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There never were free markets.
by fallentimes 18y ago
There never were free markets.
- gnaritas 18y agoNor will there ever be, free markets are a fantasy. The only real free market is the black market.
- cwan 18y agoFree markets require rule of law and property rights to thrive. That's the problem with black markets. You can't monetize some of the less tangible assets required to operate in formal markets. This is something that Hernando De Soto has written a considerable amount about. For an example - developing markets because of the lack of property rights, a lot of people don't have the ability to borrow against their homes - or even properly sell them. And what prices they do get, are at a discount because they have illegal additions, or what have you. Same thing for businesses that can take years to start and formalize (that's just for the paperwork!). Check out the World Bank's doingbusiness.org - and the places that are most difficult to do business consistently have the largest thriving black markets. Those markets definitely are not free. Black markets are definitely not the answer.
- gnaritas 18y agoYou make good points, but you misunderstand, I wasn't claiming they were the answer.
- yummyfajitas 18y agoThere are no frictionless newtonian particles either. But they remain a useful object to think about; under the right conditions, they are a good approximation to the real world. You can also add corrections to the model (i.e. add terms to the equations) and do an even better job at modeling the real world.