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Free markets almost never can survive longterm without (sometimes extensive) regulation. Historically there might have been a few exceptions to that, but basic

Free markets almost never can survive longterm without (sometimes extensive) regulation. Historically there might have been a few exceptions to that, but basically always you have a few good years and then the winner(s) who emerges starts abusing their position (even without any regulation that might make it easier for them to do that). Unregulated markets tend to be inherently unstable. And it’s not so much less vs more regulation, there are two axis and yes corrupt and inefficient governments tend to produce regulation that decrease competitiveness, productivity, fairness etc. And then you have industries which simply can’t be allowed to be privately owned unless there is extensive regulation (because free competition is almost impossible in those sectors): utilities, banking, transportation etc. sometimes even telecom (e.g. roaming fees in the EU).

AnthonyMouse 2y ago
> Free markets almost never can survive longterm without (sometimes extensive) regulation. There is no such thing as "without regulation". Nobody is suggesting a system in which murder is legal and the most powerful warlord gets a monopoly. But there is a difference between "the government enforces contracts and anti-trust laws and prices major externalities" and "the government micromanages the economy and is captured by the incumbents". So for example, a free market doesn't need zoning density restrictions. Their absence has no apparent mechanism that would lead to a monopoly. Therefore, a freer market in which the government has no power to impose zoning density restrictions is better than the current one in which that is possible and is consequently making housing unaffordable. Depriving the government of the authority to do that is a viable mechanism by which that form of corruption/inefficiency is avoided. > And then you have industries which simply can’t be allowed to be privately owned unless there is extensive regulation (because free competition is almost impossible in those sectors): utilities, banking, transportation etc. sometimes even telecom (e.g. roaming fees in the EU). But even in these industries the necessary regulation is narrow and should be directed to isolating the natural monopoly from any other offering, e.g. roads are a natural monopoly but vehicle manufacturing isn't, so the government provides roads but the private market provides cars. Conversely, the US has last mile ISPs providing phone and TV service, which isn't adequately isolating the last mile and then we get regulatory capture and corruption. It's not obvious they should even be providing transit, rather than having an entity that narrowly maintains the fiber in the street and does nothing else. You're certainly right that it isn't just a matter of "more regulation" or "less regulation", but it is a matter of removing many of the existing regulations because they specifically are the source of the high costs and market concentration.
- germandiago 2y ago
  > There is no such thing as "without regulation" No need to take my words literally. I you will, favor natural right and yes, put a bit of something on top. But this is not happening clearly. There is a lot of subsidizing and regulation. They are giving, literally, prizes to people that do nothing and punishments to people that kill themselves working. On the way, they have been swapping incentives from working hard to not work. This in itself is a problem. Currently I see democracies as giant clientele systems. I am not far from the truth at all I think, at least in the case of my country (Spain).
- jltsiren 2y ago
  "The government" is a fictional entity. In reality, it's just a bunch of people. I think the real issue is that free markets and free speech are not really compatible. If people are allowed to express political opinions, some opinions will inevitably become popular. Sometimes that happens because people don't like the outcomes of the market. Then they try to change things by regulating the market. Repeat that often enough, and you get more and more regulations over time.
  - defrost 2y ago
    Some would argue that the freest markets are regulated to prevent collusion, to ensure free and equal access to all relevant infomation, to penalise deliberate falsehoods, etc. Certainly the OG Free Markets that inspired the first order Invisible Hand model were. 'free market' is such a nebulous term, bandied about en masse in forums where rarely is it questioned what specific type of free market a specific person might mean.
    - germandiago 2y ago
      It is not nebulous actually. We are just playing with ideas, and ideas lead to simplification. The idea of free market, in principle is lasseiz faire. Of course most people do not propose that. My idea is that, as one spanish philosopher said (taken from Hume), that all law (derecho in spanish, not sure if it is exactly equivalent for the meaning in english, since the law tradition in Spain comes from Roman law), so take my translation with a warning. All law can be summarized in two premises: 1. "property is not acquired or lost by violence or fraud" 2. "Deals must be fullfilled. Whoever does not fullfill their deals shall compensate to the side fullfilling it." The rest is not "law" as such. It is ruling, administration, and other things, but not "law". It is arbitrary in many ways, and I agree this is true for a lot of what we see. For example: there are regulations for safety that will make people die waiting a medication or someone not able to get some transport vehicle for short distances, just because it is forbidden. But you can always find a reason to regulate. OTOH, you regulate the choices and lives of others, do we really have the right to decide for others? I think that is a very paternalistic view of things. But not only that, it often promotes irresponsibility in action: since they regulate, they can be blamed, I do not need to decide. I have seen lots of that attitude at least in my country. It also promotes more scarcity and leads towards oligopolistic setups. It is a complex topic, but I favor freedom and responsibility over regulation clearly, as long as you do not damage others. In fact, regulations do damage others but people often take them for their intentions and not for their results ... something that is a big shocking to me. It is like it gives them peace of mind even if the reality has nothing to do with the effect they are expecting or imagining. The translation could be pretty bad, so I apologize for that. I just hope it is understandable.
germandiago 2y ago
I jsut know that compare to 30-40 years ago we have been following this path of increasing regulations and the results are starting to be harmful. However, some people ask for more of this, instead of less. It is curious when the solution to a problem is throwing more of the problem at it. If it was a transition period of some kind where the effects of some policies cannot be seen yet... but it is years and years and years. The result is high debt and collusion, or that is more of what I see around me, in all Europe. It is a chain of favors and they regulate more and more aspects of our lives, yet we are not better. We pay more, the services are not better either. I think something is broken here and I am very aware that the result is not giving more control to regulators to even smash us more. It is quite the opposite: leave people alone. At least, this is my experience right now. I can assure that 25 years ago my country had much more balance in most areas and people were more free. I am almost 41 FWIW.

AnthonyMouse 2y ago

> Free markets almost never can survive longterm without (sometimes extensive) regulation. There is no such thing as "without regulation". Nobody is suggesting a system in which murder is legal and the most powerful warlord gets a monopoly. But there is a difference between "the government enforces contracts and anti-trust laws and prices major externalities" and "the government micromanages the economy and is captured by the incumbents". So for example, a free market doesn't need zoning density restrictions. Their absence has no apparent mechanism that would lead to a monopoly. Therefore, a freer market in which the government has no power to impose zoning density restrictions is better than the current one in which that is possible and is consequently making housing unaffordable. Depriving the government of the authority to do that is a viable mechanism by which that form of corruption/inefficiency is avoided. > And then you have industries which simply can’t be allowed to be privately owned unless there is extensive regulation (because free competition is almost impossible in those sectors): utilities, banking, transportation etc. sometimes even telecom (e.g. roaming fees in the EU). But even in these industries the necessary regulation is narrow and should be directed to isolating the natural monopoly from any other offering, e.g. roads are a natural monopoly but vehicle manufacturing isn't, so the government provides roads but the private market provides cars. Conversely, the US has last mile ISPs providing phone and TV service, which isn't adequately isolating the last mile and then we get regulatory capture and corruption. It's not obvious they should even be providing transit, rather than having an entity that narrowly maintains the fiber in the street and does nothing else. You're certainly right that it isn't just a matter of "more regulation" or "less regulation", but it is a matter of removing many of the existing regulations because they specifically are the source of the high costs and market concentration.

germandiago 2y ago
> There is no such thing as "without regulation" No need to take my words literally. I you will, favor natural right and yes, put a bit of something on top. But this is not happening clearly. There is a lot of subsidizing and regulation. They are giving, literally, prizes to people that do nothing and punishments to people that kill themselves working. On the way, they have been swapping incentives from working hard to not work. This in itself is a problem. Currently I see democracies as giant clientele systems. I am not far from the truth at all I think, at least in the case of my country (Spain).
jltsiren 2y ago
"The government" is a fictional entity. In reality, it's just a bunch of people. I think the real issue is that free markets and free speech are not really compatible. If people are allowed to express political opinions, some opinions will inevitably become popular. Sometimes that happens because people don't like the outcomes of the market. Then they try to change things by regulating the market. Repeat that often enough, and you get more and more regulations over time.
- defrost 2y ago
  Some would argue that the freest markets are regulated to prevent collusion, to ensure free and equal access to all relevant infomation, to penalise deliberate falsehoods, etc. Certainly the OG Free Markets that inspired the first order Invisible Hand model were. 'free market' is such a nebulous term, bandied about en masse in forums where rarely is it questioned what specific type of free market a specific person might mean.
  - germandiago 2y ago
    It is not nebulous actually. We are just playing with ideas, and ideas lead to simplification. The idea of free market, in principle is lasseiz faire. Of course most people do not propose that. My idea is that, as one spanish philosopher said (taken from Hume), that all law (derecho in spanish, not sure if it is exactly equivalent for the meaning in english, since the law tradition in Spain comes from Roman law), so take my translation with a warning. All law can be summarized in two premises: 1. "property is not acquired or lost by violence or fraud" 2. "Deals must be fullfilled. Whoever does not fullfill their deals shall compensate to the side fullfilling it." The rest is not "law" as such. It is ruling, administration, and other things, but not "law". It is arbitrary in many ways, and I agree this is true for a lot of what we see. For example: there are regulations for safety that will make people die waiting a medication or someone not able to get some transport vehicle for short distances, just because it is forbidden. But you can always find a reason to regulate. OTOH, you regulate the choices and lives of others, do we really have the right to decide for others? I think that is a very paternalistic view of things. But not only that, it often promotes irresponsibility in action: since they regulate, they can be blamed, I do not need to decide. I have seen lots of that attitude at least in my country. It also promotes more scarcity and leads towards oligopolistic setups. It is a complex topic, but I favor freedom and responsibility over regulation clearly, as long as you do not damage others. In fact, regulations do damage others but people often take them for their intentions and not for their results ... something that is a big shocking to me. It is like it gives them peace of mind even if the reality has nothing to do with the effect they are expecting or imagining. The translation could be pretty bad, so I apologize for that. I just hope it is understandable.

germandiago 2y ago

I jsut know that compare to 30-40 years ago we have been following this path of increasing regulations and the results are starting to be harmful. However, some people ask for more of this, instead of less. It is curious when the solution to a problem is throwing more of the problem at it. If it was a transition period of some kind where the effects of some policies cannot be seen yet... but it is years and years and years. The result is high debt and collusion, or that is more of what I see around me, in all Europe. It is a chain of favors and they regulate more and more aspects of our lives, yet we are not better. We pay more, the services are not better either. I think something is broken here and I am very aware that the result is not giving more control to regulators to even smash us more. It is quite the opposite: leave people alone. At least, this is my experience right now. I can assure that 25 years ago my country had much more balance in most areas and people were more free. I am almost 41 FWIW.