The Illusion Of "Free Markets"

[Donnachaidh]

http://smirkingchimp.com/thread/jmadison/37951/the-illusion-of-free-markets

One of the most frequent cries from the libertarian right is that government interferes with, and even prevents, the existence of free markets. Taxes, government regulations and other statutory burdens keep America uncompetitive. Never mind the fact that we have lower taxes and fewer and more lax regulations than almost any other developed country.

This is one of the places where libertarianism truly breaks down. There have never been, in the entire history of mankind, any such thing as free markets. The very term itself is illusory.

During times of little to no government interference (rare in history, because governments always want their tax, don't they?), the markets cease being free rather quickly. Collusion, trusts, monopolies...these form quickly and stifle competition more severely than any sort of government action other than nationalization.
Are markets that are dominated and controlled by a few large players really free?

Look at business sectors where government interference is almost nil. Just try to start a health insurance company right now. It took a few decades, but a trust has formed that makes it almost impossible to compete with the big six. There are a lot of brand names out there, but almost all of them (except for a few regional or single state carriers whose own days are likely numbered) are actually owned by one of the big companies.

More at the link --

[ewagner]

1. the free market is only an intellectual construct.

whenever and where ever it has been tried, it has failed...I've written and spoken on this until I'm blue in the face and get called "socialist" every time I mention it.

here:

http://mwprogressive.blogspot.com/2011/06/shock-and-awe.html

[bemildred]

2. +1.

An arbitrary but convenient abstraction, reified into a secular deity.

[louis-t]

3. And the big 6 run their commercials non-stop.

They're all "$400 less than the other guy" who is $400 less than the next guy.....

[The Traveler]

4. You guys are not wrong

The "Free Market" strikes me as a simplified model, an abstraction. As an abstract concept, it serves the same purpose in the study of economics as frictionless inclined planes in physics.

No one in high finance relies exclusively on that formulation, just as mechanical engineers do not ignore the role of friction in their designs. The game theory formalisms of Nash and Stigler are employed every day, a tacit acknowledgement that the Free Market model is inadequate to predict real world behaviors (and hence risk of investment and business strategies).

The elevation of the Free Market to Deus ex Machina status was a political master stroke by the right and the corporatists they serve. What makes it heinous is that those who understand the math understand that what you say is exactly true.

Trav

[LatteLibertine]

5. We're solidly in the grip of cronyism

"Free markets" is a simply a talking point. Real competition and free markets are not truly desired by the status quo.