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It sounds like you're saying that markets should adhere to a first-year university understanding of Microeconomics 101, because that's your definition of a free

• Iv 10y ago
  State a clear criticism then, instead of vague and smug dismissal. Does my (indeed) simple model of free market misses something a more complex model shows? Decreasing prices are usually the consequence of oversupply and lead to a decrease of production. That's indeed econ 101: a free market regulates production. If you offer an insurance that proposes to shield people from such an effect, you are either lying to them or you are planning to replace this regulation by another mechanism, most likely planned production (which can actually perform better than free-market in some cases). Banks are not in the business of managing industries. They are in the business of making profits (another simplistic yet surprisingly accurate model!), so I doubt that it would turn down possible profits in order to protect an industrial field. Insurances conceived by a state, as a braking mechanism to dampen the results of market regulation, they can work. Insurances designed to generate financial profits and sold under the promise to shields agents from industry-wide effects? This is a clear step out of the land of useful financial tools that helps production.