Free-Market Regulation

Discussion in 'Economy' started by namaan, Nov 28, 2009.

  1. namaan
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    namaan Rookie

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    DISCLAIMER: I am not a socialist, communist, or fascist, and don't prefer to be a capitalist (can't really be helped though this day and age). But I'm all for 'free'-markets! Anyway, here you go, and thanks in advance :)

    There is an argument by hard-line capitalists that bastardizes the 'free' in a free-market system. It seems to suggest that this free should mean free of regulation; as if a regulated free-market system were an oxymoron. A regulated free-market system is not an oxymoron! It's merely a form of qualification. It's similar to how you might say that something is west of east; it isn't an oxymoron, you are qualifying that something is just west of a certain eastern reference point. Now, a free-market system is, inherently, a system. And any worldly system is regulated in some form. Even if a free-market system isn't regulated by humans, it is still bound by natural thermodynamic regulations. In fact, there is no worldly system that isn't bound thermodynamically.

    So it's meaningless to ask whether a particular worldly system is regulated or not; it's more accurate to ask about the degree of regulation. We don't live in caves, we don't drink from streams, and we don't take dumps out in the open. That would be the daily state of affairs had we accepted the natural regulatory system as enough for us. And no, we didn't think it to be enough, and rightfully so. What we did do was to regulate and control our activities a bit more than this natural state of affairs. And soon enough we found ourselves living in these marvelous civilizations that we so often boast about, and for good reason of course.

    But how ironic is it that it's the economists of our very own great civilizations that tell us that a free-market system that has regulations that even cave men may find lacking is good for us! So let's be clear about a few things then 1) a free-market system without regulation is a non-entity 2) to complement the advances of modern civilizations, a free-market system would ideally have a complementary level of regulatory systems in place.

    To those who have gradiophobia (fear of gradations and uncertainty i.e. reality; finding black/white perceptions appealing), it's all too easy to argue that any piece promoting regulations of 'individual freedom' is a propaganda piece for economic collectivists. Well, truth be told, the moment cave men decided to give up their natural dwellings and build some dwellings with their own hands, they took the first steps towards the adoption of the social contract. What is the social contract you might ask? Well, put simply, it's when individuals as citizens give up their rights to the state, and in return expect rights from the collective citizenry of that state. So yes, unless you do live in a cave and drink from streams and take dumps out in the open, you are a collectivist. Of sorts; the caveat of course being that a discussion of the free-market system specifically brings into focus economic collectivism. Never-the-less, the over-arching point here is that all us have already submitted to this social contract that binds us to collectivist terms of interactions with our fellow man.

    So the question is, what but the most arbitrary of reasons can one have to extend this collectivist approach to human interactions but not to human economics? Albeit, the point of this piece isn't to go into the specifics of appropriate economic regulation. Rather it's to wholly extinguish the notion that a free-market system is one best served unregulated. I will take my house and my plumbing thank you very much. Actually, there is one more important, though unrelated, point here; the free-market system isn't the birthright of capitalism. Rather, more poignantly, the free-market system does not belong to capitalism; it is merely borrowing it. If the capitalist ideological state can't get its act together and come to the unavoidable conclusions reached above soon, than it's curtains indeed to an anachronistic and static ideology.

    P.S. I'm no expert on economics and took no classes. So I hope to learn more than anything. BTW...this was originally written for a different audience, so please don't mind the perhaps aggressive tone?
     
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  2. 2Parties
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    2Parties Senior Member

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    "The State" is not some god-like entity in which we need to serve, who can create something out of nothing, and who can better the world. "The State" is a collection of individuals who rule over others, nothing more, nothing less. If we accept the idea of rights (in their traditional sense) as valid than rights can not be granted, given up, and they are innate to every person.

    The statement that would actually follow would be as follows: If you support a single group (a few people) taking over a stream, regulating among everyone else who has access, regulating how much you can take from that stream, and how much each person has to pay for access to stream, and using guns to threaten or kill people who disagree with your takeover, you are a collectivist.

    Please explain the specifics of the contract, and how any person can enter into said contract without agreeing to it or even knowing what it is, and how this can meet the definition of what a contract is according to a dictionary.
     
  3. Oddball
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    Oddball BANNED Supporting Member

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    I always love that phony "social contract" argument. :lol:
     
  4. Toro
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    Toro Diamond Member

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    Capitalism works best when it has rules to guide it and laws which give more information to people to make better economic decisions.

    I didn't read the OP otherwise. I'm too tired right now. Maybe tomorrow.
     
  5. Toronado3800
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    Toronado3800 VIP Member

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    If something vague for an answer will work:

    Human failings make pure socialism not work.

    Human failings make pure capitalism not work.

    Our founding fathers were aware of these failings and put into place a system of checks and balances.

    Regulations (laws) for businesses are one of these checks and they must be modified from time to time. We can argue about to what extent. Good regulation...I'll say if not for the FDIC and their regulations banks would be a very risky place to put money. Poor regulation....the multiple copies of paperwork required to prove the product you bought meets the new flame resistance standards in the mattress industry.
     
  6. namaan
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    namaan Rookie

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    I agree? Hence why I'm confused about what your point is. In fact the semantics of what a state is isn't too relevant to the point of this piece.

    Again, I don't get the point of this statement. You're basically saying that everyone should have a right to do whatever (s)he pleases. Not to be rude, but while that may work in a fairy tail, in the real world, not every citizen of a nation is informed enough or even cares enough to impart authority for the good of all. This isn't a pessimistic view; it's only reality that some centralized institution has to be given authority over the state. The degree of authority is up for debate of course, but there's no credible nation without such an institution.

    Now, we could argue about whether the word state should be used to represent the citizenry or the institution. But again, it isn't really relevant to this piece. And depending on the form that the governing institution takes, they could be nearly one in the same thing.

    Again, as far as the point of the piece is concerned, I don't understand how this is relevant (also read: what's your point? :( ). That sentence you quoted was only meant to point out the existence of collectivism, not its quality (good or bad).

    Well, it's good that you ask this, since part of the reason I posted this was to get some idea of how many people even think about this stuff. Now granted, this is an economics forum, but I got zero responses by posting it in another forum (and gave up eventually). I mean it only concerns the central driving force behind all economic activity around the globe, and economics only happens to be the predominant human activity on this planet (I'm liberally dropping my personal understanding in this statement of course).

    Anyway, whether or not you decide to enter into or agree to this contract doesn't matter and isn't an excuse. Consider the (simplified) story about Socrates; he was jailed and his friends offered to help him escape. But he decided against it. He understood that by the mere fact that he had lived in the city state all those years, he implicitly agreed with the social contract binding him to his state. After all, it's the state that had been providing him with security & stability, infrastructure, institutions, access to knowledge and resources, etc.

    For example, if a person had to physically agree to some written form of the social contract, than, strictly speaking, what's to stop someone from not signing it and saying that they didn't know they were obligated in anyway to serve their nation in a time of war? On what basis would you implement a draft? This is an extreme example to make the point, but there are many other such examples.

    Well, that's it for now, thanks for your feedback.
     
  7. KittenKoder
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    KittenKoder Senior Member

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    Actually, "pure" capitalism, if there was such a thing, would work in spite of human "failings" ... with only one simple law: Politicians can never own stock or any business ever. ;)
     
  8. namaan
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    namaan Rookie

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    Care to elaborate? You must have a pretty solid understanding about this subject for you to so nonchalantly call the centerpiece of the whole argument phony. Well, do let me know if you have anything else to add :cool:
     
  9. Limey
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    Ther e isn't. People confuse the economic spectrum (from command to laissez faire) with political economy. Capitalism is prone to crisis. This is encouraged by human failings that generate market concentration problems. Government regulations then becomes a vital aspect of the reproduction of profit. The US, for example, has been largely reliant on her military sector to maintain stability: from the generation of innovation (describing basic market failure in technological progress) to demand managment.
     
  10. editec
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    editec Mr. Forgot-it-All

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    Of course the folks who have an 8th grade POV about marcoeconomics will presume you're a socialist.

    Not your fault, they're ignorant.

    Astute thinking. Markets cannot exist in a state of anarchy. In fact marekts ONLY exist in places where there is some regulation.

    So the only question we need to ask ourselves is how much regulation and what kind of regulation does our market really need?



    Yup.

    You've just lost more than half your audience, but what you're saying is spot on accurate

    Yup!



    That's right.


    In order to have a civilization, we create a SYSTEM with a division of labor.

    That demands order. and order demands some kind of regulation.

    We all wish that were not so, but that is the way it is.

    Pure freedom of the individual = anarchy.

    Aanrchy is the kind of freedom only brutes long for.


    Not ALL economists say this.

    Apologist economists for the system we have NOW, are saying this.

    They take their marching orders from the people who pay their salaries.



    Exactly

    Great word.

    Yes, the black/white thinkers are basically people incapable of thinking very deeply about things. Another less polite way of describing these people is to say they are freakin' idiots.





    The original social cotract was the family. Mankind has never been the FREEDOM ANIMAL some of these idiots seem to think it was.



    We're born into this social contract. Some of us are big winners because of that contract, most of us are not so kucky.

    The reason people on top of the heap claim that they want FREEEDOM is because they want THEIR FREEDOM from regulation

    They want everbody else to be HIGHLY REGULATED.

    Dont you think it somewhat ironic that the land of the free has more prisoners per cpaita than any other nation on earth?

    That's because we are not REMOTELY the land of the free.

    Somalia is the land of the free, folks.

    Do any of you libertarians really want that kind of freedom from regulation?

    Of course not.

    You are NOT the people you think you are, you know.

    You don't love freedom although I do't doubt you think you do.

    What you really love is AFFLUENCE, an affluence brought to you by a society that is highly regulated and anything but FREE.






    You've done a good job.

    Pearls (mostly) before swine, though.




    Capitalism cannot exist in a FREE MARKET. It was['t born in afree market. It has never existed as a free market, either.

    The phrase FREE MARKET really makes no sense at all.


    However you arrived at you conclusions, they are, I thik, essentially correct.

    Markets ONLY exist in places that have some order.

    Order demands regulation.

    Regulation is the opposite of FREEDOM.

    Markets which can find the happy clance between regulation and freedom thrive.

    Thjose with too much regulation stifle creativity ad productivty.

    Those with too little regulation typically fail to thrive for the society as a while, even though they might make some individuals very well off until that society falls apart entirely.

    Much as it appears ours is doing, right now.
     
    Last edited: Nov 30, 2009

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