All the recent talk about tariffs and how going ZERO tariffs is good for everyone, has gotten my layman coconut thinking.
What exactly is a truly free market? A libertarian market with no government or central bank control at all?
Everything will be priced according to consumer demands and competitions?
No oil or currency price control? No critical resources and sector protection by any government of any country?
Is this really good for the world?
Will a truly “Free” market be able to sort itself out and not create giant corporate monsters?
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No. Social welfare and safety nets are essential and help create a safer, fairer, happier life for all of us. If you are born into financial stability, never have any health issues, avoid trauma, etc. etc, then maybe a “truly free” market would financially benefit you… BUT that is not the case for A LOT of people. Life is complicated and messy and without support at specific times, people can fall off the deep end. Practically speaking, no social welfare means more widespread and brutal poverty. More sick people. More people addicted to drugs. More violence. More ignorance, bigotry and illiteracy. We have happier, healthier communities when we buy-in together. You might be richer, but the world around you will be more dangerous and more depressing.
A “truly free” market in the republican sense you are commenting on would mean a total lack of regulation. It means no safety standards. No standards on toxic waste. No labor standards, undercutting salaries to employ migrant and children. No unionizing. It is a bullet train to oligarchy and feudalism. It is a completely impractical fantasy that exists only in the jello brains of people who say “all taxation is theft”
From Wikipedia:
There is near unanimous consensus among economists that tariffs are self-defeating and have a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth.[2][3][4][5][6] American economist Milton Friedman said of tariffs: “We call a tariff a protective measure. It does protect . . . It protects the consumer against low prices.”
>is no government control good?
Yes. Assuming
>creating giant corporate monsters
is your goal and you’re one of the giant corporate monsters. Otherwise no.
All the excesses of capitalism (monopoly, price manipulation, attempts to corner the market, etc.) just play out on a global scale if all regulation is removed worldwide.
Look to nature as a true example of a free market. Nature is amazing. However, it is brutal, with no safeguards. Humans have tended to want to, at least, pursue a reduction in suffering, territorial violence and an provide an ample amount of security and predictability. To achieve becoming closer to that dream, “manhandling” the market and using tariffs, taxes, fees, etc. to simulate balance as well as providing a variety of basic social safety nets, thus far, has proven to be a necessity.
It depends on if you feel that you are capable of making your own choices about what you would like to buy or if you feel the government needs to constantly interfere in that process for you.
A free market cannot exist without some level of government intervention, monopolies directly go against the free market, and are typically the endgame of unregulated capitalism.
No market is 100% free, removing monopolistic laws will decrease the freeness of a market, even if it seems like it’s making it more free because of less government intervention.
But tariffs are a different beast, they do direct go against the free market, and always result in what economists call a “Deadweight Loss”, meaning economic value is lost. If a Canadian whisky brings me 60$ worth of pleasure, and sells for $55, then I get $5 of value from it, if the company spends 55$ to create it, they get $5 from it, so in total the economic value in the world increases by 10.
If tariffs make it so the whisky now costs $70, I will stop buying it, and the economic value in the world would relatively decrease by $10. There is a direct loss due to the tarrifs, not only in the stock market (since the company now sells less), but also in consumer happiness/needs (because this also applies to necessary goods like food).
A truly free market ends in one company to rule them all; so a ‘truly’ free market is bad for everyone except the one person who wins. And it’s also bad for them, because it ignores the fact that human life relies on the environment, from which we derive valuable materials.
The free market people like to talk about imagines an ideal market with self-imposed restrictions. This obviously does not happen in reality, so the best approximation requires some very stringent requirements from a government or other overseeing entity that can help enforce the the rules. It requires diversity of products, prices, and companies. In a classical free market, the market depends on the forces of supply, demand, price, and production costs. The higher priced competition would not be allowed to buy out it’s lower priced competitor to keep the prices artificially high, as has happened so many times in reality. Nor would an industry be allowed to collude to keep supply low to artificially raise prices.
A true free market is anarchy and it’s not sustainable. The inevitable result of anarchy is the construction of a new political system.
What “true” free market economies are therefore economies managed by a light touch. There are few if any thinkers who believe the government shouldn’t provide for national defense, which is entirely socialized and centrally controlled. I think everybody also agrees that the government should provide for laws to govern our behavior, both criminal and civil, a police force to address potential law breaking and a court system to oversee the proper application of the law. Most people also agree that government should maintain a currency to help facilitate transactions between people.
I don’t think any free market champion will be upset if you support these functions of government, and we can probably call this very small government the most extreme form of a free market society that could exist without falling into anarchy, chaos, and the inevitable rise of a new system of governance.
I definitely consider myself a free market champion but these are not the only proper functions of government. I studied economics in school in part to clarify my views on these subjects. I think trade between nations is good, though Krugman and others have contended that developing economies can benefit from narrow tariffs intended to protect a critical industry. However, this isnt fool proof, these protections can and have for many nations done more harm than good. For developed nations tariffs are worthless. As Rand Paul recently said, if a transaction is voluntary and consensual it is almost certainly mutually beneficial, otherwise those parties would not have made that transaction.
I do support other interventions in the market as well. I support these to correct verifiable market failures, as defined by economics. An example of this is healthcare; demand for life saving products is inelastic, patent law grants a monopoly, and the asymmetry of information puts patients at the mercy of their providers. For these and other reasons I support intervention in these markets to promote better, fairer outcomes for my fellow man. I also support environmental laws, which can be easily justified by the tragedy of the commons and the external costs of transactions, such as air pollution, which neither the producer nor the consumer bear. Each industry needs to be overseen by Congress and regulated, though the context and circumstances and needs of each industry vary greatly and can change over time.
Because of the complexity of the current global economy a true free market is therefore very, very difficult for me to imagine. However, government can and should, in my opinion, continue to value free markets and should seek to regulate and oversee them instead of looking for more drastic methods of governance that would require a much heavier hand.
No.
In the decade of my birth the Chicago River caught fire 12 times. The actual water was on fire. You could often stand close to the city skylines of New York or Los Angeles and not be able to see the buildings for the smog.
120 years ago someone decided to ask the question how much borax should we let dairies put in the milk so they will continue to taste sort of fresh even as it goes bad. Turns out the correct answer was none. That’s how we ended up with the food and drug administration because our food was being packed full of things like borax to make it to salable.
Regulations happen for a reason.
You have not lived in a free market ever in your life nor has any member of your family that you could name. Free markets disappeared before Rome was founded. Their mythology told to you by people who want to have permission to do to you whatever they wish.
The free market does not correct for anything. If I tell the business next door to your home that they can save three cents a unit on the product they’re selling worldwide if they just simply go and shit in your well you can rest assured that the next time you opened your tab the water would be brown.
Businesses have no consciousness because I have no conscience. The people who work for the business do not have direct responsibility for anything the business does in any concrete way. So businesses will do the thing that creates profit regardless of how much misery it rains down on you. As long as it only pisses off a small fraction of their potential customers they don’t care.
If I shat in your well and you promise not to buy my product that the entire world buys, I lost one sale and then I profit on on sales to millions? Why wouldn’t I shit in your well. Heck if it keeps on affecting the curves I get my entire company to pipe their shit right into your well. Why the hell not. I can concentrate all the misery on you and getting all the profit from the rest of the world.
Tax burden to keep the markets running. Safety regulations to keep the customers coming back. Other safety regulations to keep the product from blowing up the city. Regulations that prevent you from becoming uneffective warlord.
All markets need regulations, rules, customs ,and laws. Without those things you have mere anarchy which is not the patency of your anarchist friends try to convince you it might be.
A tariff can be a scalpel sharp instrument used to fix a specific isolated problem in a market. Is something you do to an individual product or kind of product to respond to a very specific circumstance in order to achieve clear and specific goals.
This blanket tariff horse shit is basically taking a truck load of bare dirty scalpels and overturning them onto a crowded Street with no care to who gets cut stabbed or poisoned as a result.
It was not regulatory it was egotistical bullshit invoked by a petulance child who has no idea how economies work.
Having an unregulated market, with zero government control, will always end up in a Monopoly and a dictatorship. “Pure Capitalism” is a pipe dream that cannot work due to individual greed and spoiled rich trust fund babies.
Extremes in any manner tend to be bad.
There are no simple solutions for anything at global scale.
Ideally, tariffs would generate income to help with international transport and logistics involved in trade between countries. Then they have a defined purpose with a calculable price.
But, politically, tariffs can be used to try and incentivize companies to distribute from within a nation that consumes much of their product, even if they can do the job if creating that product cheaper elsewhere.
However, that is a very longterm measure. It takes time for a company to decide that would be financially beneficial, and then to get production established within the target country.