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>How were you supposed to know? Not to get all philosophical over a story on poo coffee, but this is one of the downsides to free markets. They hide informatio

• iacvlvs 13y ago
  There is no true free market in the world. One of the defining characteristics of a free market is perfect information. This is one of the downsides of market imperfections.
  • abalone 13y ago
    Ergo, it is a downside of all unregulated markets. I would avoid the term "imperfection" for something that is fundamental to markets. The information on conditions of production usually has to come from the seller and there is usually little incentive for them to provide it unless compelled to.
    • icebraining 13y ago
      Ergo, it is a downside of all unregulated markets. Unregulated? Do regulated markets have perfect information?
      • abalone 13y ago
        Didn't say that. Poor information on the conditions and effects of production is fundamental to unregulated markets. Much like externalities, they are not mere "imperfections" or footnotes which is usually how they are presented in pro-free-market Econ 101 texts. They are fundamental; e.g. much of the environmental threat the planet faces can be contributed to externalities and poor info. Nevermind the poor animal-poop slaves. Regulations and activism (such as this type of journalism) are some of the non-market forces that can compensate.
        • hrjet 13y ago
          But regulations may lead to bribery and other workarounds. Activism may be biased. It may also lead to long-winded debates, and ultimately, to polluted information. (Eg, global warming, GM crops, etc). Ultimately, it doesn't matter if there is regulation or not, activism or not; there is no perfect information.
          • malkia 13y ago
            You have most regulations around kid's toys, and I'm thankful for that!
    • iacvlvs 13y ago
      It is fundamental to all markets in the real world. It is also a defining trait of the platonic ideal of a free market, and one of the reasons why the platonic ideal absolute free market is unrealisable. Markets can be more or less free, but never entirely so. Regulation by non-market forces is one way that markets are made less free. Such regulation is often intended to counteract or offset other things that make the market in question less free.
  • jes 13y ago
    Why do you think that a free market requires perfect information? Do you think the situation is the same for a democracy? Does it also require perfect information? http://wichitaliberty.org/free-markets/myth-markets-depend-on-perfect-information-requiring-government-regulation-to-make-information-available/ http://wichitaliberty.org/free-markets/myth-markets-depend-o...
    • ZeroGravitas 13y ago
      Your response and the URL of your link refer to free markets, and they by definition require perfect information. The info at your link talks about something else.
      • jes 13y ago
        In this definition from Wikipedia, in the section on Microeconomics, it is claimed that perfect information is a physical impossibility. Can you help me understand why free markets "by definition" require that which cannot exist? http://en.wikipedia.org/wiki/Perfect_information http://en.wikipedia.org/wiki/Perfect_information
        • makomk 13y ago
          Oh, that's easy - free markets are an ideal that can't actually exist in the real world, in part because perfect information is impossible.
          • contingencies 13y ago
            Much like democracy.
        • tikhonj 13y ago
          The same reason integrals require continuous functions, which also can't meaningfully exist: it's a mathematical model. Just because it can't possibly exist in the real world does not mean it's useless or even "wrong" per se.
        • 13y ago
  • Zuider 13y ago
    >One of the defining characteristics of a free market is perfect information. 'Perfect information' is an unrealistic assumption used in neoclassical models which treat knowledge as just another input, on a par with raw ore, pork bellies or gasoline. In the real world it just doesn't work like that. The defining characteristic of the free market is that it is a creative process of discovery. It creates knowledge where none existed before. There can be no such thing in principle as 'perfect information'. Information tends to exist in the state of being inherently dispersed among the actors, often tacit to the point of being inexpressible. The market facilitates the use of such knowledge, and the the discovery of new knowledge.
• justinmk 13y ago
  > this is one of the downsides to free markets. They hide information on the conditions of production This is such a meaningless mantra. The election process--which is supposed to "fix" the free market--also hides information, except there are many fewer opportunities for correction. A vote happens once every N years, whereas market corrections are (relatively) continuous.
  • mistercow 13y ago
    If one potential solution to free market problems doesn't work, that doesn't mean that the problems don't exist, aren't free market problems, or don't matter.
    • justinmk 13y ago
      I'm eager to hear an alternative to market forces that doesn't involve elections.
• jgg 13y ago
  The alternative is a regulated market, where I trust a government entity, full of humans who are vulnerable to the same forces of corruption, incompetence and greed, to give me accurate information and not be bought and paid for by private entities and thus used by private entities to give them even more influence and power. Also, in what context are we dealing with a free market here and how is it relevant?
  • dinkumthinkum 13y ago
    And yet even with flaws, there is evidence to suggest regulations by those funny "humans" have made products significantly safer.
    • jgg 13y ago
      I agree, barring the unnecessary adjectives. My point was that all 'systems' are corrupted by humans, not just a free market. I was criticizing an absolutist, irrelevant statement about the nature of the "free market" on the story, and mostly, asking the person how it was relevant at all, since nothing we have today remotely resembles a free market.
• frogpelt 13y ago
  And not to reciprocate, but free markets are much more likely to be transparent than any other. When a free market realizes consumers demand transparency, transparency becomes an option in the market. Not the only option, but one of the many. How would that transparency work in a market that is absolutely controlled by regulation and government? Fine, until that government itself ceased to be transparent. ASIDE: There are no absolutely controlled markets or absolutely free markets and never will be. Capitalism will always seep out around the edges and regulation will always be necessary.
  • dinkumthinkum 13y ago
    You're conflating things. You can have ab200% regulated market with total transparency either by regulators or the participating companies ... I mean actual the implication that you get a transparent market from a free market because of "consumer demands" is sort of laughable when you consider that the free market on planet Earth does not contain perfect agents.
    • Zuider 13y ago
      >...when you consider that the free market on planet Earth does not contain perfect agents. But the same imperfect agents, human beings, also constitute governments and bureaucracies. Markets are not a perfect institution, and it is very easy to point out flaws, but they have an observed tendency towards improvement, self ordering, and discovery of better resources that is lacking from government. Flaws in the market tend towards being corrected while flaws in government tend to become entrenched, obfuscated, and aggressively defended against any attempt to reveal and correct them.
  • abalone 13y ago
    > free markets are much more likely to be transparent than any other. That's wishful thinking contradicted by oodles of historical experience. Random example: the unregulated market for medicine in the U.S. prior to the 20th century. The problem is consumers are not organized by default. Markets typically reflect individual preferences just fine, but individuals don't have the resources to fact-check propaganda, research and verify conditions of production, etc. This aspect of "consumer demand" requires collective organization to express effectively. A buying group is one example. But these things take investments of their own to start up, which is why you mostly find them among business customers. One of the reasons the corporate group health insurance market is so much better than the individual one. For the everyman, the government is a mechanism by which they can express collective demand. And it's why food and medicine safety, to pick one fundamental, has never been effectively secured for the general public absent government regulation.
• snowwrestler 13y ago
  I don't think a regulation forced Tony Wild to post this story, or for it to be voted to the top spot on HN.
• contextual 13y ago
  I think that's why animal testing is such a huge industry, killing 19.5 million animals in the US alone every year[1]. It's even claiming the lives of house pets[2]. We don't see all the animal suffering that goes on to make consumer products. It's kept hidden from view. [1] http://www.statisticbrain.com/animal-testing-statistics/ http://www.statisticbrain.com/animal-testing-statistics/ [2] http://www.stolenpets.com/about.htm http://www.stolenpets.com/about.htm
• zizee 13y ago
  A market in which the consumer cannot get access to all information about the market is not a free market at all. Information availability is a key part of the definition of a free market.
  • radarsat1 13y ago
    Not sure. How does this interact with the ideas of Trade Secrets and the patent system? The latter is to encourage dissemination of the former in exchange for temporary monopoly. One would usually argue that the ability to keep trade secrets is the more "free" market, yet we have decided that there are long-term societal benefits to dissemination so we provide government protection of ideas. Since Libertarians would say that this protection represents some form of government intervention, I would say that the idea of secrets is fairly fundamental to the idealists' free market. Of course, whether or not patents are a good idea is debatable, but that's another question. My point is that I don't agree that transparency is a fundamental aspect of the free market, I haven't heard that argument before and don't see how the free market even encourages it. Sure, people might request a certain amount of transparency, but no more transparency will be provided than that which is demanded by consumers -- and we have seen quite frequently that consumers are quite willing to be kept in the dark to a certain extent.
    • zizee 13y ago
      I'm not trying to debate the merits of trade secrets and the patent system. I was simply making the point that if you have a market where consumers don't have access to perfect information, it is not a free market. The term "Free Market" has a very specific definition. Information accessibility is a very important part of that definition. It is very difficult for all the criteria to be met, so you will never find a perfectly free market outside textbooks. People talk about "free markets" all the time, especially business lobbyists/PR. Usually they use the term "free market" to mean the government should get the hell out of their way, but they often don't really want a free market (especially if they are the incumbents). They have effectively co-opted the term to help their narratives, confusing people in the process.