Quote:
Originally Posted by Ian
American history is filled with horror stories regarding "the market" when left unchecked.
Can you point out when the market was left unchecked?
When we speak of "the market," we are talking about a system of trade. The free market is a system of voluntary trade, value for value. Any coercion distorts a free market, making it less free.
But, because humans being the fickle persons that we are, thus making it doubtful that we will be constrained by checks and balances, you probably won't find in any organized society which has a strong government component an unchecked market.
Collapses, scandals, abused workers... despite all of that we still have people asking to "just let the markets work."
"Collapses" cannot be regulated out of existence. Not even government is immune to various collapses. Perhaps, in some totally mind-controlled society in which the notion of "success" is wiped out of human consciousness, there would be no "failure." But such a society would, for lack of motivation, stagnate out of existence. Possibility of collapse is inherent in human nature. Blame humanity for collapse, not the market.
"Scandals" also are not written into the free market. They also exist in government as well. They exist in all forms of human intercourse. Again, blame humanity, not the market.
"Abused workers" also are not part of the ethos of a free market. Abused workers also exist in government. Abuse is a form of coercion. Coercion distorts the market. Blame humanity, not the market.
I'll admit, regulations are tough to enforce in a relevant manner at a blanket level, but to just trust that a bunch of companies are going to make the right decisions for "the little guy" is crazy.
Posted from my iPhone/Mobile device
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We are conditioned to think in terms of "checking" the market by government regulation. In reality, the market has built in checks and balances which should not be distorted by government regulation. What the government should check, what it was meant to check by our constitutional system, is criminal, corrupt, abusive human distortion of the market. Our founded system was instituted to protect the market, not check it. The market was to be protected from coercion, including government coercion.
If someone points a gun to your head and demands your money with no return of value in kind, that is not free market. That is human criminality, human corruption, human abuse, human coercion. The government was formed to check that, and to let the market be free.
And if the government, either to favor by regulation some business that bribes it in order to overcome competition, or decides because of ideology, or some good intention derived from data which may be good, but is often inadequate or inaccurate, to make blanket regulations--that is a form of coercion directly on the market, not a protection of the market.
The market is made up of human trade by businesses of all sizes and people of all stripes. They all, in a free market, depend on each others' well being in order to survive. The loss of any one shrinks the market. And each business has to survey data correctly. It has to determine price and the sustainability of supply. It has to maintain customer satisfaction. If it does not constrain itself to the natural checks and balances of a free market, it will cease to exist. Or it will have to depend on some form of government coercion in the market in order to survive.
Criminal prosecution was meant to be the domain of the states and local governments. The "check" against criminal coercion is more relevantly, as you put it, regulated at local levels in touch with the needs of their populace. Different strokes for different folks rather than one size fits all.
The problem of one central authority regulating the market of the entire country is it tends to overregulate thus creating the Big Business/Big government complex that we have drifted into. The "Nation of Shopkeepers" that de Tocqueville defined as America has become much less so. The hassle of dealing with growing regulations is more easily handled by bureaucracies than by small businesses.
And that makes it more difficult to create a market for the "little guy." There are still a lot of self-motivated people who create smaller, even family, businesses. But there is more of a tendency for people to work for somebody else. Or not to work at all. The irony of illegal immigrant enclaves is that they are left more alone, not as restrictively regulated. So they are able to create a market environment that suits their community level of income and cultural tastes.
But keeping up with big government taxation and costly regulation along with growing government debt makes it difficult for "legal" small businesses and sole proprietors to keep up with the constant inflation, or even sustain their endeavors.
The right decisions for the little guys, as you put it, would better be made by a freer market. There is always a market for different levels of income if the market is free enough to provide it. What big government policies tend to do is create more little guys who depend on the government safety net to survive. That is not the market's fault. Free it up to make it viable to have functioning little guys.