The supporters of the Free Market Fairy, who magically waves her (his?) magic wand and solves all problems via the Magic of the Marketplace, say that free markets are the most efficient solution for all problems despite the evidence all around us that in many problem domains a free market simply doesn't work because it gives too much of an incentive for predatory behavior. You don't open your Yellow Pages and read down a list of fire protection businesses when your house catches on fire, you call the friggin' fire department, because we discovered, over 2000 years ago, that private fire companies had a bad habit of going out and setting fires in order to drum up business for themselves.
The latest case of the Free Market Fairy being a predator is for-profit trade schools that are ripping off their students and teaching useless skills that qualify their customers only for jobs as dishwashers and busboys. "It can't happen!" shout the supporters of the Free Market Fairy. "Trade schools that didn't teach useful skills would go out of business!" Well, yes. And open up again under a new name in some other location to find some new generation of students suckers to rip off. The deal is that young people are, well, young. They don't have the expertise to evaluate the claims that these trade schools make, or the quality of the instruction that is being received there. It is the perfect storm scenario for ripping people off -- when you're selling a product where it will be years later before you know whether the product worked or not, it's simply impossible for the customer to evaluate the quality of the product. That is more than enough incentive for scammers to place products on the marketplace which purport to be high quality, but in fact are just a path to a $10/hour job as a dishwasher.
Markets are a tool, a tool for allowing supply and demand to adjust towards equilibrium for commodities and services, nothing more. There's nothing magical about them, and their stable-state outcomes, like with any neural network comprised of stupid neurons, depend upon the rules we set them up with. If you try to set up a market with no rules, the way the Free Market Fairy advocates do, what you get instead is the rules of the jungle: Predatory behavior. It is time for us to grow up as a people and realize that the Free Market Fairy is a grumpy tranny whose day job is kneecapping people for the Mob (or our ruling top 400 oligarchs who own more of America than the bottom 51% of Americans combined, whatever, same difference) and who would sooner whack you over the head with her (his?) magic wand than actually do anything for mere mortals like you and I. Folks need to look past the pretty costume and realize that, uhm, hey, this Free Market Fairy is pretty dadburned brutal, and certainly nothing that is going to result in anything good for ordinary people like you or I.
-- Badtux the Economics Penguin
Man, we got totally scooped on the Free Market Fairy idea.
ReplyDeleteI am SO bummed.
Drat!
jXb
No one really understands the free market bullshit. Least of all you.
ReplyDeleteNot to mention that when they say free market what they mean is free market for everyone else, and for them import tariffs on competitors, tax breaks and anti-trust exemptions.
ReplyDeleteIn Australia, the trade school scam is to pose as a real source of education, con overseas students (usually from India) in to pay high fees, and (wink-wink, nudge-nudge) promise that the kids can get an immigration visa out of it. So many schools, so many schemes...
ReplyDeleteDishwashers make $10 an hour? Where?
ReplyDeleteAnyway, we can thank the banksters for the continued looting in the name of "free trade." What a joke that term is and ALWAYS HAS BEEN in this country.
In Washington State, the minimum wage is $8.55 per hour. So if you have experience (hah!), yes, it's possible for a dishwasher to make $10/hour in Washington State. Of course, if you have $40,000 worth of debt to pay off -- and no way to discharge it through bankruptcy -- good luck making a living that way...
ReplyDelete- Badtux the Wage Penguin
Well, sure, just like democracy, free markets suck, but when Men of System try to improve on them with their grandiose designs, their ideas always prove to be worse. Sure, *parts* of their ideas are good, but other parts are really really bad and outweigh the good.
ReplyDeleteAnd unless you have a Maxwell's Daemon which can keep out the bad ideas while hemming in the good ideas, you've got to take the bad with the good. Certainly free markets don't have any such filter, and it's obvious that nobody else's designs include such a filter.
Russ, the question is not whether markets are useful or not, but, rather, the rules under which they are set up. If they are rules which punish fraud and reward fair dealing, what you will get is a market which accomplishes its purpose, which is to maximize the match between supply and demand of commodities and services and thereby maximize the efficiency and prosperity of the economy. If you attempt to create a "free market", one with *no* rules, what you end up doing is actually creating rules which REWARD fraud and PUNISH fair dealing. This is because anarchy inherently rewards those who are most vicious and violent, which is why no society -- anywhere -- which adopts anarchy as its system of (non)-government functions in any reasonable manner.
ReplyDeleteIt is the difference between realistic thinking and magical thinking. You apparently think the rules of the market simply appear out of nowhere, like magic. They don't. If you don't set rules, the rules of the jungle happen. There is a *REASON* why this nation's period of greatest economic growth was the decades between 1945 and 1980, when our markets were highly regulated to make sure they were fair and fraud-free, and that reason is that markets do not regulate themselves, despite your wishful belief in a Free Market Fairy that, via waving her (his) magic wand, somehow via the Magic of the Market makes fraud, violence, and unfair dealing go away. So why, then, are our young people being ripped off by these unregulated trade schools? It seems to me that your Free Market Fairy isn't doing so hot there, eh?
- Badtux the Pragmatic Penguin
I completely grant your point, that free markets suck. You are right. No question about it. Only a fool would say otherwise.
ReplyDeleteTrouble is that any other organization of trade sucks more. You can either have a market regulated by the customers (which I grant does not work well) or you can have it regulated by politicians (which I suggest works even less well).
And yes, you can point to areas where politicians have been lucky. I can point to areas where they weren't -- and in a big way (e.g. the Great Depression or the current Great Recession).
I don't believe that regulation appears from nothing. Regulation appears from the behavior of customers. Is it always perfect? No. Can you point to places where it has failed? Sure. I totally totally always give you the point that you can find failures of free markets.
I don't believe in a Free Market Fairy. Neither do I believe that you have a Maxwell's Daemon which allows politicians to regulate better on average than customers.
See, the thing is, is that free markets are *always* the correct choice for the future. The problem is that people can't see the future. They look at the past, and they see places where free markets have failed, e.g. "Knee-capping the young". They can see places where regulation has succeeded. And they think "let's use regulation to eliminate those failures". But the problem is that they're trying to optimize the past. The future will be different, by virtue of their attempt to manipulate it.
People aren't chess-pieces, to be pushed around on a board. They have their own ideas about how to run their lives, and any attempt to change them is going to run into a morass.
So explain, then, why the greatest period of economic growth for ordinary Americans in American history was the period 1945-1980 when the American economy had well regulated markets?
ReplyDeleteYou can't. The problem is that you are reciting religious cant that has no support in reality. First of all, this is a democracy. You talk about "the government" as if it's some alien dictatorship imposed upon us by vicious and venal people. It is not. The government is *US*, and government regulation in a democracy is us, We The People, deciding on the rules via which we want markets to be organized via the representatives that we elect to represent our best interests.
Secondly, your proposition denies the simple reality that the periods of greatest improvement in the living conditions and incomes of ordinary Americans HAVE BEEN THOSE TIMES WHEN MARKETS WERE WELL REGULATED. When we started deregulating in the late 70's/early 80's, income growth for average Americans slowed dramatically, and over the past ten years of massive deregulation the income of the average American actually fell. THESE ARE FACTS. These are not subject to argument. If you want to argue that unicorns are pink and cotton candy grows on trees, you are arguing stupidity and see my posting rules.
- Badtux the Reality-based Penguin
Reminds me of "Little bunny foo foo" only the good fairy turn him into a republican.:-)
ReplyDeleteSeriously though in the late sixties and early seventies was when we started to ship our jobs overseas. How can we expect to compete when overseas labor is making $5 a day? And we give tax breaks for companies to that do it.
ReplyDeleteSo unfortunately corporations took over our government. That's why nothing gets done that benefits the little guy. No public option. No real credit card reform. No bank reform. Shall I continue?
One point I will make is that EVERY SINGLE ONE OF THOSE CONGRESSMEN IS THERE BECAUSE PEOPLE VOTED FOR HIM. We are still getting the government we want -- and deserve -- when we vote these cretins into office. Otherwise someone else would get voted in -- at least in my state, there's usually a dozen candidates on the ballot for any public office.
ReplyDelete