What are the components of a Free Market? For example, no government subsidies, no mandated monopoly laws, no entry to market laws (or exist laws for that matter)
No government/no legal barriers to entry.
Mises Community Natural Rights Discussion Group
No coercion/theft/fraud/property damage/murder
Schools are labour camps.
A free market is a market without government intervention in the economy.
Liberals don't mean to destroy people. They just do.
eliotn: No coercion/theft/fraud/property damage/murder
So a free market is the same as utopia? It is only reached if all that never happens?
eliotn:No coercion/theft/fraud/property damage/murder
How about no institutionalized coercion/theft/fraud/property damage/murder ?
Morty: eliotn: No coercion/theft/fraud/property damage/murder So a free market is the same as utopia? It is only reached if all that never happens?
I guess I made a flaw. I guess I mean that this stuff is not legit, and is prevented/stopped by people acting in self-defense (guns, pdas, etc.)
ViennaSausage:What are the components of a Free Market?
A market is a collection of actions/actors, so I suppose a free market would be a collection of free actions/actors, those which are voluntary.
-Rules of the game favors strong competition.(Easy entry, exit) But each industry has its own different competitive characteristics.
-Little monopoly power as possible. (Many companies).
-No government intervention whatsoever, except for laws to make markets competitive.
-Definitively, free markets are not in practice.
I like the Mises definition of a free market:
A pure or unhampered (i.e., free) market economy is an imaginary construction which assumes: (1) The private ownership (control) of the means of production; (2) The division of labor and the consequent voluntary market exchanges of goods and services; (3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services; (4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud.
(1) The private ownership (control) of the means of production;
(2) The division of labor and the consequent voluntary market exchanges of goods and services;
(3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services;
(4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud.
Obviously, anarchists would take issue with the fourth critereon but I think it is safe to say that there must exist some form of social apparatus that performs the same function whether it be government or otherwise in order for it to be a free market.
Fried Egg:(3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services;
By institutionally, is Mises referring to governments or firms? Would institutionally interference include unions? Unions essentilly fight for wage rates. In its current form, their are far too many protections for unions.
These are great points, and perhaps umbrella other features of a free market. I took Mises point from Fried and associated (to the best of my ability, I am sure there is overlap) with each of the points everyone else on the list mentioned.
Fried Egg: A pure or unhampered (i.e., free) market economy is an imaginary construction which assumes: (1) The private ownership (control) of the means of production; No government/no legal barriers to entry. A free market is a market without government intervention in the economy. No coercion/theft/fraud/property damage/murder (property rights) (2) The division of labor and the consequent voluntary market exchanges of goods and services; A market is a collection of actions/actors, so I suppose a free market would be a collection of free actions/actors, those which are voluntary. No coercion/theft/fraud/property damage/murder (property rights) (3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services; no institutionalized coercion/theft/fraud/property damage/murder (property rights) (4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud. Rules of the game favors strong competition.(Easy entry, exit) No government intervention whatsoever, except for laws to make markets competitive.
A pure or unhampered (i.e., free) market economy is an imaginary construction which assumes: (1) The private ownership (control) of the means of production; No government/no legal barriers to entry. A free market is a market without government intervention in the economy. No coercion/theft/fraud/property damage/murder (property rights) (2) The division of labor and the consequent voluntary market exchanges of goods and services; A market is a collection of actions/actors, so I suppose a free market would be a collection of free actions/actors, those which are voluntary. No coercion/theft/fraud/property damage/murder (property rights) (3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services; no institutionalized coercion/theft/fraud/property damage/murder (property rights) (4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud.
Cesar:-Little monopoly power as possible. (Many companies). -No government intervention whatsoever, except for laws to make markets competitive.
Few companies does not imply monopoly power, nor does even one company. And anti-trust laws (which I imagine are what you mean when you say "laws to make markets competitive") are completely illegitimate, inefficient, and ineffective.
I would suggest to you the significant amount of Austrian writings on the issue of monopoly. Thomas DiLorenzo has done great work on it, and Murray Rothbard gave an excellent account of the topic in his writings as well. There is no such thing as a monopoly in the market unburdened by the government and anything the government does to make the market "more competitive" makes it less competitive in actual fact.
There's also Dominick Armentano's great work on monopolies and their non-existence in markets.
-Jon
To darkness I condemn you...
ViennaSausage :By institutionally, is Mises referring to governments or firms? Would institutionally interference include unions? Unions essentilly fight for wage rates. In its current form, their are far too many protections for unions.
I don't think you could include union activity as "institutional interference" as long as unions had not special protection in law. Workers would be free to organise and collectively bargain just as employers would be free to discriminate against union involvement or collaborate with other firms.
Morty: Cesar: -No government intervention whatsoever, except for laws to make markets competitive. Few companies does not imply monopoly power, nor does even one company. And anti-trust laws (which I imagine are what you mean when you say "laws to make markets competitive") are completely illegitimate, inefficient, and ineffective. I would suggest to you the significant amount of Austrian writings on the issue of monopoly. Thomas DiLorenzo has done great work on it, and Murray Rothbard gave an excellent account of the topic in his writings as well. There is no such thing as a monopoly in the market unburdened by the government and anything the government does to make the market "more competitive" makes it less competitive in actual fact.
Cesar: -No government intervention whatsoever, except for laws to make markets competitive.
This is exactly what I seriously disliked in my macro-materials. The professor was basically saying that on the free market there has to be a lot of competition between many companies in every sector of the market. This of course is not the characteristic of a free market. In case where a natural monopoly is the most efficient way to produce, it is hurtful for everyone when government pushes other companies into the sector. Since the companies would not get involved themselves the government would probably have to hamper other sectors. And this would not only make it more inefficient in the sector where the natural monopoly is required but also in the hampered ones.
PS! Sorry for my poor English, haven't been using it for a while.
One night I dreamed of chewing up my debetcard - there simply is nothing like hard cash in your pocket!
ViennaSausage: What are the components of a Free Market? For example, no government subsidies, no mandated monopoly laws, no entry to market laws (or exist laws for that matter)
All interactions between actors are voluntary and when they are not the aggressor is made to pay retribution.
Andrews Environmental Management
No, its that all the actions fall outside the market.
All exchange free of those conditions compose the free market. Anything else is crime.
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