Quote:
Originally Posted by u-Bob
completely laissez-faire.
- The free market is the whole of all voluntary transactions that take place.
- People act.
- People act because they want to accomplish certain goals.
- These goals are different for every individual (some people prefer wine, other prefer beer, other prefer water. Some like to travel, others like to stay at home. Some like to watch reality shows, others like to watch sports...)
- To accomplish those goals, people use scarce resources (there isn't an infinite supply of gold, iron, oil, wood etc).
- All people are different so everyone is good at different things.
- People can increase the amount of goals they are able to reach by 'working together' instead of doing everything themselves.
- 'working together' = the free market. People specialize in what they do best or like doing most and then trade with each other. This allows for a much higher output then when everyone would do everything themselves. (Law of comparative advantage)
- Money is just an intermediary medium of exchange.
- The process that coordinates the market is the price mechanism. The price people are willing to pay for a product or service gives you information about how badly people want that product and about how scarce that product is.
- The factor that drives the market is entrepreneurship. Entrepreneurship = "finding 'new combinations' of labor, natural resources or capital goods for the purpose of making a profit." The entrepreneur is able to make a profit by finding out what people want (for example: if the price of widgets goes up because more people are now willing to pay a higher price for those widgets, that tells the entrepreneur that there are people who want widgets) and by offering people what they want or by finding a new product that performs the same function (or more) than the product people originally wanted.
What causes problems: Aggression. When some entity (like the government) forces people to buy products at a price they are not willing to pay for it. Or when that entity forces people to sell products at a price that they don't want to sell their products. Or when that entity forces people to buy products they don't want to buy. etc
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well, it's all cool and dandy... in la-la-land. In real world, one guy makes, wine, one makes beer, one makes cheese, and there are one or more guys who will wait until they produce all those delicious things and come with a big stick, steal all the production, rape their daughters and enslave everybody to continue producing. It's called story of the world since Lucy (the Australopithecus afarensis not Lucille Ball!) until now (and the millenniums to come). In order to avoid that, you need some kind of protection, whether it's from some kind of government or private. In La-la-land, private could be an option because they're oh so good and heartfelt no problem would arise, but in real world the guy who produces wine will try to destroy the guy who produces beer so they will eat only cheese and wine. It's called capitalism 101, but it really came from ancient times with different names and political systems.
On top of that, not a single DECENT economist would defend an absolute free trade market. And besides reality, there's a technical explanation: absolute free trade is only possible when the products are scarce and mensurable (like you said). However, when you add the variable of services, there's a loss of balance since... how do you value work time in terms of cheese, beer and wine? There's a solution to this, though: as long as the services demand doesn't surpass what the whole market produces and the market stays on a limited size, the system will be stable. In general, that should work, specially when you have adjust mechanisms based on sustainability and future production.
But... then we get the intangibles. Let's say that in your system there were 5 producers of each product, so each producer decides to "add value" with a nice packaging, branding, advertising, etc. The product is EXACTLY the same, only that now it costs 3 or 4 times more. So... where is that 75% of "ghost" value?
Let me explain it with another easy to understand example: The value of the Internet business amounts to trillions of dollars. Now, let's say someone pulls the plug of the Internet tomorrow and Internet is shut down. There would be entire countries collapsing and the biggest crisis ever seen in history, right? The funny thing is that, in reality, if you look around, you didn't lose anything. The cows are there, the grapes are there, teh barley is there. In real value terms, you are not richer or poorer. Yet you're facing a crisis that may end your society, the world as you knew it and even your life.
The point is that there wasn't a single time or place in history where absolutely free market existed other than isolated villages in ancient times. At most, there were some RELATIVELY FREE markets. Nowadays it is BEYOND an utopia. For a single reason: who do you think will protect you, regulate laws, build infrastructure, look out for development, etc. The guy that makes beer? Will he build roads? will he build a dam? will he look for the cheese guy not taking out the winery? Unrealistic, huh? And so... how do you think all this "superior entity" is maintained? With good wishes? The cheese, wine and beer guys will abandon their production to build a dam which they don't have a fucking idea how to build?
Seriously, I know these ideas may sound like original or cool but they aren't new at all, if you know a little of Malatesta, Gramsci, Bakunin or even
Saint Simon you would have seen them in one shape or another. Plus, I've noticed how you did concentrate on the New Deal I mentioned (twisting it) but you avoided everything else. And it's for a simple reason: what you're saying, as good, bad, wrong or right as it might be, is an absolute impossible in real world and in this times (or any time to come). In fact, more or less what you're proposing is called
Anarcho-Primitivism: not by theory itself, but for the only possible results to this model: A "Waldenesque" lifestyle
