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What happened to free market economy? How are americans totally fine with a company being denied its ability to sell its product to its end users? What happene

What happened to free market economy? How are americans totally fine with a company being denied its ability to sell its product to its end users? What happened was: The car makers used their position of power over the dealerships - power they had as a result of the free market economy, more or less - to screw them over. The dealers fought back with custom legislation. It's been this way for 70+ years now. The "free market economy," then as now, turns out to be its own worst enemy. http://www.newyorker.com/magazine/2006/09/04/dealers-choice-2 http://www.newyorker.com/magazine/2006/09/04/dealers-choice-...

kordless 12y ago
I believe 'levers of power' arise by entities exploiting simple liberties which are given and assumed in a free economy. Once those liberties are hedged and protected from use by others, we scramble around trying to figure out how to get the lever away from the entity who holds it. Monkeys with sticks and rocks, if you will.
- ericcope 12y ago
  I like the metaphor... whats interesting is the people complaining about the monkeys with sticks and rocks were the ones who gave the monkeys the sticks and rocks and now are sore about it.
ericcope 12y ago
The dealers chose to enact legislation rather than quit a business model that was being squeezed by their supplier. Find me a business that doesn't squeeze suppliers and vendors to increase their bottom line. The worst enemy of the free market isn't itself, its the crony capitalism that takes place when government gets involved. Its rare (if ever) that the intentions become the outcomes.
- Lagged2Death 12y ago
  I'd say this is an almost perfect example of intentions becoming outcomes, actually.
  - randyrand 12y ago
    huh?
    - Lagged2Death 12y ago
      The intention was to suppress competition, and it worked.
- sliverstorm 12y ago
  Find me a business that doesn't squeeze suppliers and vendors to increase their bottom line Are you saying the dealers were not within their rights to fight back and defend their piece of the supply chain? Or are you saying that using legislation was "cheating"? I'm a little confused.
dmix 12y ago
The problem is the state is for sale to the mega-corporations at the top of each industry. Laws and protection rackets are instated as you can see in the car dealer industry which is heavily regulated. This isn't free markets eating itself, it's the dangerous hazards of mixing free markets with an over-bearing state, that modern economies have chosen as the primary operating model. Aka Neoliberalism. https://en.wikipedia.org/wiki/Neoliberalism https://en.wikipedia.org/wiki/Neoliberalism It ultimately results in: you can have a free market, but after you get to a certain size you have to have friends within the state.
- Lagged2Death 12y ago
  This isn't free markets eating itself, it's the dangerous hazards of mixing free markets with an over-bearing state, that modern economies have chosen... Dude. You've just described free markets eating themselves.
  - angersock 12y ago
    No, that's not quite it. Read it again.
  - randyrand 12y ago
    mixing free markets with an over-bearing state That is by definition not a free market. A pure free market has no regulation. Free markets don't exist in the United States.
    - Lagged2Death 12y ago
      Free markets don't exist in the United States. Well hey now there's always the crystal meth market. Crystal meth being the vile stuff that no true Scotsman would ever use.
      - seanflyon 12y ago
        The illegal drug market is dramatically constrained by government interference.
randyrand 12y ago
> It's been this way for 70+ years now. The "free market economy," then as now, turns out to be its own worst enemy. You have it backwards. The problem that we have today is a result of not letting the free market be free 70+ years ago. The article you link to says GM "forced" dealers into buying their cars during recessions despite having little chance of selling them. Bologna! They didn't force anything! The dealers had zero obligation to buy their cars. What should have happened is we should have let the free market destroy those dealers. Destroy the dealers that bought cars without being able to sell them. And you know what? You know what would have happened if all of GM's dealers went out of business after being "forced" to buy their cars. GM would die! Good! GM needed it's dealers to sell their cars. It's a balancing act that the free market easily could have handled but the dealers and legislators took the selfish way out. We would have had direct car sales decades ago if it wasn't for anti-free-market legislation. The moral of the story, let the free market be free and avoid the shit show that will always without fail happen as a result. (See: Uber)
- Lagged2Death 12y ago
  You have it backwards. The problem that we have today is a result of not letting the free market be free 70+ years ago. Well, okay, but absent a time machine, you can't fix that. Any solution that starts with "well you should have thought of that before" has already failed. Mistakes happen; a system that can't tolerate mistakes is a system designed to fail. And in this case, it was the actors within the market (the dealers) that decided to make the market less free. They did it out of their own perfectly rational self-interest, and damn the consequences. Something like that is always happening, will always be happening. The "free market" is always full of actors working to make it less free. Bologna! They didn't force anything! ... GM needed it's dealers to sell their cars. "Do what I want, or face an existential threat" is pretty much the dictionary definition of "force." The big auto makers were able to do this sort of cram-down because they apparently didn't value their dealers.
  - seanflyon 12y ago
    > "Do what I want, or face an existential threat" is pretty much the dictionary definition of "force." No person faced an existential threat from that. Businesses on the other hand face existential threats all the time. Every time you don't buy something from a business you are, by you definition using "force" against them because they could go out of business without customers.

kordless 12y ago

I believe 'levers of power' arise by entities exploiting simple liberties which are given and assumed in a free economy. Once those liberties are hedged and protected from use by others, we scramble around trying to figure out how to get the lever away from the entity who holds it. Monkeys with sticks and rocks, if you will.

ericcope 12y ago
I like the metaphor... whats interesting is the people complaining about the monkeys with sticks and rocks were the ones who gave the monkeys the sticks and rocks and now are sore about it.

ericcope 12y ago

The dealers chose to enact legislation rather than quit a business model that was being squeezed by their supplier. Find me a business that doesn't squeeze suppliers and vendors to increase their bottom line. The worst enemy of the free market isn't itself, its the crony capitalism that takes place when government gets involved. Its rare (if ever) that the intentions become the outcomes.

Lagged2Death 12y ago
I'd say this is an almost perfect example of intentions becoming outcomes, actually.
- randyrand 12y ago
  huh?
  - Lagged2Death 12y ago
    The intention was to suppress competition, and it worked.
sliverstorm 12y ago
Find me a business that doesn't squeeze suppliers and vendors to increase their bottom line Are you saying the dealers were not within their rights to fight back and defend their piece of the supply chain? Or are you saying that using legislation was "cheating"? I'm a little confused.

dmix 12y ago

The problem is the state is for sale to the mega-corporations at the top of each industry. Laws and protection rackets are instated as you can see in the car dealer industry which is heavily regulated. This isn't free markets eating itself, it's the dangerous hazards of mixing free markets with an over-bearing state, that modern economies have chosen as the primary operating model. Aka Neoliberalism. https://en.wikipedia.org/wiki/Neoliberalism https://en.wikipedia.org/wiki/Neoliberalism It ultimately results in: you can have a free market, but after you get to a certain size you have to have friends within the state.

Lagged2Death 12y ago
This isn't free markets eating itself, it's the dangerous hazards of mixing free markets with an over-bearing state, that modern economies have chosen... Dude. You've just described free markets eating themselves.
- angersock 12y ago
  No, that's not quite it. Read it again.
- randyrand 12y ago
  mixing free markets with an over-bearing state That is by definition not a free market. A pure free market has no regulation. Free markets don't exist in the United States.
  - Lagged2Death 12y ago
    Free markets don't exist in the United States. Well hey now there's always the crystal meth market. Crystal meth being the vile stuff that no true Scotsman would ever use.
    - seanflyon 12y ago
      The illegal drug market is dramatically constrained by government interference.

randyrand 12y ago

> It's been this way for 70+ years now. The "free market economy," then as now, turns out to be its own worst enemy. You have it backwards. The problem that we have today is a result of not letting the free market be free 70+ years ago. The article you link to says GM "forced" dealers into buying their cars during recessions despite having little chance of selling them. Bologna! They didn't force anything! The dealers had zero obligation to buy their cars. What should have happened is we should have let the free market destroy those dealers. Destroy the dealers that bought cars without being able to sell them. And you know what? You know what would have happened if all of GM's dealers went out of business after being "forced" to buy their cars. GM would die! Good! GM needed it's dealers to sell their cars. It's a balancing act that the free market easily could have handled but the dealers and legislators took the selfish way out. We would have had direct car sales decades ago if it wasn't for anti-free-market legislation. The moral of the story, let the free market be free and avoid the shit show that will always without fail happen as a result. (See: Uber)

Lagged2Death 12y ago
You have it backwards. The problem that we have today is a result of not letting the free market be free 70+ years ago. Well, okay, but absent a time machine, you can't fix that. Any solution that starts with "well you should have thought of that before" has already failed. Mistakes happen; a system that can't tolerate mistakes is a system designed to fail. And in this case, it was the actors within the market (the dealers) that decided to make the market less free. They did it out of their own perfectly rational self-interest, and damn the consequences. Something like that is always happening, will always be happening. The "free market" is always full of actors working to make it less free. Bologna! They didn't force anything! ... GM needed it's dealers to sell their cars. "Do what I want, or face an existential threat" is pretty much the dictionary definition of "force." The big auto makers were able to do this sort of cram-down because they apparently didn't value their dealers.
- seanflyon 12y ago
  > "Do what I want, or face an existential threat" is pretty much the dictionary definition of "force." No person faced an existential threat from that. Businesses on the other hand face existential threats all the time. Every time you don't buy something from a business you are, by you definition using "force" against them because they could go out of business without customers.