Failure of free-market economics

[noblegas]

Free economics doesn't exist. I challenge you to find me a market completely run by free market economics.

The problem with free markets is that they can produce oligopolies and monopolies by natural barriers that come with certain markets.

Whats your point? Just because a certain ideology has not been implemented or adopted by existent and previous societies , you come to the faulty conclusion that it will not work.

At one period in human history, virtual all societies on Earth had slave populations. If someone like you were to say to an abolitionist, 'society would descend into chaos if we did not have slavery, show me a prosperous society without slavery',there would not be steps taken to eliminate slavery

 

[mheslep]

Whats your point? Just because a certain ideology has not been implemented or adopted by existent and previous societies , you come to the faulty conclusion that it will not work.

At one period in human history, virtual all societies on Earth had slave populations. If someone like you were to say to an abolitionist, 'society would descend into chaos if we did not have slavery, show me a prosperous society without slavery',there would not be steps taken to eliminate slavery

That post to which you are replying is from November last year.

 

[mheslep]

Interview w/ Stanford economist John Taylor, author of the widely used http://en.wikipedia.org/wiki/Taylor_rule" governing money rates.

http://tv.nationalreview.com/uncommonknowledge/post/?q=OWE0YzIwN2VkYzBkYWNjMDczMThjODVjMjZlNjI2N2E=" , 6:00.
Commenting on French President Nicolas Sarkozy's statement:

"The all powerful market that is always right, that's finished."​

Taylor:

"Absolutely not. [...]If you look at this carefully, don't be idealogical about it, don't be political. [Then] we see a crisis that was caused, prolonged, and made more severe by government policy, not by failures in markets."​

Which agrees w/ what I've read/seen.

 

[mihna]

http://www.jstor.org/pss/1884183"

Proves that one of the axioms of a free market model is demonstrably false(equal access to data). The existence of bargains is due to inherent information deficits during the exchange process.

This speaks volumes about capitalism in general really.

 

[DrClapeyron]

Proves that one of the axioms of a free market model is demonstrably false(equal access to data). The existence of bargains is due to inherent information deficits during the exchange process.

That hurts my head to read, could you translate it?

**** happens, but we need to learn something useful from our success as well as our failure...with out crying and apologizing too much.

 

[mihna]

That hurts my head to read, could you translate it?

**** happens, but we need to learn something useful from our success as well as our failure...with out crying and apologizing too much.

They ran a game theory simulation w/ 2 people(representing buyer and seller). With stakes in two different outcomes(representing a market exchange). One side would have access to more information then the other. The party with less data is basically left with two options. 1. Hold out as long as possible to try to deduce more information from the informed party, which would lower his losses. Or opt out of the exchange all together and hope making the deal is more important to the informed party then a bargain.

One of the tenets of free-market exchange is equal access to information across the board but the existence of a "bargain" shows this is false. Untrue axioms...don't bode well for a theory

 

[Al68]

They ran a game theory simulation w/ 2 people(representing buyer and seller). With stakes in two different outcomes(representing a market exchange). One side would have access to more information then the other. The party with less data is basically left with two options. 1. Hold out as long as possible to try to deduce more information from the informed party, which would lower his losses. Or opt out of the exchange all together and hope making the deal is more important to the informed party then a bargain.

One of the tenets of free-market exchange is equal access to information across the board but the existence of a "bargain" shows this is false. Untrue axioms...don't bode well for a theory

That's not one of my tenets, and most here would call me a free market "radical extremist". But free enterprise isn't some cooked up theory, it's just what most people do when free to do so. It's a consequence of economic liberty, not some "system" imposed by government.

Besides, in that simulation, unequal access to information was assumed, not proven. It simply showed the result of assuming unequal access to info in the simulation.

If I ran a simulation assuming that all cars were blue, would the result "prove" that all cars are blue?

 

[mheslep]

One of the tenets of free-market exchange is equal access to information across the board but the existence of a "bargain" shows this is false. Untrue axioms...don't bode well for a theory

Information symmetry is not an axiom, it is a variable in microeconomics.

 

[MFriedmam]

Free market never fails without government intrusion

Socialism has a long history of fails not capitalism

 

[Mgt3]

Free market never fails without government intrusion

Socialism has a long history of fails not capitalism

The free market failed pretty badly last year. Without government intrusion. Libertarian economics is for the simple minded.

By the way "MFriedmam", socialism is not the only other option to free market capitalism and mere government intervention in markets is not socialism. Go back and learn economic terms before you go throwing them around.

 

[mheslep]

The free market failed pretty badly last year. Without government intrusion.

Without government intrusion? On which planet?

 

[DrClapeyron]

This is America, we have an American-market. The idea of free-market is for women, children and wimpy college nerds. We are the star quarterback on the #1 ranked school: get as many girls as you can while the going is good. That my friend, is the American-market.

 

[Al68]

The free market failed pretty badly last year. Without government intrusion. Libertarian economics is for the simple minded.

By the way "MFriedmam", socialism is not the only other option to free market capitalism and mere government intervention in markets is not socialism. Go back and learn economic terms before you go throwing them around.

You might try looking up "free market". "Mere government intervention" may not be socialism, but it's certainly not a free market either. It's called a "mixed economy".

The failure you referred to was a failure of the mixed economy, not of a free market. It not only would not, but could not have happened in a free market for reasons obvious to anyone with a mediocre knowledge of what happened.