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I’m sorry, but I don’t think you even understand what a “free market” is. A free market is people making decisions.

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Oh, so having said the free market does not make decisions people do, I am told I don't understand the free market because the free market is people making decisions. So much obfuscation; so little time.

So why don't we dispense with the mythical creation of the "free market" and just speak about the market which means people meeting to exchange goods or services. The "free" part is merely ideological baggage intended to add some sort of religious meaning.

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I think you earlier criticized, as an example, the “stupidity” of putting lotion in facial tissues.

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No, I didn't.

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Why are tissues like that produced? Because thousands and thousands of people like me see the product offered and want it for the benefits it gives us.

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bureaucrats deciding that is best for “the people” and very little of those things would exist.

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You may want to live in a world like that, but most people (thankfully) do not.

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If you say so.

[ 26 June 2006: Message edited by: Frustrated Mess ]

quote:

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having said the free market does not make decisions people do, I am told I don't understand the free market because the free market is people making decisions.

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The most important fact about a free market is that those without money are excluded entirely from its operation.

The second most important fact is that its decisions are not made by "people", but by "people-with-money". That may seem like a quibble, but it is important.

I still haven’t seen any convincing arguments indicating that a large group of socialists/left wingers, or anyone, can manage resources better than “the market” can. If we’re talking about small groups of people managing resources for a limited number of people, that I can see as convincing. By small, I mean a community of 100 people managing their resources for their own benefit; not 100 people managing resources for the benefit of 1000, or 100,000 people. And the “basket” of resources being managed has to be small enough to not become overwhelming or impractical.

The other thing that no one has really highlighted in this whole inadequacy of the free market debate (that carried over from another forum) is the fact that some “goods” are public goods (used by everyone and for the benefit of everyone) and some goods are market goods. Air Jordan shoes, for instance, aren’t a public good, but in Canada at least, health care is, as is public infrastructure or municipal parks. Somehow I don’t think tissues with lotion (which I have purchased and tried) are the best example of market inadequacies; we may as well talk about ambiguous widgets if we’re going to discuss something as trivial as tissues with lotion. That being said, if I want to spend $1.00 more per box of tissues so I can have tissues with lotion...why is it ok for some “group” (e.g. benevolent babblers) to say I can’t?

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Also, you kind of picked a loaded issue to illustrate deficiencies in the market. There aren't a great many people (in Canada at least) who would argue against equitable access to required pharmaceuticals.

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I was providing an example of the reality that a "pure market" actually functions within a given distribution of wealth. Since the only currency in a modern market is money, a market is simply as just, or unjust, as the surrounding society.

A market will produce goods for which purchasing power exists. People without money may want many things, but the market won't produce them, because there is no "demand".

It is an entirely different question as to whether some other form of distribution would be better. But unless you are aware of precisely what the market is, and who is excluded from its decisions concerning what to produce, you won't be able to judge whether it is efficient, or inefficient.

In many third world countries, the market produces luxury goods, but not basics. In Canada, the market produces housing, but not low-income housing. It is important to understand why.

quote:

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Originally posted by Stephen Gordon:
That's a distribution issue, not one of the efficiency of market outcomes. Why not simply transfer income to low-income households and then let them spend it in the market?

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I just wanted to point out that our Mr Gordon did type this with his own little fingers.

So Stephen, may I ask what you think about current social assistance levels for the lowest income Canadian's ?. I believe that even the Vancouver right-wing make believe think tank, the Fraser Inst., suggests that these incomes should actually be higher than what they are now on average.

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Fidel is right from his side when he says that he prefers a system like Cuba where nobody (allegedly) lives in abject poverty and everybody (allegedly) has access to basic needs like health care and education.

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You were out of order on the other thread, accusing UNICEF, WHO, Fidel and 29 other countries with socialised medicine of a conspiracy to make U.S.ian privatized health care look bad wrt to infant mortality. And then you seemed unaware of the significance for even measuring infant mortality - it's a commonly referred to statistic and yard stick used to indicate successful or failing nation states.

Have a good hard look around Central America and the rest of the democratic capitalist third world for the same instead of "GDP" and how much of the natural wealth is being carted-off by foreign based multinationals. Have a good look at Haiti just 50 miles away from Cuba. I dare you to leaf through some travel brochures and actually go to that island - see first-hand the country that Washington describes as the "freest trading nation in the Carribe." Go and observe the poorest people in the western hemisphere, and don't bother visiting Cuba, because I don't think you're wide enough to absorb it all, I really don't.

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Go and observe the poorest people in the western hemisphere, and don't bother visiting Cuba, because I don't think you're wide enough to absorb it all, I really don't.

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And I don't think you can make a post without making dimwitted insulting statements.

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I gotta be me. More me less everyone else. Me me me me ME!!!

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I've already said, if you're so concerned about the poor, why don't you cancel your internet subscription and sell your computer and give the money to poor people?

And I'm sure the hours a day you spend posting on the internet could be far better used volunteering.

I think when it comes right down to it, you're as selfish as the next person. You're just far more holier-than-thou. I believe a person like that is called a hypocrite, or a phony. So, can the preachings of moral superiority.

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And I'm sure the hours a day you spend posting on the internet could be far better used volunteering.

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Actually considering the amount of free education people like Fidel is providing via rabble to those who get their news from Disneyland, I think it could safely called volunteering to the ethically challenged.

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Actually considering the amount of free education people like Fidel is providing via rabble to those who get their news from Disneyland, I think it could safely called volunteering to the ethically challenged

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Originally posted by Adam T:
Fidel, I think I understand your position clearly and have explained it. If all you can do is insult everybody then I suggest I, and everybody else here, simply ignore your rantings.

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Hint: Never use "I think" when making a claim to know something. It sounds like you're not sure.

And I really didn't mean to cause such clicking of heals and snapping of arm bands. You should don thicker skin before posting, Adam.

[ 27 June 2006: Message edited by: Fidel ]

Transnational corporations have now achieved monopoly control over numerous industries, often through joint ventures and strategic alliances with their major rivals. The power wielded by these monstrous bureaucracies dwarfs the power of most nation-states, over which they have extraordinary influence. These institutions do everything they can to eliminate risk, and they do it through planning and management every bit as byzantine as that which occurs in planned economies. A successful transnational corporation is, in fact, nothing but a planned economy. Furthermore, an enormous amount of the world's trade occurs within corporate structures--that is, among the subsidiaries of transnational corporations. This trade is completely severed from the influence of competition.

These days, small producers are typically dependent upon these corporations, eliminating their independence and making them adjuncts of the corporate machine.

The quality of products is now thoroughly obfuscated by advertising, which is designed to erode our ability to critically evaluate products and to promote conspicuous consumption.

Finally, capital is far, far more mobile than labour; while computer technology allows capital to move around the world in nanoseconds, labour is increasingly tied to fixed locations, reducing its ability to compete in the marketplace (this is what our immigration policies are all about).

In all of these ways, the free market envisioned by Adam Smith has vanished, though the myth lingers on.

For those who are interested, a good book on this subject is Murray Dobbin's The Myth of the Good Corporate Citizen (1998).

[ 27 June 2006: Message edited by: Michael Nenonen ]

quote:

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Originally posted by Michael Nenonen:
Finally, capital is far, far more mobile than labour; while computer technology allows capital to move around the world in nanoseconds, labour is increasingly tied to fixed locations, reducing its ability to compete in the marketplace (this is what our immigration policies are all about).

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Linda McQuaig mentions this - that governments and policy makers point to the fact that technology makes it possible for money to cross borders in an instant and leaving governments impotent to regulate and tax profits made in a given country. But Linda makes an interesting point about that claim.

If technology can be used to avoid government regulations, then why can't the same technology be used to enforce them?. Governments in both the U.S. and Canada have no problem with passing invasive federal wiretap laws with the aim of fighting international terrorism.

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The problem with the free market is that it simply doesn't exist. According to classical liberal theory (ie, the work of Adam Smith), a free market requires the absence of monopolies, a multitude of competing small producers, transparency regarding the quality of their wares, relatively immobile capital, and highly mobile labour. None of these conditions apply today.

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Exactly. Thank you.

Jeff, when I mentioned "the market" in my initial post, I didn't go into detail, but my argument would be that "the market" exists independent of ideology.

The market predates capitalism and Adam Smith and it will survive the passing of both. The market is a normal, human activity.

In the modern sense, you are absolutley correct. But really, the market can simply mean bartering.

The left has allowed the right to monopolize the meaning of a word to the extent that some might believe there would be no market, no exchange, no barter, without capitalism.

In fact, the "free market" does not exist. Many aspects of the market from securities trading to interest rates to exchange rates are highly regulated. Proponents of the free market most often demand deregulation of consumer, labour, and environmental protections. They often favour regulations that raise the cost of entry into the market place and/or act to restrict competition.

When I talk about free markets, I am generally referring to a mixed economy whereas the govenment sets up rules and boundaries and then allows indivduals to work freely within those boundaries in order to bring goods and services to the public.

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Originally posted by Brian White:
Just pasteing the stuff from the guy below.
It is excellent and cuts to the heart of the system in force right here right now. The "not free market that pretends to be the free market" that people defend like a religion, because it sounds good and cannot be improved!
to my mind monopolys are an end result of competition in a free market. And monopolys (that kill off variety in the market) need to be culled somehow every few years to allow vigorous new industry to grow to replace them.
Brian

Michael Nenonen
recent-rabble-rouser
Babbler # 6680
posted 27 June 2006 07:20 PM
The problem with the free market is that it simply doesn't exist. According to classical liberal theory (ie, the work of Adam Smith), a free market requires the absence of monopolies, a multitude of competing small producers, transparency regarding the quality of their wares, relatively immobile capital, and highly mobile labour. None of these conditions apply today.

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I think the Beer market is an example of a free market.

There are no monopolies.

There are a multitude of competing producers (Molson, Moosehead, Coors, Labatts, Big Rock, Grasshopper etc.) I don't see why the producers all having to be small is relevant.

There is transparency in the quality of their wares, just have a taste.

fidel-- don't you dare sell your computer-- some of us are getting a good education from your postings--we probably wouldn't hear it in the globe.

there is no free market-- it's a lying term

there is corporatism and greed and insidious rationalization for crummy behavior globally in the name of the new false god 'free trade'

it doesn't matter what sacrifices that the globe makes to this god-- it's a lie and has always been a lie

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Transnational corporations have now achieved monopoly control over numerous industries, often through joint ventures and strategic alliances with their major rivals.

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Maybe I just have a terrible memory, but the only industry I can think of controlled by a monopoly or a monopoly cartel is the diamond industry and possibly the personal computer operating system sector(actually very highly debatable). This exludes publicly regulated utilities, of course.

Name 5 industries or industrial sectors controlled by monopolies or monopoly cartels.

[ 28 June 2006: Message edited by: Adam T ]

[ 28 June 2006: Message edited by: Adam T ]

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Does it take a total monopoly to diminish choice enough to matter?

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If you're asking me, Michael Nenonen was discussing the influence a monopoly or a monopoly cartel has over a market, he was not referring to the amount of choice available.

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Originally posted by bittersweet:
I was referring to the topic of the thread. The influence of restricting supply due to decreased competition, includes, I would think, restricted choice, depending on your values. I also think the effect of intentional decreases in competition due to companies buying companies is worth more scrutiny than competition decreasing due to production costs and other accidents.

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Competition is a very good thing for consumers. If there was only one maker of photocopiers (or of virtually any other thing), why innovate? You have a captive market. If your copier poots out three pages a minute, why spend the money developing a copier that produces sixty pages a minute (or more) but maintains the same quality of copies? There would be zero incentive to do so. That principle would apply in spades if that monopoly was the government.

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Originally posted by bittersweet:
From the looks of it, our points of view are not fundamentally in competition. Yet, oddly, I am still compelled to innovate. Perhaps an economist could explain this to me.

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From the looks of it, our points of view are not fundamentally in competition. Yet, oddly, I am still compelled to innovate. Perhaps an economist could explain this to me.

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I don't disgree with you on that. Humans seem bent on inovation no matter the incentive or lack thereof. The problem is that in a command economy, there is no incentive in the system to promote inovation except in areas the leaders want it.

This case in all communist countries has been that leaders have pushed innovation in areas of 'public enterprise': i.e health care and the like. I'm not one to say there aren't some good things that come out of communist countries. But, if you check the record of most communist countries, the leaders tend to snear at consumer items. They often refer to them as 'bourgous' and other such nonsense.

This likely wouldn't be a problem if communist economies were successful. If they were, they could trade in areas where they specialized (especially in areas where the capitalist system hasn't been producing great results recently like pharmaceuticals) for consumer goods.

The problem with that is, if you look at the GDP of, say, Cuba, and compared it to other Central American/South American/Carribean countries, Cuba has the 3rd lowest GDP. So, clearly, as economic theory suggests would happen, the enforced equality of the communist Cuban system has either reduced the incentive to work, or has some other major flaw in it. The upshot is that Cuba simply doesn't have much to trade with.

[ 28 June 2006: Message edited by: Adam T ]

Maybe I just have a terrible memory, but the only industry I can think of controlled by a monopoly or a monopoly cartel is the diamond industry and possibly the personal computer operating system sector(actually very highly debatable). This exludes publicly regulated utilities, of course.

Name 5 industries or industrial sectors controlled by monopolies or monopoly cartels."

I'm sorry for taking so long to reply. I don't have much time to spend on the computer.

In response to your question, I'm going to quote Murray Dobbin (The Myth of the Good Corporate Citizen):

"When just five firms control more than half of the global market, economists consider that market to be highly monopolistic. The Economist recently listed twelve industrial sectors that demonstrate this highly monopolistic pattern. In consumer durables, the top five corporations control 70% of the global market; in the automotive, airline, aerospace, electronic components, electrical/electronics, and steel sector, the top five control more than 50%. Other sectors show equally strong monopolistic tendencies, including oil, personal computers, and media, where control of more than 40% of the respective world markets rests with five or fewer corporations."

I should point out that other economists consider a market to be monopolistic when eight firms control over 50% of a market.

Collusion among transnational corporations reinforces these monopolistic tendencies. Dobbin quotes David Korten (When Corporations Rule the World): "(Transnational corporations share) access to special expertise, technology, production facilities, and markets; spread the costs and risks of research and new product development; and manage the competitive relationships with their major rivals."

For example, when Dobbin was writing in 1998, Chrysler owned parts of Mitsubishi, Maserati, and Fiat. Ford owned 25% of Mazda. GM had a 37.5% stake in Isuzu.

In addition to these monopolistic markets we must add the effects of managed trade within corporate networks (among parent companies and subsidiaries), where competition is non-existent.

Laws intended to discipline corporations for undermining competition are only as good as their enforcement. In core nations, corporations exert great influence over watchdog agencies (turning them into lapdog agencies through sharing of personnel, etc) and over legislators. The resources devoted to investigation and prosecution of such offences are thoroughly inadequate, and even successful prosecution results in penalties that transnationals can easily shoulder. In peripheral and semi-peripheral nations even these paltry measures are non-existent.

Even if we only look at monopolistic practices and ignore the effects of advertising, capital mobility, and labour immobility, the current situation measures simply doesn't measure up to the standards required for a free market outlined by Adam Smith in The Wealth of Nations, or by the school of classical liberal thought that was built upon his work.

[ 28 June 2006: Message edited by: Michael Nenonen ]

quote:

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Originally posted by Adam T:
Name 5 industries or industrial sectors controlled by monopolies or monopoly cartels.

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In the 1980's, Bernie Ghert of Cadillac Fairview Corp. was quoted as saying, "there will be six groups running the country."

There are essentially 32 billionaire families and five conglomerates who have a virtual stranglehold on Canadian assets. Through owning our railways, controlling interest in banks and companies owning majority shares in our mineral, oil and forestry wealth, to the shopping malls that rent floor space to major grocery chains - our cost of living is controlled by a very small minority of people known by us working class slobs as "the market."

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We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both. - U.S. justice Louis D. Brandeis

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WE LIVE IN A culture of choice. But, in an age of corporate dominance, our freedom to choose has taken on new meaning. Upset with your local big box store? Object to unfair hiring practices at your neighbourhood fast food restaurant? Want to protest the opening of that new multinational coffeeshop? Vote with your feet!

What if it’s not that simple?

In No One Makes You Shop at Wal-Mart, Tom Slee unpacks the implications of our fervent belief in the power of choice. Pointing out that individual choice has become the lynchpin of a neoconservative corporate ideology he calls MarketThink, he urges us to re-examine our assumptions. Slee makes use of game theory to argue that individual choice is not inherently bad. Nor is it the societal fix-all that our corporations and governments claim it is. A spirited treatise, this book will make you think about choice in a whole new way.

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I should point out that other economists consider a market to be monopolistic when eight firms control over 50% of a market

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What economists say that? I believe industries in those situations are referred to as oligopolies.

There are plusses and minuses to oligopolistic markets but lack of competitive practices between the companies is often not one of them. The advertising many here decry between Coke and Pepsi is proof of that. I agree with you though that we don't hear much about the downsides from the cheerleading media.

The E.U Competition Policy commissioners seems to be more determined than their American counterparts to prevent corporate concentration.

[ 29 June 2006: Message edited by: Adam T ]

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Originally posted by Rambler:
Maybe I'm crazy but to me both an entirely free, completely unregulated economy, and a economy totally governed from the top down are both batshit insane ideas.

When I talk about free markets, I am generally referring to a mixed economy whereas the govenment sets up rules and boundaries and then allows indivduals to work freely within those boundaries in order to bring goods and services to the public.

This model is far and away the best at providing choice, and efficiency as far as I can tell.

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Rambler says it well. A free market will be oppresive, if there aren't laws and regulations to protect contracts, the environment, worker rights, etc. A free market means that you can start an organic co-op or buy crap from mcdonalds. It means that you can make your own decisions of what types of companies to support, work for or open. I will always prefer that to a "here is your job, here are your products" kind of statement from a government monopoly. (especially the type of government that Fidel approves us, which can't be removed democratically every few years)

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Originally posted by EmmaG:
Fidel, monopolies exist when it is against the law for another company to offer a product or service. This is usually the case in communist dictatorships.

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Yes, that's a planned economy. And so is ours a planned economy with a handful of multinational corporations and their top-down hierarchical structures controlling large sectors of our economy. Capitalists don't believe in invisible hands anymore, and communists never did.

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For example the Atlantic provinces used to only have one phone company each. The laws were changed and now we have a few different companies to choose from.

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Originally posted by EmmaG:

It means that you can make your own decisions of what types of companies to support, work for or open. I will always prefer that to a "here is your job, here are your products" kind of statement from a government monopoly. (especially the type of government that Fidel approves us, which can't be removed democratically every few years)

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That's just it, we don't remove anything every four years. The two old line parties are one in the same corporate and banking-friendly plutocrats decade after decade. The Libranos were considered autocratic in the 1940's and have ruled Canada for 70 of the last 100 years. That's longer than Castro show of real leadership in Cuba since 1959. The difference between Fidel and any of the U.S.-backed dictators is that there are no WMD and no military brutalizing the Cuban people. We all know that if that were true of the situation in Cuba, then, as Marlon Brando once put it, "The U.S. military would make a parking lot out of Havana in eight seconds flat." All kinds of right-wing crazies make absurd accusations against Castro's Cuba, and the CIA would dearly love for it all to be true. They really would. Instead, the WHO and UN report lower infant mortality in Cuba than for their cold war nemesis, the U.S. of A.

Political Conservatives ruled Ontario for 42 consecutive years during the best cold war economies this hemisphere has ever known and still rang up the first $40 billion dollars of our provincial debt.

Democracy is an illusion, Emma. It's been one bloody struggle for something resembling democracy since time immemorial. But no, neither country in N. America has any business telling Cuban's that they need our parliamentary multi-party democracy. They have multi-party democratic capitalism in Haiti and Dominincan R. and Guatemala and El Salvador.

What do you know about any of those countries, Emma ?. Some of these banana republics are just a few days drive from Texas and trade freely with Uncle Sam, and our own politicos have shaken hands with and attended cocktail parties with some of the most brutal right-wing dictators ever propped up by Washington. Most of these former cosmetic leaders in Latin America have committed genocide and mass murder of socialists, union leaders, peasant farmers, indigenous people, women and children. And millions of Latinos who don't fight for their rights are rewarded with living their lives in abject poverty and political oppression. Is that what you want for Cuban's?.

[ 29 June 2006: Message edited by: Fidel ]

quote:

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Originally posted by Adam T:

What economists say that? I believe industries in those situations are referred to as oligopolies.

There are plusses and minuses to oligopolistic markets but lack of competitive practices between the companies is often not one of them. The advertising many here decry between Coke and Pepsi is proof of that. I agree with you though that we don't hear much about the downsides from the cheerleading media.

The E.U Competition Policy commissioners seems to be more determined than their American counterparts to prevent corporate concentration.

[ 29 June 2006: Message edited by: Adam T ]

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Yes, when eight firms have a concentration ratio of over 50% they are considered oligopolies, but oligopolies are expressions of increasingly monopolistic power. (Do a google search on the term "eight firm concentration ratio".) Global oligopolies violate the preconditions for a free market, as defined by classical liberal theorists, every bit as much as monopolies do. Remember that a free market requires a large number of producers to function; oligopolies violate this condition.

Regarding the competition between oligopolies like Coke and Pepsi: These soft drink companies are notorious for using their economic clout to either buy out or crush smaller soft drink producers, practices that are clearly monopolistic in nature. The competition between two giant producers simply doesn't meet the standards set by classical liberal economists. And really, what kind of choice is there when two firms dominate the entire market? In the US, two political parties dominate and compete the political landscape, but there's precious little difference between them. Similarly, there's precious little difference between the products offered by Coke and Pepsi. This would not be the case if the industry was divided into numerous, smaller producers.

In addition, as I pointed out in my previous post, rival firms typically collude with one another on all manner of things, right down to owning significant portions of each other's stock. This undermines the notion that the competition among them compares at all to the competition that occurs when numerous small producers are competing with one another.

As I said before, when these sorts of monopolistic practices are combined with the effects of advertising, capital mobility, labour immobility, managed trade among transnational corporations and their subsidiaries, and the influence transnational corporations wield over governments, the free market idealized by Adam Smith and his descendents ceases to exist.

[ 30 June 2006: Message edited by: Michael Nenonen ]

"Concentration ratios only provide an indication of the oligopolistic nature of an industry and suggest the degree of competition. However, it does not provide a lot of detail about competitiveness of the industry."

There are actually 3 major companies in soft drinks: coke, pepsi and shweppes, for what that's worth.

I don't pretend to be expert enough to detail the upsides and downsides of oligolopostic markets to be able to refute or concur with what you say or to determine whether they really do negate Adam Smith's theories.

The only thing I would comment on is that John Nash and game theory would tend to disagree with you on the amount of collusion that exists in ologolopistic markets.

[ 30 June 2006: Message edited by: Adam T ]

[ 30 June 2006: Message edited by: Michael Nenonen ]

"I don't pretend to be expert enough to detail the upsides and downsides of oligolopostic markets to be able to refute or concur with what you say or to determine whether they really do negate Adam Smith's theories."

After reviewing some of my source material, I'm reminded that I'm hardly an expert myself.

In my previous post I argued that classical liberalism requires the following conditions:

A large number of producers, perfect information about their products, capital immobility, and labour mobility.

In fact, in a number of areas I've confused the conditions under which Smith's classical liberal theory was formed (and which he assumed in his writing) and the actual preconditions for the theory. I'd like to correct these errors.

Labbour mobility and capital immobility do not seem to be features of Smith's explicit model; instead, they're conditions that were present in Smith's time and that were tacitly assumed by the model. I still maintain that when this situation is reversed, labour becomes a captive and easily exploited market, violating the conditions of a perfectly competitive free market.

Having said this, let's consider the preconditions for perfect competition outlined in Manuel Valasquez's book, Business Ethics: Concepts and Cases (1982)(this is a rather standard textbook on the subject, and makes use of widely accepted principles of classical liberal theory). Valasquez writes that:

"A perfectly competitive free market is one in which no buyer or seller has the power to significantly affect the prices at which goods are being exchanged. Perfectly competitive free markets are characterized by the following seven features:

1: There are numerous buyers and sellers, none of whom has a substantial share of the market.
2: All buyers and sellers can freely and immediatley leave the market.
3: Every buyer and seller has full and perfect knowledge of what every other buyer and seller is doing, including knowledge of the prices, quantities, and quality of all goods being bought and sold.
4: The goods being sold in the market are so similar to each other that no one cares from whom each buys or sells.
5: The costs and benefits of producing or using the goods being exchanged are borne entirely by those buying or selling the goods and not by any other external parties.
6: All buyers and sellers are utility maximizers: each tries to get as much as possible for as little as possible.
7: No external parties (such as the government) regulate the price, quantity, or quality of any of the goods being bought and sold in the market."

When we look at these criteria, we can see that our current system does not resemble a perfectly competitive free market at all.

Condition 1 is violated by monopolistic practices like the ones I've described previously. Surely any market in which 50% of the market is dominated by 8 or fewer transnational firms fails to meet this criteria.

Condition 2 is violated by the way that transnational corporations form deals with governments for exclusive access and privileges within specified regions, and which then make use of legislation, police, and military force to eliminate smaller competitors, as often happens in developing countries. (Come to think of it, this condition could be violated by the existence of captive labour markets created by extreme capital mobility coupled with labour immobility enforced through strict immigration laws.)

Condition 3 is violated by advertising, which uses profoundly powerful techniques of psychological manipulation to override consumers' critical faculties and to encourage conspicuous consumption.

Condition 4 often appears to be upheld--but, of course, it undermines the claim made by free market apologists that the free market encourages a diversity of choice.

Condition 5 is violated by the way that the products and services produced by industries often have significant consequences upon "external parties". The energy industry's contribution to climate change is a case in point.

Condition 6 is violated by advertising, which seeks to override purely utilitarian deliberation with compulsive and conspicuous consumption.

Condition 7 is violated by the necessity of government regulation to ensure public safety, as well as by government intervention in support of industries through tax breaks, subsidies, purchase of industry products, etc. It's also compromised by the enmeshment of political and business institutions--Cheney's relationship with Haliburton is a case in point. The extraordinary influence transnational corporations exert over national governments clearly undermines this condition, as it ensures that governments will pass legislation and make policies favourable to specific transnational corporations (such as going to war to fill the coffers of military contracters and to open up markets for corporate penetration)

This is important, because the highly-trumpeted ethical virtues of free markets depend upon the presence of each of these seven factors. Velasquez writes:

"...perfectly competitive free markets incorporate forces that drive all buyers and sellers toward the so-called 'point of equilibrium.' In doing so they achieve three major moral values: (1) they lead buyers and sellers to exchange their goods in a way that is perfectly just (in a certain sense of 'just'), (2) they maximize the utility of buyers and sellers by leading them to allocate, use, and distribute their goods with perfect efficiency, and (3) they bring about these achievements in a way that respects buyers' and sellers' right of free consent. As we examine each of these moral achievements, it is important to keep in mind that they are characteristics only of the perfectly competitive free market, that is, of markets that have the seven features we listed above. Markets which fail to have one or the other of these features do not necessarily achieve these three moral values."

Given that the current situation seriously undermines nearly all of these conditions, then it calls into serious question the ethical foundations upon which modern capitalism supposedly stands.

Anyway, I do apologize for the mistakes I made in my previous postings, and I hope this post goes some distance towards remedying them.

[ 30 June 2006: Message edited by: Michael Nenonen ]

But even closed experiments in unbridled capitalism have failed miserably since it did in 1929 across the western world, and again in 1980's Chile and Argentina. There was no dead hand of government bureaucracy or trade unions or socialist opposition to their doomed experiment in laissez-faire socialism for the rich.

And yet as Nobel laureate in economics, Amartya Sen summarized: The global exeriment in democratic capitalism, from just the years 1947 to 1979, has resulted in the premature deaths of approximately one billion human beings. They have died of the capitalist economic long run. And anywhere between four and thirteen million children continue to starve to death or die of treatable diseases across the capitalist third world each and every year. Where is the free market choice in starving to death or dying of diarrhea?.

80 percent of chronically hungry nations are exporting cash crops to "the market." During his UN acceptance speech of an award for improving health in Cuba as well as delivery of free medical and humanitarian aid to the rest of Latin America, Fidel Castro said:

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If the cure for AIDS in Africa was a glass of clean water, millions would still die.

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Liberal democracy is a fairy tale, and democratic capitalism has been a monumental failure for billions of people.

[ 30 June 2006: Message edited by: Fidel ]

The four basic types of market models are:
A.largely hypothetical extremes
1.perfect competition
2.monopoly

B.largely the real forms of markets that exist today
3.monopolistic competition
This is a form of a market where there are lots of suppliers in the market, but each firm tries to differentiate their products, largely through advertising, to convince the public that they have a unique product, and therefore a monopoly over what they sell. Software designers probably fit into this. Chocolate bars are probably the perfect example.

4.Oligopoly
Only a few, usually large, firms dominate the industry.
Apparently oligopolies can be further divided into 3 or 4 different types, but I haven't studied any of that yet.

Monopolies can also be subdivided based on the nature of the monopoly. If a firm has a monopoly due to a patent, for instance, that is one type of monopoly.

[ 01 July 2006: Message edited by: Adam T ]

`When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.' -- Lewis Carroll, "Through the Looking Glass"

We have to call it ‘freedom’: who'd want to die for ‘a lesser tyranny’? -- Mignon McLaughlin, The Neurotic's Notebook, 1960

...whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. -- Declaration of Independence

Liberty doesn't work as well in practice as it does in speeches. -- Will Rogers

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First of all, given that it’s demonstrably illegal to buy and sell marijuana (and many other potential money making products), using the word ‘free’ in conjunction with ‘market’ can only be bullshit.

Therefore, based on current usage, for the word ‘free’ to have a consistent ‘constitutional’ meaning, it would have to be purely subjective as in: ‘The politicians are ‘free’ to write and enforce laws as they so choose.’ For example, certain politicians must believe that being an imperialist and/or a slave owners is part of certain peoples’ ‘freedom.’

Secondly, the universal meaning of freedom must be: ‘The ability of an agent to act or not to act according to her or his dictates’ (Peter Angeles, "Dictionary of Philosophy"). In this regard, the only way that imperialists and/or slave-owners can act freely is for their governments to write laws that guaranteed their freedom to act.

Thirdly, no economist today is saying that ‘economic agents’ should be free to do buy and sell whatever they ‘dictate.’ So why don’t the ‘scientists’ (namely, the economists) name 'economics' as a ‘limited’ human activity? The answer is that if economics is not based on ‘universal scientific laws’ that ‘freely’ apply to everyone then it is based on ‘individual laws’ made up by particular ‘scientists’ in their own economic self-interest and that of the people who give them money.

In baseball it is three strikes and you’re supposed to be out. However, despite the obvious fact that ‘economics’ is a win or lose game where the umpires (the economists) are being ‘given’ money (a free lunch) to make up the laws, many people persist in using the word ‘free’ as in the ‘free market.’

In Venezuela, selling fruit and fruit juice and cups of coffee on street corners and road sides is common place. If you've got the desire and initiative to do it, then no one's going to stop you. They've never heard of the Mike Harris and his uncommon nonsense revolutionaries.

Too, if you've got the desire to build a house in Venezuela and are tired of being homeless, no problemo. The government will provide you with the materials to build a house. They'll even deliver the stuff to your new homestead. Mind you, it won't be a fabulous ranch, and you may have green and white PVC pipes running water and sewage to and from your new abode, but it's functional. What the hell have we got for a national god damned housing program in this Puerto Rico?. We're swimming in an ocean of lumber, and we've got god damned homeless Canadians in middle of fricking February! We need a god damned revolution in this icehole of a U.S. colony!@

Does the orange juice that is being sold contain impurities? Is it watered down? What sorts of chemicals were used to produce the oranges themselves?

Is the electrical system in the houses safe for the load which it is going to bear? Are fireproof materials used in kitchen areas? Do the new houses abut others, or is there space between houses to insure a conflagration doesn't destroy the entire community?

Of course, these are questions which arise only when the direst poverty has been overcome; electricity standards are not necessary where there is no electricity.

[ 03 July 2006: Message edited by: Fidel ]

There is a country in Latin America in which just this sort of thing was a criminal offence, punishable by jail terms, for many years. In that country, the only employer was the state.

After the USSR disappeared, that country liberalized the rules somewhat. After that, private enterprise was allowed for those who held a licence from the state. In order to get such a licence, the applicant had to have a certificate that he was "a good revolutionary".

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Originally posted by jeff house:
It is odd to find Fidel arguing in favour of this sort of private enterprise for the poor.

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Jeff, capitalists can't take credit for inventing trade. People have been trading and selling for millenia.

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There is a country in Latin America in which just this sort of thing was a criminal offence, punishable by jail terms, for many years. In that country, the only employer was the state.

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You're mistaken. It was illegal for government officials to have a personal hand and profit interest in any government transactions and enterprise. IOW's, Canada's Libranos would have been lined up at dawn, or perhaps provided a leaky boat and told to shove-off for Miami with the rest of the expatriated Cuban mafia. The so-called freedoms talked about by cold war propagandists were very often not the same freedoms that any of us average working class slobs in the west are denied today.

We've actually spent trillions of taxpayer dollars in North America for the freedom of oligarchs to plunder and pillage and monopolize under the guise of more noble terms than our own elitists ever admitted to, like "free enterprise" and freedom itself. They call it freedom when themselves are free, Jeff, not you and me or the homeless kid who's been told by the cops to put down their squeegy's and go back to couch surfing and the shadows of the city.

Cuban's are free to sell fruit and vegetables to the world, Jeff. Canadians are doing business in Cuba as we speak. And American companies continue to flout inane Helms-Burton cold war shinola in increasing numbers. The Cuban economy is growing at a clip better than our own, Jeff.

ETA: And since glasnost, poverty exploded by 3000 percent in Russia, life expectancy plummeted, and oligarchs took possession of the natural wealth. Castro's socialism in Cuba is a spectacular success by comparison.

ETA2: Jeff, what choice of employment did Cuban's have during the U.S.-backed Batista years besides United Fruit Co., cash crop colonialism and drug running for the mafia, picking tobacco under the tropical sun from sunup to sundown?. The U.S. and Canada still have the all familiar one-industry, one-horse towns where it's their way or the highway for workers.

Batista's secret police, the mafia thugs and right wing death squads tortured and murdered thousands of communists from 1953 on while Fidel was in exile. And when Batista was overthrown, Washington cast the sonofabitch aside like a used kleenex.

Remember Che
Viva la revolucion!

[ 04 July 2006: Message edited by: Fidel ]