as they are due to OUR nations war on drugs, stamping out opium production in most other nations. There is a huge trade of ILLEGAL Opium from India also, so it is not as if they are the "only" wholesome ones in the market. Funny though, because Afghanistans MAIN production was Poppies, and our government took on a "no tolerance" stance on poppies in Afghanistan, bascily tying their hands using foreign policy, to force them OUT of the poppy trade.

Our drug companies are "extensions" practically of government in this country. We have regulated them into oblivion, we have created a special agency to regulate their products, many employers are required by some laws, local or federal, to provide drug benefit packages to employees, the government itself offers its own prescription drug plan, WHILE AT THE SAME TIME, regulations discourage small startup companies that would provide competititon, the market is essentially locked to "the major players" due to fear of "illegal drug trafficing", and both our and international governments discourage any inclination to do such.

Our manipulation of that market, within our borders, by our government and OUR corporations, are HELPING other nations suppress people. OUR legislators, OUR regulators, OUR manipulation.

This is a problem most people don't put a lens on unless provoked.

Our nation is SUPPOSED to be the one protecting and respecting rights, not helping other governments to undermine their peoples rights.

Can you imagine what would happen if the Socialists in this country vote in National Healthcare initiatives? Our government and the Healthcare/Drug Industry are already out of control due to government interference and national/foreign policies, it would become a global nightmare. The drug prices would be ASTRONOMICAL.

(quote from: http://www.sunshine-project.org/publ...ns/bk/bk1.html )

The USA has developed microbial pathogens intended for widespread dispersal to eradicate the drug producing plants coca, opium poppy and cannabis (marijuana). (1) In Central Asia, the US has begun conducting testing programs on fungi (Pleospora sp. and others) to kill opium poppy and marijuana. In the Andes and western Amazon, the US is planning the testing and widespread application of a fungus that attacks coca, Fusarium oxysporum, f. sp. Exythroxilum. These pathogens threaten human health and biodiversity in the areas of the Americas and Asia against which they are targeted. The US Congress recently approved 23 million new dollars for development of the pathogen agents and, in the Americas, is linking the fungal pathogen plan to aid programs. (2)

The US has falsely labelled these anti-crop programs as "biocontrol" research related to eliminate "weeds". "Weed", of course is a subjective term; one farmer's weed is another's staple crop. And while plants producing ilicit narcotics are certainly undesirable, they are not "weeds" by any logical policy or regulatory definition. "Biocontrol" is also a misnomer for these pathogens. Legitimate biocontrols protect cultivated crops, but the US pathogens kill them. By appropriating the language of a legitimate branch of science; biological controls; the US program has put the reputation of a growing and promising field of research at risk.

What they are talking about above in those paragraphs, is what many people "think" are weather experiments, or cloud seeding. They are blanket spraying this shit across the world.

Our nation has become an empire under our noses, and its evils of tyranny are just rising to the level of public criticism with the "Patriot Act".

Steve, I would love to hear your views on this.

How are we to tackle these monumental issues in the hopes of again having a free market? We need to remove all the current people in ALL parts of the three branches, and start over from the original constitution I think, while at the same time busting up all monopolies, and re-implementing new rules for incorporation and de-regulation.

The task seems like 12 Mount Everests upon one another, and we are but a small climbing party armed with only hiking boots.

[SteveA]

Agricultural subsidies keep Americans fat (though poor and diabetic) and foreign countries dependent on our food as well. We hand money to governments in poorer countries but not the people. Agriculture would be an industry that developing nations could compete in most easily too, so we're not only spending money on extra food we don't need but helping to keeping foreign farmers poor ... and then I guess we spray their crops too (I assume this wouldn't solely affect drug related crops). Hmmm ...

Well, Osborn buddy, sorry if I can't see the silver lining but I think we just look for a mountain passe, leave a few trail markers and hope some people find their way out. We've got a broken justice system and that's nothing new. Likely these things have been going on for thousands of years or more (no, not crop spraying though ). Truly I think it's a matter of getting people to think about these things and see what they can do as well. You can only do so much. Just teach them some survival skills and hope for the best. You're a good man, Osborn. I wish I knew how to do magic but then again even there was a way to snap a couple fingers and set everything right, it wouldn't teach anyone anything and likely things would quickly return to worse than normal.

I'd say if you're not married already, find a good lady, save a few bucks and explore the world. I'm certain there are some good places around :) Maybe we've done enough work, and it's time for some play as payment ... waddayathink?

[Osborn F Enready]

Steve said: Agricultural subsidies keep Americans fat (though poor and diabetic) and foreign countries dependent on our food as well. We hand money to governments in poorer countries but not the people. Agriculture would be an industry that developing nations could compete in most easily too, so we're not only spending money on extra food we don't need but helping to keeping foreign farmers poor ... and then I guess we spray their crops too (I assume this wouldn't solely affect drug related crops). Hmmm ...

I say:
Yes, very scary, and backwards logic being used by the "leaders" of the "free world". I suppose that should be the "status quo" though, since it is what we have been conditioned to expect from them.

Steve said: Well, Osborn buddy, sorry if I can't see the silver lining but I think we just look for a mountain passe, leave a few trail markers and hope some people find their way out. We've got a broken justice system and that's nothing new. Likely these things have been going on for thousands of years or more (no, not crop spraying though ). Truly I think it's a matter of getting people to think about these things and see what they can do as well. You can only do so much. Just teach them some survival skills and hope for the best.

I say:
I know, I guess the part that bothers me is I have trouble believing that propaganda can be so effective. One of the things that bothered me, recently I read an article in "Wired" magazine, talking about the government opening a line of dialogue with Will Wright, founder of the "Sims" computer/console games.

One of the things they were interested in seeing was how the AI that Will Wright uses, can be applied to population modelling. One of the areas of intrest was modelling how information spreads throughout civillized, modern societies. Our government was the creator of the internet, and I think they fear they have unleashed the beast that will undo them, and are now actively seeking ways to squelch the reach of the internet to the common people. We are seeing this materialize in the form of pressure for internet regulation by governments, to stop the recent, several breaches of security in personnel and customer files by "anonymous" hackers. Along with that we are seeing local police setting up "internet squads" that spend their workdays looking for internet violations being committed by people in their jurisdictions from anything ranging from porn, to terrorist "suspects", for which we don't even have a clear explanation of what makes one a terrorist "suspect".

They heard about the Zapatista movement, and they fear the potential of an American, British or European movement of similar proportions regardless of the intent. The only thing needed to make you a suspect anymore, is to have an outspoken belief that contradicts one of the multitude of "official" government stories, or political positions.

Steve said: You're a good man, Osborn. I wish I knew how to do magic but then again even there was a way to snap a couple fingers and set everything right, it wouldn't teach anyone anything and likely things would quickly return to worse than normal.

I say:
Thanks for the compliment, and I agree about the magic bit. But since when did common sense become such an unrealistic expectation? You would think that no matter how thick the fog of propaganda, personal freedom of mind, body and soul as well as economic transactions would be a "center" core of any person, since they can't help but realize that no matter how big the machine, or how well structured the system, they are but one piece, one part, one "individual", and the whole thing depends on them as much as anyone. Perhaps logic itself is at fault, because it has forced us to deal with the uncomfortable truths of reality? I just know that I am mystified with the human race once it leaves logic at the doorstep, especially if it is done willingly, no matter how coercive the tactics, or the entities that propagandize. Could it be the sole motive of the "thinking" beings to find a way not to "have to" think?

Isn't it self evident to everyone that no one persons "way" is right, and that the "only right way" is a "way that allows all to do as they see fit, with the only boundaries being the rights of others who have the same rights as you. (humans)"

Perhaps this is how we should be measuring sanity? Who decided where we draw that line?

I am perplexed at the levels with which the human condition will fluctuate, by its own influences and antics.

(continued)

[Osborn F Enready]

(continued)

Steve said: I'd say if you're not married already, find a good lady, save a few bucks and explore the world. I'm certain there are some good places around Maybe we've done enough work, and it's time for some play as payment ... waddayathink?

I say:
I am still trying to find the "lady" for me. I am a tough pill to take to many people, and I am sure the next lady I find that drives me into romantic inclinations, will be equally a tough pill. I find that people I have a lot in common with, and get along with, and enjoy doing things with are hard for me to meet, since they are as reclusive as I am when it comes to social gatherings, events and public places. I have long ago lost my "Politically Correct" persona for the public, and I find it hard to mask the contempt I hold for so many due to their political and social ignorance or ambivalence.

Something tells me that the next lady I have intrests in will be more interested in spending her Friday night picketing, or protesting as opposed to going to the movies and dinner. She would probably prefer a weekend camping, or at a log cabin with no tv, telephone and just a fireplace as opposed to an all expense paid trip to Vegas for the weekend.

These types of ladies are hard for me to find, and in times as trying as these I don't know if my spirit could muster the amount of affection this person would deserve. I would love to have children, but with a world picture as bleak as it is, I don't have the heart to bring another into this world to face problems most don't have the stomach to face now.

Sometimes, I think in the end, I was simply born for the revolution. I was raised on G.I. Joe and Sgt. Rock, and sold on a government of the people, for the people, by the people. Now that I have grown up and seen that it is not that, never was that(while I, OR my father have been alive), and is actually quite the opposite, I feel like a soldier who has been turned on, betrayed and used. When I joined the Navy, I believed in my country, its words and its leaders. When I came home, I realized how wrong I was, and how even my oath was a laugh in my face to the words I held dear. :confused:

The Constitution no longer stands, nor do its leaders profess its writings or its intentions.

I really feel like a broken man, who doesn't know how to make himself whole again without making closure for the wounds that have been inflicted upon me. That closure is justice being served, and the catch-22 is that justice is no longer on the menu, though we all hold the recipe to make it ourselves. Rational men have written at length about the times in which men fall upon hard questions such as these, and they have throughout history documented clear signs of change that bring about these questions, and the evils of men who claim to be for the people, but are for themselves and their select few.

I only hope to help bring about a new enlightenment, that will bond together those under the common thread of individual liberty, and the ideals that made this nation great in its noble beginnings with the Declaration of Independence, the Constitution and the Bill of Rights.

The first step in that process is making people aware of who the "enemies" really are, and why. How are we to do this, if that very enemy is the one who removes our ability to do so? The obvious answer is that we can't. Since that is the case, where do we intend to start pre-empting this through legislation before it resorts to arms?

I would say to listen to Chris Simcox from the Minutement Civil Defense Corps. The same strategy could be used for a "Minutemen, Phase II Project", to support civil liberties and provide information by raising funding through a newspaper project, informing Americans how, and why the critical abuses to our Constitution must be stopped, and reversed. The newspaper could document and explain the chronology of our Constitution, and where its limits were sidestepped by the governmental bodies, and on what pretenses, showing where promises were made and broken, and lies were told. It could show the bi-partisan links, the internal agreements to prefer lobbyists over populace. It could document the corruption of the U.S. dollar, and the manipulation of wages through inflation. It could document the piecemeal encroachment of all rights listed in the bill of rights, and the raucous propaganda of the anti-drug political movement and its parallels to alchohol prohibition.

More than anything though, it could start an ACTIVE RECRUITMENT DRIVE for a nation wide, state seperate militia, in the name of our Consitution and its Bill of Rights. A private militia, started by a private organization, for the purpose of providing defense to local, state and federal rights encroachment on individuals ranging from legal funds, to active armed militia that is available to anyone being sued or prosecuted by the local, state or fed authorities. This would merely be a "check" to the power structure created by corporations, that influence politicians through lobbying and illegal tactics. The group militia could focus on aggressive investigation into political goings on of elected officials, exposing any lies that may arise, or cover-ups that may be started. This militia would be comprised of average citizens, who seek justice in their system of government, voluntarily providing their time to work within their respective states and compile that information into a national online newspaper. Basicly, a group of volunteers working within their states so as to organize a national paper, based on misinformation and bad information being told by official persons, exposing those persons, and printing the factual information alongside the "official" story.

Imagine a national legion of Thomas Paines?

I am lost in thought on the subject, so I apologize if I am rambling.

There is an answer out there somewhere Steve, we just need to figure it out and employ it, and then convince people to have the WILL to actually DO IT, FOR THEMSELVES and not for anyone else!

I still have hope, but the cold hard weather of reality blemishes the whitewash more and more daily, and I wonder in the end what that hope will look like all cracked and fragile.

If only all men had the will to stand up, for themselves......I feel that time will certainly tell, and as of now, the meek are way behind.

[Osborn F Enready]

Is there anymore discussion on what constitutes a "free market"?