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I thought that the “free” in “free markets” meant that corporations are free to do what they want.

ahartmetz 7y ago
Yes.
stuaxo 7y ago
That's how it's interpreted, but of course it is the opposite of a free market as it means they are free to stop new entrants into that very same market.
marvin 7y ago
Not an economist, but I rather figured it means that markets are regulated in a way that properly allows and encourages competition. No monopolies, no anti-competitive practices, no pricing or wage collusion, no regulatory capture etc. I'm sure this can be interpreted in as many ways as there are special interest groups, though. E.g, radically, labor markets in the absence of a basic income system are not really free, since employees starve and lose their homes if they do not accept the best available offer. Hence companies' competition for paid labor is not really free, and most groups have an existential threat if they do not accept the terms of the employers that are willing to employ them. There are a million aspects to this that I'm not an expert in, but many of the "free market" principles are considered in the context of contrasting a market economy vs. a planned economy.
- x86_64Ubuntu 7y ago
  Well, maybe. In common discourse, "free market" is used to downplay the need for government regulation concerning things like labor rights, pollution and anti-consumer/predatory behavior.
goatlover 7y ago
Which means Adam Smith was not a proponent of "free markets".
WalterBright 7y ago
No. Use of fraud and force is not part of a free market. A free market also requires a disinterested system of contracts and enforcement of those contracts in order to work, which is what the government is needed to provide. Free market means people can voluntarily engage in transactions without the government interfering in those transactions, such as when the government sets the price of some good.

Yes.

That's how it's interpreted, but of course it is the opposite of a free market as it means they are free to stop new entrants into that very same market.

marvin 7y ago

Not an economist, but I rather figured it means that markets are regulated in a way that properly allows and encourages competition. No monopolies, no anti-competitive practices, no pricing or wage collusion, no regulatory capture etc. I'm sure this can be interpreted in as many ways as there are special interest groups, though. E.g, radically, labor markets in the absence of a basic income system are not really free, since employees starve and lose their homes if they do not accept the best available offer. Hence companies' competition for paid labor is not really free, and most groups have an existential threat if they do not accept the terms of the employers that are willing to employ them. There are a million aspects to this that I'm not an expert in, but many of the "free market" principles are considered in the context of contrasting a market economy vs. a planned economy.

x86_64Ubuntu 7y ago
Well, maybe. In common discourse, "free market" is used to downplay the need for government regulation concerning things like labor rights, pollution and anti-consumer/predatory behavior.

goatlover 7y ago

Which means Adam Smith was not a proponent of "free markets".

WalterBright 7y ago

No. Use of fraud and force is not part of a free market. A free market also requires a disinterested system of contracts and enforcement of those contracts in order to work, which is what the government is needed to provide. Free market means people can voluntarily engage in transactions without the government interfering in those transactions, such as when the government sets the price of some good.