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What Happens When the Free Market has Its Way...

Discussion in 'Consumer Affairs' started by Sunstone, Feb 16, 2016.

  1. Sunstone

    Sunstone De Diablo Del Fora
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    [The whole short article is well worth reading and can be found here]

    Are free, unregulated markets better than regulated markets? Why or why not?
     
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  2. Revoltingest

    Revoltingest Greased up & ready for action!
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  3. lewisnotmiller

    lewisnotmiller Grand Hat
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    Nope.
    Extremism at either end (zero-regulation or over-regulation) are bad, in my humble opinion.
    Over-regulation will drive up cost, reduce choice, and also remove creativity. The market will stop reacting to changing demands, etc.
    Zero regulation results in a trial by error approach to safety (as an example) and then puts the onus on individual consumers to even understand the lessons learnt, and whether a particular product has applied them.

    Consider regulations around accurate ingredient identification in food. Without getting into specifics, this doesn't enforce anything other than transparency to the consumers, and actually promotes market forces to drive production. It also promotes renaming of common products so as to obscure this aim of transparency, but that's a little beside the point in relation to the OP. Regulation, when sensibly written, doesn't need to be stifling or overly costly.
     
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  4. buddhist

    buddhist Well-Known Member

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    The problem with the "free market" today is that it isn't really free. Individuals are shielded from personal liability through corporate fictions and other legal methods. It doesn't scare a business proprietor to cut edges any which way he can manage, when his personal wealth is legally shielded apart from his business venture.

    A true free market does not involve transactions between businesses and customers; it would be between individuals and other individuals.

    If you (an individual, unshielded from personal liability) sell me (another individual) one of your goods, the following would occur:

    1. You'd probably make sure that your product is as safe as you know how to make it;
    2. You'd advertise that fact;
    3. You'd sell your product only to those who you know on an individual basis (e.g. family, friends, local community) with similar standards as yourself - to those whom you trust and who trusts you and your product in return;
    4. You'd be wary of selling to those whom you don't know (e.g. someone on the other side of the world, with different standards);
    5. If you do decide to sell to those whom you don't know, you'd make sure you disclaim liability, and the stranger who purchases your good would have to willingly assume personal liability of using your product.

    This ensures and encourages small, strong, cooperative, and cohesive local communities with shared standards; it also encourages people to be morally and ethically upright (lest they be personally sued to oblivion, with personal reputation and livelihood destroyed), with every individual in the community providing a check on every other individual in the community; it also discourages unbridled greed (a consequence of international trafficking in goods, corporate fictions to shield liability, etc.).


    Obviously, this system doesn't work well for those interested in anonymously amassing great private fortunes.
     
    #4 buddhist, Feb 16, 2016
    Last edited: Feb 16, 2016
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  5. Sunstone

    Sunstone De Diablo Del Fora
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    That seems to cover a multitude of options. Can you offer something more specific?
     
  6. Revoltingest

    Revoltingest Greased up & ready for action!
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    Where I see the greatest usefulness for regulation is when consequences are large.
    Example.....
    Real estate broker licensing is useful because the damage which a client could suffer from improper actions by the broker could easily exceed the broker's ability to make the buyer whole. This regulatory burden is minimal.....except for tedious continuing education (Boring!). So educational & ethical requirements are worthwhile. But I oppose regulating commission rates & other economic aspects.

    See above.
     
  7. Sunstone

    Sunstone De Diablo Del Fora
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    Do you think consumers generally make rational choices?
     
  8. Sunstone

    Sunstone De Diablo Del Fora
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    How rational do you think consumers are in general? How well informed do you think they are?
     
  9. lewisnotmiller

    lewisnotmiller Grand Hat
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    Hmm...that's a little different to how I'd assess (even realising we're talking generically)
    It would be a basic ROI type of measure for me. An onerous or costly regulation should only be used where consequences are large.
    A minor regulation (in terms of cost, etc) might be implemented even if the consequence are smaller, particularly if that regulation may promote innovation or consumer freedom (ie. grease the free market wheels, so to speak)
     
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  10. lewisnotmiller

    lewisnotmiller Grand Hat
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    I think they can be very well-informed in certain areas. But I think it's rare that consumers are well informed across the board.
    For example, I get used as a sounding board for tech purchases by friends. This actually makes sense for some sorts of tech, whereas others they would be better served to hit Google.
    Food labelling makes far less sense to me. My wife understands the various names by which sugar can be 'hidden' on labels though.

    Ultimately I don't care if consumers are rational or not. That is, ultimately, on them. But I do care if the means to a rational decision are hidden, or needlessly difficult to access.
     
  11. Revoltingest

    Revoltingest Greased up & ready for action!
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    Yes, ROI evaluation is critical.
    Oddly, I know people IRL who oppose this consideration.
     
  12. buddhist

    buddhist Well-Known Member

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    They'd have to, if they knew that the onus of responsibility is on themselves.

    If they can't for whatever reason (e.g. incompetence), their local community - those who personally know the individual - would know of it and step up to guard that individual as a personal moral and ethical obligation.

    The systems in place today, with endless laws shielding personal liability among other evils, promotes the destruction of personal and cooperative responsibility, and destroys local communities and culture.
     
  13. Sunstone

    Sunstone De Diablo Del Fora
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    Do you know of any culture or society that closely reflects your ideals?
     
  14. Sunstone

    Sunstone De Diablo Del Fora
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    Do you agree with Speaker Ryan's view that menu nutrition labeling should be rolled back? Here's his justification:

    "The government should not be placing more harmful barriers in the way of hardworking small businesses. This important legislation would roll back the FDA’s burdensome menu labeling rule, giving American restaurants, grocery and convenient stores the flexibility they need to be successful."
     
  15. lewisnotmiller

    lewisnotmiller Grand Hat
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    Idealism is all well and good, but it's sullied as soon as it is implemented. Best to plan for reality than ignore it, in my opinion.
     
  16. buddhist

    buddhist Well-Known Member

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    I'd say any pre-industrial civilization centered around the local village.

    Corporate fictions are the root of evil in this circumstance. Such fictions have caused the virtually unchecked growth of corporate industry and the human population, pillaging of the Earth's resources, and the growth of other personal and cultural immoralities for the sake of personal wealth. As Jeremy Bentham stated, "fictions are to law what fraud is to trade".
     
    #16 buddhist, Feb 16, 2016
    Last edited: Feb 16, 2016
  17. Orbit

    Orbit I'm a planet

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    Unregulated markets have destroyed our economy. The Wall Street collapse, moving jobs overseas because of
    "free" trade, and the water poisoning in Flint, all of it the working of free and unregulated markets.
     
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  18. Nietzsche

    Nietzsche The Last Prussian
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    That kind of system doesn't work on any manner of larger scale.
     
  19. buddhist

    buddhist Well-Known Member

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    That's the point: the system I described does not support it; there shouldn't be a "larger scale".

    The limits imposed by a true free market system works for the good of individual and community morals and ethics, and works to balance mankind with natural limits (e.g. population, resources, etc.). Those limits should be respected, not surpassed or bypassed through the use of legal fictions to feed the greed of business proprietors and their shareholders.
     
    #19 buddhist, Feb 16, 2016
    Last edited: Feb 16, 2016
  20. Nietzsche

    Nietzsche The Last Prussian
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    Or raise the standard of living either, right?
     
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