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Author Topic: What we need is FAIR markets, not free markets.  (Read 9409 times)
Sovereign
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July 04, 2011, 04:03:54 PM
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Our current unregulated free markets are not fair. Prices fluctuate all the time. Free markets will create too much wealth for people. And when everybody is free, it becomes unregulated, and bad things can happen. This can't be. It's not fair for poor people. What we need is fair markets. In fair markets, a government body is established to determine a fair price for every good. Any reseller wanting to jack up prices is revoked from his license to sell things. In fair markets, the government is able to care for everyone, and able to squeeze productivity from everybody who can, without anyone becoming too rich. Life should be fair.

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July 04, 2011, 04:08:18 PM
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If you haven't heard of soviet russia... you should read up.

and also: NO!.

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Findeton
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July 04, 2011, 04:12:39 PM
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We need fair markets for basic/vital goods and free markets for expendable goods.

I don't buy into economic theories, I want economy to work for the people and not the opposite. If people need food and houses to live in, they need those things to be cheap enough (controlled market). If people want Ipods, well, that's not a primary necessity and you can let it's price float in a free market.

Free markets are a chimera because of PRIVATE monopolies, not because of the government. Therefore we can't afford to have free markets(=private monopolies) for 1st necessity goods. This is economics 101.

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lumberjack4
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July 04, 2011, 04:58:43 PM
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Life isn't fair.  Get over it.  The sooner you accept that, the sooner you can actually do something with your life, instead of bitching about the rich man keeping you down.
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July 04, 2011, 05:03:22 PM
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The question is, who decides what is fair?

A transaction doesn't take place unless both sides benefit, you don't buy a gallon of milk for $5,000, that's too expensive. But if you buy a gallon of milk for $4, you are saying that the price is acceptable, otherwise you would not buy it.

Same goes for every other good.

Since what you want is a 'fair market', and the free market is described as the voluntary exchange of goods between individuals, you're going to have to answer who decides what's fair, because it doesn't appear that you want it to be the individuals actually engaging in the transaction.

What we need is fair markets. In fair markets, a government body is established to determine a fair price for every good. Any reseller wanting to jack up prices is revoked from his license to sell things.

The actual result of this is, people will have their license to sell things revoked by their competitiors who lobby the governmental body, causing prices to go up due to lower supply. Licensing is one of the reasons why stuff is expensive in the first place as makes it difficult for supply to meet demand, and those currently engaged in that market do not want new people to enter their market as that would bring prices down.

And what if someone wants to sell below the 'fair' price, which is better for the consumer?

As usual, your attempts to help people will just make things even worse.

I suspect that this person is a troll, by the way.
bboques
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July 04, 2011, 05:20:11 PM
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Sovereign chance your name to socialist please

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Findeton
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July 04, 2011, 05:33:46 PM
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Sovereign chance your name to socialist please

Social-democrat is a better definition. I am social-democrat and enjoy one of the best socialized/universal healthcares of the world (inexpensive and high quality). Yes, I'm from Spain.

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hugolp
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July 04, 2011, 05:40:03 PM
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We need fair markets for basic/vital goods and free markets for expendable goods.

Can we have it the other way around? If we are going to have expensive prices, bad quality and even shortages I would preffer that it would ben on expendable goods and not on basic/vital goods.

Quote
I don't buy into economic theories, I want economy to work for the people and not the opposite.

Yes, so do most of the rest. That is why they study economic theory. Someone (Keynes) said: "

Quote
If people need food and houses to live in, they need those things to be cheap enough (controlled market).

Its the other way around. When government regulates it allows companies to avoid competition and introduces a lot of innecesary overhead. This produces more expensive and of less quality products. If you want food to be available for everyone, deregulate. If you want it expensive and bad quality regulate.

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If people want Ipods, well, that's not a primary necessity and you can let it's price float in a free market.

If you have to regulate something, please regulate the iPods, not the food, otherwise you hurt people.

Quote
Free markets are a chimera because of PRIVATE monopolies, not because of the government. Therefore we can't afford to have free markets(=private monopolies) for 1st necessity goods. This is economics 101.

Monopolies can only happen because of government intervention. Please, check the origin of the word monopolly and when it changed of meaning. You will be surprised.
compro01
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July 04, 2011, 06:03:49 PM
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Yes, so do most of the rest. That is why they study economic theory. Someone (Keynes) said: "

Quote
If people need food and houses to live in, they need those things to be cheap enough (controlled market).

Its the other way around. When government regulates it allows companies to avoid competition and introduces a lot of innecesary overhead. This produces more expensive and of less quality products. If you want food to be available for everyone, deregulate. If you want it expensive and bad quality regulate.

Quote
If people want Ipods, well, that's not a primary necessity and you can let it's price float in a free market.

If you have to regulate something, please regulate the iPods, not the food, otherwise you hurt people.

Quote
Free markets are a chimera because of PRIVATE monopolies, not because of the government. Therefore we can't afford to have free markets(=private monopolies) for 1st necessity goods. This is economics 101.

Monopolies can only happen because of government intervention. Please, check the origin of the word monopolly and when it changed of meaning. You will be surprised.

1. you presume the cost of regulation compares to the entry costs.  establishing a rental properly is non-cheap, even if you toss out all regulations down to building codes.

2. what do you consider" government intervention"?  does allowing limited liability qualify?
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July 04, 2011, 06:46:27 PM
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1. you presume the cost of regulation compares to the entry costs.  establishing a rental properly is non-cheap, even if you toss out all regulations down to building codes.

No, I dont.

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2. what do you consider" government intervention"?  does allowing limited liability qualify?

yes
Sovereign
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July 04, 2011, 07:02:13 PM
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Sovereign chance your name to socialist please

Social-democrat is a better definition. I am social-democrat and enjoy one of the best socialized/universal healthcares of the world (inexpensive and high quality). Yes, I'm from Spain.

Take a guess as to why Spain (and much of Europe) is currently suffering economic woes.

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July 04, 2011, 07:04:16 PM
 #12

A fair market is a free market.

Wealth is never limited to a pie unless there is a pie tin provided in the first place. Get rid of the tin I say and let every man create his own clobber.
Grant
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July 04, 2011, 07:04:28 PM
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@ OP

What exactly isn't fair about a true free market ? I can list a tonne of things that isn't fair about a regulated rigged market, show me your list.

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July 04, 2011, 07:19:50 PM
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1. you presume the cost of regulation compares to the entry costs.  establishing a rental properly is non-cheap, even if you toss out all regulations down to building codes.

No, I dont.


yes you do.  the effect of regulation on the people entering the market is proportional to their cost WRT existing costs of entry.  if they're not on the same order, the regulation's effect on the number of people entering the market is negligible.

@ OP

What exactly isn't fair about a true free market ? I can list a tonne of things that isn't fair about a regulated rigged market, show me your list.

that depends on what you mean by a "true free market".

my definition would be a market free from monopoly power, business fraud, insider dealing and special privileges for established interests.

this has the result of everyone entering the market competes on even ("fair") terms.

i do not think this situation will produce itself in a free-from-regulation market.
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July 04, 2011, 07:25:12 PM
 #15

1. you presume the cost of regulation compares to the entry costs.  establishing a rental properly is non-cheap, even if you toss out all regulations down to building codes.

No, I dont.


yes you do.  the effect of regulation on the people entering the market is proportional to their cost WRT existing costs of entry.  if they're not on the same order, the regulation's effect on the number of people entering the market is negligible.

This model of the effect of regulations is too simplistic and completely unreal. I dont asume those premises.
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July 04, 2011, 07:32:21 PM
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Sovereign chance your name to socialist please

Social-democrat is a better definition. I am social-democrat and enjoy one of the best socialized/universal healthcares of the world (inexpensive and high quality). Yes, I'm from Spain.

heres a newsflash. your country is broke and the rest of the eu has to pay for it.
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July 04, 2011, 07:37:17 PM
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1. you presume the cost of regulation compares to the entry costs.  establishing a rental properly is non-cheap, even if you toss out all regulations down to building codes.

No, I dont.


yes you do.  the effect of regulation on the people entering the market is proportional to their cost WRT existing costs of entry.  if they're not on the same order, the regulation's effect on the number of people entering the market is negligible.

@ OP

What exactly isn't fair about a true free market ? I can list a tonne of things that isn't fair about a regulated rigged market, show me your list.

that depends on what you mean by a "true free market".

my definition would be a market free from monopoly power, business fraud, insider dealing and special privileges for established interests.

this has the result of everyone entering the market competes on even ("fair") terms.

i do not think this situation will produce itself in a free-from-regulation market.

The assertion that free markets lead to monopoly is wildly incorrect. If the market is allowed to work freely over time, an apparent monopolist soon discovers that it indeed has competition. A company operating in a market economy looks like a monopoly only under myopically static analysis. A broader definition of any industry will show that there is plenty of competition, just as a narrow enough definition will show that any brand name product has some monopoly characteristics, such as a popular brand of ice cream.

The airline industry is an example. There are now two manufacturers of large passenger jets: Boeing and Airbus. Punditry has expressed inevitable fears over monopoly profits and passenger safety. However, Boeing's actions in the last three years--most notably, attempts to cut costs by modernizing the entire production process --suggest that Boeing believes it has competition.

Boeing is right, and the competition is not just from Airbus. Suppose Airbus closes its doors, and only Boeing remains. Suppose also that Boeing faces no government regulation. Can Boeing raise prices at will? If it does, in the short term, people who have to travel will find alternatives to air flight in increasing numbers. Airlines would use smaller planes as much as possible. In the long term, companies such as Beechcraft and Cessna, seeing higher than normal profits available to an interloper, might build larger jets.

Consider too the electricity business: As reported by The Economist (August 2000), deregulation in many places around the world is bringing about huge changes in the industry, including movement toward smaller local producers. Most countries and communities value a pristine environment, and smaller power plants can be "greener" than large ones. And sending power over smaller distances means that local plants, with higher at-source costs, are competitive with giant, distant plants because they save the costs imposed by distance. Thus, smaller local plants may be competitive with large producers very soon.

Automobile manufacturing provides another good example. In the early, less-regulated years of the 20th century, there were dozens of small automakers, from Deusenberg to Rambler. Now, with the purchase of Chrysler by Daimler Benz, it would appear the United States is down to two. Worldwide, Ford, General Motors, Daimler Benz, BMW, and others (even Fiat!) are buying out such storied makers as Rolls Royce, Land Rover, Jaguar, and Lamborghini.

These acquisitions seem superficially to suggest that monopolies are forming. Looking more closely, we see that the four acquired companies mentioned above were all suffering financial difficulties when purchased by others, and notably, the acquired represent marques many automobile enthusiasts consider worth saving. They were purchased because they weren't making money, yet offered appealing products that should be profitable. That someone was losing money building popular cars suggests not that the industry tends toward monopoly, but that there were management shortcomings.

The automobile business continues to be stiffly competitive. Startups such as Hyundai and quasi-independent marques such as Saturn and Geo show that the high cost of entry into this capital-intensive industry is not enough to dissuade newcomers. Further, new trends such as the SUV and specialty vehicles such as the popular retro-kitsch Chrysler PT Cruiser show that even established automakers still must innovate to survive.

These three industries--planes, automobiles, and electricity--are three of the most capital intensive, and all show that when the market is free, there is no monopoly. But for the sake of argument, let's assume that your electric company decides to triple its rates. What would happen? In the short term, people would use candles for light, turn down their thermostats, and find other ways to use less power. In the longer term, we would find alternatives to our current provider, and the freer the market, the less time this would take. Economic profits attract entrepreneurs from under rocks, and some of these new competitors will offer truly good deals.

If your electric company, or Boeing, decided to raise prices arbitrarily, and customers were forced to find long-term alternatives, would there be inconvenience? Certainly. But any inconvenience would signal entrepreneurs that profits were available, and they would act. Over time, this natural market process would have us enjoying more choices, and more affordable ones. Contra Marx and Galbraith, free competition does not generate monopolies, but rather stymies them.

(Mises.org author: Brad Edmonds) http://mises.org/daily/621

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Findeton
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July 04, 2011, 07:58:13 PM
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Sovereign chance your name to socialist please

Social-democrat is a better definition. I am social-democrat and enjoy one of the best socialized/universal healthcares of the world (inexpensive and high quality). Yes, I'm from Spain.

Take a guess as to why Spain (and much of Europe) is currently suffering economic woes.

I know way better than you why Spain is suffering economic problems. It has nothing to do with universal healthcare. These are the main reasons:
1) We lived in a real state bubble for too long. People assumed very high risks buying houses and taking 30+ years of mortgages. Banks assumed very high risks granting those mortgages because they do not care about risks: if there's any problem the central bank and the government will bail them out. This is socialism FOR THE RICH. Hey, I'm for bitcoin, I'm social-democract, I don't like the way banks rule.
2) We built our industry around... tourism and real state. That's no industry, that's just smoke.

That's why we have 20+% disemployment. It's not related to the socialized/universal healthcare, because we actually pay less dollars per person than you, and less percentage of our GDP per person and less percentage per sallary than you. And still, we get a better healthcare. For everyone. So don't just mix unrelated things up.

Yeah, if I happen to get cancer I'll pay nothing more than what I'm paying right now. And the costs of getting such a nice universal/socialized healthcare are less than what you pay right now, in every fracking aspect (total, percentage of GDP, and percentage of our sallary). It's WAY more efficient than your privatized system.

heres a newsflash. your country is broke and the rest of the eu has to pay for it.

No, it isn't, actually, that's Greece, Ireland and Portugal. We have a disemployment problem, not a state debt problem.

And if it was, I say we should then get out of the euro and don't pay our debts: economists have studied those situations and the result is that it only affects the country for 1-2 years (markets have a short memory), while the "bail out" affects the country for decades.

The assertion that free markets lead to monopoly is wildly incorrect.

Free markets don't always lead to monopoly, but they CAN lead to monopoly. That's a fact.

Quote
Free markets are a chimera because of PRIVATE monopolies, not because of the government. Therefore we can't afford to have free markets(=private monopolies) for 1st necessity goods. This is economics 101.

Monopolies can only happen because of government intervention. Please, check the origin of the word monopolly and when it changed of meaning. You will be surprised.

[Wikipedia] In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.

Yeah, under that definition monopolies can actually happen without government intervention. And they do happen.

Let me give you an example: Microsoft. Yeah, Microsoft. Almost everyone uses windows, so hardware designers and computer distributors want their products to be windows compatible. Microsoft had the monopoly so they forced sellers to sell their computers with windows installed if they wanted windows to work on their machines. That is the "a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it." part. Until that moment there was no government intervention. Fortunately, governments did intervene.

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hugolp
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July 04, 2011, 08:09:36 PM
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[Wikipedia] In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.

Yeah, under that definition monopolies can actually happen without government intervention. And they do happen.

Let me give you an example: Microsoft. Yeah, Microsoft. Almost everyone uses windows, so hardware designers and computer distributors want their products to be windows compatible. Microsoft had the monopoly so they forced sellers to sell their computers with windows installed if they wanted windows to work on their machines. That is the "a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it." part. Until that moment there was no government intervention. Fortunately, governments did intervene.

You are kidding me right? Microsoft biggest clients are government administrations. What regulations did the government pass that went against MS except some of the EU with no real impact?

Im not using MS. How is that a monpolly?

Monopollies, that is situation that harm the consumer, can only happen with government intervention.
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July 04, 2011, 08:22:16 PM
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Our current unregulated free markets are not fair. Prices fluctuate all the time. Free markets will create too much wealth for people. And when everybody is free, it becomes unregulated, and bad things can happen. This can't be. It's not fair for poor people. What we need is fair markets. In fair markets, a government body is established to determine a fair price for every good. Any reseller wanting to jack up prices is revoked from his license to sell things. In fair markets, the government is able to care for everyone, and able to squeeze productivity from everybody who can, without anyone becoming too rich. Life should be fair.

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