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Government intervention is practically required to allow competition. Any market left to its own devices will devolve into a monopoly. Governments are required

Government intervention is practically required to allow competition. Any market left to its own devices will devolve into a monopoly. Governments are required to regulate to avoid monopolies thereby preserving a level playing field on which competition can occur. When Adam Smith was talking about a "Free market", the freedom he was talking about was freedom to enter and freedom to exit a market. That is, freedom from barriers to market. These freedoms are guaranteed by governments. Businesses left to themselves will raise the barriers to market thereby making the market non-free in Smith's terms. Oh, and pointing this out is not "Marxist".

jwallaceparker 12y ago
The Marxist term was misused in this case, you're right. I was just making a general comment about a perceived anti-capitalist bias in these forums. "Any market left to its own devices will devolve into a monopoly." This is not an observable phenomenon. A market left to its own devices will continually deliver better, cheaper products to its customers over time. This is the effect competition has on a marketplace. "Businesses left to themselves will raise the barriers to market thereby making the market non-free in Smith's terms." If a business is not using physical force or fraud then the only barriers they can erect to keep out competitors are superior offerings in the marketplace. Microsoft is such a great example here. Their competitors were crying monopoly but Microsoft had created its marketshare through innovation and entrepreneurship. If they abuse this marketshare by offering inferior products at high prices, it creates a market opportunity for another competitor to create better products at more attractive prices. In this sense it's the free consumer choice that's providing the "regulation" in the market. Businesses have to follow the consumer's wants to gain marketshare. The only government "regulatory" role in a market is to settle disputes about property or fraud or criminal behavior. With that basic structure in place, Adam Smiths's "invisible hand" would take care of the rest.

jwallaceparker 12y ago

The Marxist term was misused in this case, you're right. I was just making a general comment about a perceived anti-capitalist bias in these forums. "Any market left to its own devices will devolve into a monopoly." This is not an observable phenomenon. A market left to its own devices will continually deliver better, cheaper products to its customers over time. This is the effect competition has on a marketplace. "Businesses left to themselves will raise the barriers to market thereby making the market non-free in Smith's terms." If a business is not using physical force or fraud then the only barriers they can erect to keep out competitors are superior offerings in the marketplace. Microsoft is such a great example here. Their competitors were crying monopoly but Microsoft had created its marketshare through innovation and entrepreneurship. If they abuse this marketshare by offering inferior products at high prices, it creates a market opportunity for another competitor to create better products at more attractive prices. In this sense it's the free consumer choice that's providing the "regulation" in the market. Businesses have to follow the consumer's wants to gain marketshare. The only government "regulatory" role in a market is to settle disputes about property or fraud or criminal behavior. With that basic structure in place, Adam Smiths's "invisible hand" would take care of the rest.