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Free markets will always remain the most fair system of resource allocation. Any other system requires an uninvolved power, likely a govt, to decide. Who gets

Free markets will always remain the most fair system of resource allocation. Any other system requires an uninvolved power, likely a govt, to decide. Who gets to live in the 56 Leonard PH?

ixtli 4y ago
This is the neoliberal ideology they are talking about, yes :)
kuschku 4y ago
A free market necessarily requires government involvement. A free market is industry-specific. For it to work, a company in one industry may not influence the market in a different industry, or that market won’t be free anymore. To prevent this, government involvement is required to ensure fair start conditions for all companies within of the free market
- cameronh90 4y ago
  While a free market economy requires government involvement, one must admit it requires less than an economy that tries to ensure equality. I also suspect the more you leave an economy to its own devices, the more unequal it becomes.
- maxerickson 4y ago
  This is incoherent, industrial categories are a convenience, not a natural component of economic activity. Is automation an industry? Because an automation innovator might be built on the assumption that it can influence another industry. Can a manufacturer of one thing decide that they have the internal capacity to manufacture something at a lower cost than the existing competitors and then not share that methodology with the existing competitors?
moolcool 4y ago
> Free markets will always remain the most fair system of resource allocation. First, I think there's a lot of different angles from which you can challenge that claim. In a truly "free market", things like nepotism, bribery, and inherited wealth still exist (and by definition they'd exist in higher levels than in regulated markets). Does some random millionaire trust fund kid in a free market really create value? Is it fair that Bezos is a billionaire when low-paid workers are the ones actually creating value at Amazon? I would argue that without some restriction, free markets almost guarantee _unfair_ resource allocation. Like without antitrust regulation, for example, it would become a winner-take-all game where a single megacorporation could absorb all competitors and value labour however the hell they want. That is all besides the point though. I would argue that the "most fair system of resource allocation" is not a desirable outcome at all. If a true meritocracy were possible, swaths of people would just starve to death.
konschubert 4y ago
Is it fair when somebody has rich parents and just inherits so much money they never have to work? Is it fair when a disabled person starves because they cannot earn money? I think that there are ways to improve fairness beyond a total free market. Though I agree that if you push it too hard, you remove incentives that are good. It's a tough problem and I don't think the optimum is in the extremes.
- moolcool 4y ago
  It's "fair" only in a very tautological sense of the word, and in the sense that literally any wealth distribution system is "fair". Like yes, a hedonistic trust fund baby who spends their life buying luxury goods and going on vacations may "create value" merely through allocating wealth to goods and services which bring him pleasure. I think that's an extremely stupid way to look at the concept of value though.
  - robertlagrant 4y ago
    > I think that's an extremely stupid way to look at the concept of value though. You seem to have changed the topic to "value creation", which wasn't part of the previous poster's point. The only question is: do you want to destroy one of the largest incentives for people to create value by removing their ability to pass wealth to their descendants?
    - moolcool 4y ago
      It seems unlikely to me that a vast majority of people with enough wealth to create a scenario like this truly created that amount of value in the first place though. In other words, the existence of billionaires in the first place is indicative of inequality.
      - Jensson 4y ago
        Replace an inefficient organization with a slightly less inefficient organization and you generate billions in value if it was large enough. Doesn't sound like an impossible outlier to me, there are plenty of huge inefficient organizations out there. And you can't do that with politics. The huge entrenched organization will always have way more political power than your new efficient startup, so without capitalism they will never get replaced. With capitalism it is still hard to replace then, but it is possible since you have the power of capital investors to rely on and not just politics, and that can give you enough leverage to grow your organization until it can compete with the huge old one. So the lesson is that basing all decisions in society using politics is bad. But also basing all decisions in society based on capital is also bad. You need a mix since they are good for different things.
yodsanklai 4y ago
> Free markets will always remain the most fair system of resource allocation. Based on what? Theoretical models are full of assumptions that doesn't hold in practice. Empirical evidence is limited too since free markets don't even exist in the real world. If anything, evidence show that they fail for a wide range of applications where there are inefficient and not fair. > Any other system requires an uninvolved power, likely a govt, to decide. Free markets also required a government. They need to be regulated and can't work in a vacuum.
orwin 4y ago
You cannot have free markets without a government, sadly. It is either an utopia or a dystopia, depending on your point of view of private militia and consolidation of corporate power. Also, free market ideology come from the idea that natural ressources are infinite (JB Say explained that clearly, JS Mill implied it). Later on, other free market economists corrected him (to make Say's law still relevant) and added that even if not infinite, ressources can be substitued easily once one is over-exploited. 2007-2008 put a question mark on the "easily", as the disruption from a conventional oil peak lasted until 2012 in Italy (and probably Greece, Spain and Portugal, the four EU countries that depend the most on oil to make their electricity). This year will put a bigger question mark on how well agricultural ressources substitution work.
zwirbl 4y ago
Free markets are not a fair system of resource allocation and were never intended to be such, they are about efficient resource allocation. Having eg. a government involved might lead to a fairer outcome but efficiency will take a hit
- ixtli 4y ago
  I would go further and define “efficient.” They are, in western society, efficient at accumulating private capital in the hands of capitalists. No claim is made by anyone to the contrary.
  - zwirbl 4y ago
    This is exactly the type of efficiency I had in mind. > No claim is made by anyone to the contrary The comment I replied to stated "fair" resource distribution and I claim it is most definitely not about fairness Edit: Line break
- imapeopleperson 4y ago
  Free markets have always been innately fair. If you own something, how would it be fair for the government to have any direct say on what you should do with it?
  - zwirbl 4y ago
    I guess you will have to give an explanation what you think constitutes a free market and what kind of fairness you have in mind. It depends on the kind of property, as there might be very legitimate reasons for the government (representing the people in democratic nations) to have a direct say what you are allowed do with it. You might own a lake or a spring that's important for the population. You might own a factory where government dictates how clean the sewer runoff needs to be. Would that be unfair? I stated below that it is all about balancing interests, as I view every kind of extremism (that includes free market maximalism) as at least counterproductive, if not outright harmful
- G3rn0ti 4y ago
deleted 4y ago
[deleted]
newsclues 4y ago
I don’t know of many free markets (regulations effect everything).

Free markets will always remain the most fair system of resource allocation. Any other system requires an uninvolved power, likely a govt, to decide. Who gets to live in the 56 Leonard PH?

ixtli 4y ago

This is the neoliberal ideology they are talking about, yes :)

kuschku 4y ago

A free market necessarily requires government involvement. A free market is industry-specific. For it to work, a company in one industry may not influence the market in a different industry, or that market won’t be free anymore. To prevent this, government involvement is required to ensure fair start conditions for all companies within of the free market

cameronh90 4y ago
While a free market economy requires government involvement, one must admit it requires less than an economy that tries to ensure equality. I also suspect the more you leave an economy to its own devices, the more unequal it becomes.
maxerickson 4y ago
This is incoherent, industrial categories are a convenience, not a natural component of economic activity. Is automation an industry? Because an automation innovator might be built on the assumption that it can influence another industry. Can a manufacturer of one thing decide that they have the internal capacity to manufacture something at a lower cost than the existing competitors and then not share that methodology with the existing competitors?

moolcool 4y ago

> Free markets will always remain the most fair system of resource allocation. First, I think there's a lot of different angles from which you can challenge that claim. In a truly "free market", things like nepotism, bribery, and inherited wealth still exist (and by definition they'd exist in higher levels than in regulated markets). Does some random millionaire trust fund kid in a free market really create value? Is it fair that Bezos is a billionaire when low-paid workers are the ones actually creating value at Amazon? I would argue that without some restriction, free markets almost guarantee _unfair_ resource allocation. Like without antitrust regulation, for example, it would become a winner-take-all game where a single megacorporation could absorb all competitors and value labour however the hell they want. That is all besides the point though. I would argue that the "most fair system of resource allocation" is not a desirable outcome at all. If a true meritocracy were possible, swaths of people would just starve to death.

konschubert 4y ago

Is it fair when somebody has rich parents and just inherits so much money they never have to work? Is it fair when a disabled person starves because they cannot earn money? I think that there are ways to improve fairness beyond a total free market. Though I agree that if you push it too hard, you remove incentives that are good. It's a tough problem and I don't think the optimum is in the extremes.

moolcool 4y ago
It's "fair" only in a very tautological sense of the word, and in the sense that literally any wealth distribution system is "fair". Like yes, a hedonistic trust fund baby who spends their life buying luxury goods and going on vacations may "create value" merely through allocating wealth to goods and services which bring him pleasure. I think that's an extremely stupid way to look at the concept of value though.
- robertlagrant 4y ago
  > I think that's an extremely stupid way to look at the concept of value though. You seem to have changed the topic to "value creation", which wasn't part of the previous poster's point. The only question is: do you want to destroy one of the largest incentives for people to create value by removing their ability to pass wealth to their descendants?
  - moolcool 4y ago
    It seems unlikely to me that a vast majority of people with enough wealth to create a scenario like this truly created that amount of value in the first place though. In other words, the existence of billionaires in the first place is indicative of inequality.
    - Jensson 4y ago
      Replace an inefficient organization with a slightly less inefficient organization and you generate billions in value if it was large enough. Doesn't sound like an impossible outlier to me, there are plenty of huge inefficient organizations out there. And you can't do that with politics. The huge entrenched organization will always have way more political power than your new efficient startup, so without capitalism they will never get replaced. With capitalism it is still hard to replace then, but it is possible since you have the power of capital investors to rely on and not just politics, and that can give you enough leverage to grow your organization until it can compete with the huge old one. So the lesson is that basing all decisions in society using politics is bad. But also basing all decisions in society based on capital is also bad. You need a mix since they are good for different things.

yodsanklai 4y ago

> Free markets will always remain the most fair system of resource allocation. Based on what? Theoretical models are full of assumptions that doesn't hold in practice. Empirical evidence is limited too since free markets don't even exist in the real world. If anything, evidence show that they fail for a wide range of applications where there are inefficient and not fair. > Any other system requires an uninvolved power, likely a govt, to decide. Free markets also required a government. They need to be regulated and can't work in a vacuum.

orwin 4y ago

You cannot have free markets without a government, sadly. It is either an utopia or a dystopia, depending on your point of view of private militia and consolidation of corporate power. Also, free market ideology come from the idea that natural ressources are infinite (JB Say explained that clearly, JS Mill implied it). Later on, other free market economists corrected him (to make Say's law still relevant) and added that even if not infinite, ressources can be substitued easily once one is over-exploited. 2007-2008 put a question mark on the "easily", as the disruption from a conventional oil peak lasted until 2012 in Italy (and probably Greece, Spain and Portugal, the four EU countries that depend the most on oil to make their electricity). This year will put a bigger question mark on how well agricultural ressources substitution work.

zwirbl 4y ago

Free markets are not a fair system of resource allocation and were never intended to be such, they are about efficient resource allocation. Having eg. a government involved might lead to a fairer outcome but efficiency will take a hit

ixtli 4y ago
I would go further and define “efficient.” They are, in western society, efficient at accumulating private capital in the hands of capitalists. No claim is made by anyone to the contrary.
- zwirbl 4y ago
  This is exactly the type of efficiency I had in mind. > No claim is made by anyone to the contrary The comment I replied to stated "fair" resource distribution and I claim it is most definitely not about fairness Edit: Line break
imapeopleperson 4y ago
Free markets have always been innately fair. If you own something, how would it be fair for the government to have any direct say on what you should do with it?
- zwirbl 4y ago
  I guess you will have to give an explanation what you think constitutes a free market and what kind of fairness you have in mind. It depends on the kind of property, as there might be very legitimate reasons for the government (representing the people in democratic nations) to have a direct say what you are allowed do with it. You might own a lake or a spring that's important for the population. You might own a factory where government dictates how clean the sewer runoff needs to be. Would that be unfair? I stated below that it is all about balancing interests, as I view every kind of extremism (that includes free market maximalism) as at least counterproductive, if not outright harmful
G3rn0ti 4y ago

deleted 4y ago

[deleted]

newsclues 4y ago

I don’t know of many free markets (regulations effect everything).