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I think you are confusing "free market" with "perfect competition". a free market is just a market with minimal government interference (taxes, subsidies, impor
by leetcrew 4y ago
I think you are confusing "free market" with "perfect competition". a free market is just a market with minimal government interference (taxes, subsidies, import/export controls, etc.). monopolies and other market failures are not incompatible with free markets. perfect competition is the one that requires all the assumptions about rational actors and perfect information.
- impossiblefork 4y agoBut if you accept market failures as still consider it a free market then this free market will have very few of the characteristics of a free market that people hold up as positive or useful, perhaps even those properties that you yourself consider necessary for trade with the other country to be acceptable. Let's therefore consider something pathological: let's suppose that a country has a free market in this sense, but is owned in its entirety by a small group, such as how the nobility in Denmark owned something like 90% of the land, while the population are kept as permanent renters, never permitted to buy any land that has been obtained by that group, not due to law, but to traditions of the land owning group. Do you think it would be reasonable to permit trade with such a country?