Talk:Free market

I have a lot of problems with this article but I wanted to discuss them in talk.

It's not true for example that many or even most socialists are against market economies nor is it true that most socialist countries have command economies. Most socialist parties in Western Europe aren't against market economies or for command economies. Also since the fall of the Soviet Union there aren't many command economies left.

it's a false dichotomy, and the entire article is obviously ideologically bias. Read commodity markets for a more neutral view of what a market is, and intellectual capital for a neutral view of debates on what roles flags, brands, and labels should play in establishing various guarantees for buyers. This article, if it exists at all, should follow the style of those.

Also it's not clear to me the distinction between this article and the article on market economies.

there isn't much of one, nor should there be, as the term "free market" is an ideological term adopted by people who promote absolute trust in market economies without much or any role for flags or labels as signals of trust.

---

Fixed this up a bit. One problem here is that the terms socialism and capitalism are used in fundamentally different ways in China and the West.

---

Removed this. Most socialist nations don't have command economies any more. Also, most nations *don't* have mixtures of market and command economies, they have state intervention in market economies which is different.

Free Markets and Capitalism

In contrast to the political terms capitalism and socialism the concept of the free market is purely economic. Nations tend to have an economic system that accords with their government's political ideology. Hence, democratic countries tend to have economies that are closer to a free market, while socialist countries generally have command economies. Despite official support for one economic model or another, nations generally have a mix of some sort.

Many dictatorships have actually come closer to the ideal free market than any democracy ever has. See Pinochet's Chile, for example. Also, historically speaking, the rise of (full) democracy has coincided with the rise of socialism and increased government regulation of the economy. The monarchies and limited democracies (only wealthy white males could vote) of the 19th century were far closer to "free markets" than any 20th century democracy. In general, in the West, socialism and democracy go hand in hand. The Soviet Union was the first exception to this rule, and it is from the Soviet Union that all the other similar exceptions drew their inspiration.

I don't know what you're talking about. There's plenty of Western capitalism, even in high-regulatory economies like France. Trey Stone 05:01, 15 Dec 2004 (UTC)

Capitalism as implemented in democratic countries (such as America, Canada, and most of industrial Europe) tends to be a mix between capitalism and statism (see state capitalism).

"Statism" always sounded like a very fuzzy and ambiguous term to me. It seems to be a word mostly used by libertarians as a synonym for "anything we don't like". A (modern) mixed economy incorporates elements of capitalism and socialism.

In these countries, the government routinely intervenes in the operation of the economy. Government intervention in the U.S. includes the granting of monopolies (such as franchises for cable TV or intellectual "property" rights) or the break-up of monopolies (as the dissolution of AT&T into the Baby Bells).

It might be nice to sometime have some compare & contrast between Free market and Capitalism. Followers of Ayn Rand tend to think of them as basically identical, while some radical Free market Libertarians consider such instituions as the corporation as being a state-imposed distortion against a true Free Market.

Where are all those libertariansim coming from? The ideology is called liberalism dammit! BL 00:01, 5 Oct 2003 (UTC)

As an american, my best take on liberalism vs. libertarianism is that around the turn of the 20th century, the liberals became progressives (e.g. Presidents Wilson, Roosevelt), arguing liberalism was really defined by it being progressive and that further progress to statism is also liberal. From then on, the people you all in europe would call liberals became libertarians.Mrdthree 02:57, 25 March 2006 (UTC)

Neo-liberalism

I don't think it's fair to use "free market" and "neo-liberal" as synonyms. Neo-liberal implies some sort of managed free-trade-lite system, as under NAFTA or the WTO, which many free market advocates oppose. I altered the opening line of the entry.Nat Krause 22:24, 16 Feb 2004 (UTC)

BL: "liberal", to Americans means "social democratic" nowadays.

The paragraph starting "in reality there are no totally free or ideal markets" is biased. A free market is simply one without coercive interference; "lack of perfect knowledge", supposedly-"monopolistic practices", "cartels", "insider trading" and "price fixing" (by non-governmental agencies) are in no way "anti-market"

Of course, those aren;t anti-market. But they are anti-free - and the problem here is that the thing described by the concept "free market" is rarely free. But if you think that section is POV, why don't you try to rephrase it to explain how free markets can be (tend towards?) authoritarian/fascist.

(and Rothbard has shown that a "monopoly" in the sense used here is entirely a creation of coercive interference, and cannot arise in a free market)

But that's rather the point. If you have a "free market" in the sense of a market that is unregulated by the state, the market falls under the influence of private coercive interference. It's impossible to have a truly free market - i.e., a market that is free from coercive interference.

According to the view being described, cartels and price-fixing are not coercive interference, unless they are being enforced by violence. If all the bakers in town agree to sell a one-pound loaf for one dollar, that is classic price-fixing. But it only becomes coercive if, when a new baker starts up selling for ninety cents, the old ones come round and threaten him. The peaceful cartel does no violence to its members or its customers -- after all, each baker individually has the right to sell for one dollar; no customer's rights are violated by the simple fact that no ninety-cent bread is available at time t. If a customer doesn't like it, he can set up his own bakery, or eat tacos instead of sandwiches. --FOo 12:55, 25 Aug 2004 (UTC)

But that confuses general coercion (ie, force) with specifically violent enforcement. Most generally mooted types of coercive interference by government do not, ater all, involve any violence, or even the threat of violence. There are many types of coercion. For instance, in the situation you describe, the cartel is likely to have a strangle-hold on the supplies necessary to bake bread. They use their position to prevent the suppliers selling those supplies to our naive new baker, by threatening to withdraw their custom. Thus they prevent, through coercion, any competition.

Again, this depends on your definition of coercion. A person who describes cartels as not inherently coercive simply means that the formation of a cartel can take place solely by parties entering willingly into mutual agreements. If the baking cartel has negotiated an exclusive contract with a miller (who sells wheat flour) then yes, any non-cartel baker will need to find a different flour supplier ... or perhaps make cornbread instead of wheat bread ... or perhaps become a greengrocer instead.

Indeed, the cartel monopoly may continue even if the miller has the legal choice to terminate the contract -- he may simply not choose to. Perhaps he regards his personal honor highly, and would consider breaking the contract to be breaking his word to the longstanding bakers in the town. For a new baker to demand that the contract be broken and the miller forced to sell him flour would indeed require coercion: since the miller does not choose to terminate the cartel contract, he would have to be coerced to do so.

The question then is whether an outside party who wishes to enter a market has the right to force others to break their established contracts and supply him against their will. This would seem far more coercive than the cartel situation in the first place. I understand that some argue that this "coercion" is better than the other "coercion", but that strikes me as a difference of taste. Some people find it more distasteful when a "naïve new baker" who doesn't understand the existing contracts in his chosen business fails thereby; others find it more distasteful when an honorable old miller is forced to abrogate his word and contract.

By the way, I would suggest that in a discussion where you are trying to distinguish coercion from violence, you should consider avoiding violent metaphors such as "stranglehold" to refer to nonviolent actions such as an exclusive contract. A stranglehold, after all, is a way of violently subduing or killing a human being. The cartel has not killed our would-be baker. He simply made an uninformed decision and took a business loss. He should have secured a contract for flour before buying a storefront and a big oven. --FOo 01:53, 26 Aug 2004 (UTC)

I'm still not sure exactly how it has been illustrated that a monopoly cannot exist in a actual free market (in the sense of one free from government interference). Are you arguing that Rothbard is wrong, and that a monopoly can indeed exist within a free market? Or are you arguing that it isn't a monopoly if all parties in that monopoly are willing participants? Or have I lost the thread of the argument somewhere? If you're arguing that Rothbard is wrong, I'm not really able to comment upon that and shall bow to your better-informed analysis. If I've merely lost the thread here, then I can but apologise.

If you're arguing the second, I would point out that parties who are not a willing part of any such agreement as you describe may nevertheless be bound by that agreement, and as such are thus surely subject to coercion regardless of how willingly the parties of the agreement entered into it. One could argue that (keeping to the hypothetical described) those affected by the shadey dealings of the bakers' cartel could move to a different town. But that again undermines the notion of coercisive interference being something governments do: Any government which intervenes in the operation of the market within its nation's borders is not using any coercive force as long as you are free to leave that country. It follows from this that, by choosing not to leave that town or country, the consumer of baked goods or citizen is effectively entering into an agreemnt with the cartel or government. So, if coercive interference doesn't exist in the free market, it doesn't exist in the regulated one either. Accepting that one can define coercion in different ways, however one chooses to define it, one must accept that it applies or does not apply equally to both the free and the democratically accountable market - if it isn't force when private monopolies do it, it isn't force when governments do it either. Again, we're left with a concept that doesn't seem to exist, a myth, a fruitful piece of spin in the service of vested interests.

It seems to me, still, that a free market as described by its advocates simply cannot exist. Adam Smith was wrong about the invisible hand. Both theory and experience shows this. The notion of a free market is a deceptive one - either such a market is subject to private coercion, or, as long as it remains democratically accountable, the regulated market is not subject to coercion. If one accepts that a free market is indeed subject to coercion but assert that such markets do exist, then the concept is no more than a semantic trick. If one accepts that the given concept of a free market is, shall we say, a Platonic ideal, and accepts the existence of private coercion in any actual free market (as described in the section that has been called into question), then surely the article as it stands is excellent and just. (I fear such acceptance, that the free market is merely an unreachable ideal, may be barely a step away from socialism.)

Finally, I assert my right to use metaphors in whatever way I choose and assume willing agreement that metaphors shall be taken as metaphors, and not wilfully mis-interpreted.

Oh, and: What if the bakers' cartel exploits its monopolistic position to purchase the facilities and resources of all of the suppliers in the area? Wouldn't that, if nothing else so far, call for some good old-fashioned trust-busting, in your view?

The indentation is getting extreme, so I'm going back to level 1.

My point isn't that a monopoly can't exist in a free market. It is rather that the existence of certain types of cartels does not rule out the existence of a free market on the terms used above. This follows from the fact that persons are capable of making exclusive contracts; which follows from the fact that persons are capable of giving their word. If you wish to be a baker, you need flour. To get flour, you need someone to be willing to sell it to you. If all the flour in your district is already spoken for under exclusive contract, you cannot buy flour in your district.

I disagree with your analogy with governments. It is true that if two persons make a contract or exchange, that contract does have opportunity effects on other people. I would not, however, characterize this as the others being "bound" by the contract. If you have a car for sale and I buy it, then no other person may subsequently buy it from you -- it is no longer yours to sell. The contract is exclusive; the others have lost out on an opportunity. However, this does not mean that the car's unavailability is coerced upon them. It is simply a brute fact, like the unavailability of 30°C temperatures in the out-of-doors in Antarctica. Those who want a car must find someone who is willing to sell; those who want to be warm should consider the tropics, not the poles.

The hold that government has over territory and persons is not much like the unavailability of flour around the bakers' cartel, or the unavailability of your car after I have bought it. First off, these unavailabilities are consequences of agreements freely entered into. Except in the falsified history told by "social contract" theorists, this is not the case with government. Second, your inference that intervention is not coercion if you can leave the territory is a non sequitur. What makes an action coercion is not whether it is escapable by another, but whether it is imposed upon another. Considering opportunity costs (like the car above, or the flour) to be coercions leads to a bizarre world in which every action is a coercion of infinite scope, since every action cuts off an infinity of opportunities. Such a world is perhaps amenable to Foucauldian power discourse; it is not amenable to free-market or socialist economy. Ruling opportunity costs out as coercions avoids this absurdity.

To make this all more abstract: If Joe wishes to do things which require others' participation, then he has a number of choices: he can convince them to agree to participate willingly; he can force them to participate with intimidation or violence; he can give up on his original plan and decide to instead do things that people will go along with; or he can sit down and sulk till he starves. I propose that freedom-loving people, whether they call themselves "capitalists" or "socialists", regard the first as good, the second as bad, the third as good, and the fourth as bad. No?

--FOo 05:33, 26 Aug 2004 (UTC)

Comments on re-edits by Mihnea

Mihnea re-added some stuff, so I thought I'd explain why I took it out.

I'll explain why I re-added each bit under each of your comments. - Mihnea Tudoreanu

• I'm still not sure what government ownership of service means.

The phrase is not my own, but as I see it, it refers to government ownership of utilities, and/or the government providing various free services to its citizens.

• no artificial monopolies (i.e. patents) -- I took out patents because I thought it was controversial whether they count as artificial monopolies, although I am sympathetic to the argument that they are. Anyway, there are certainly other things that could be considered artificial monopolies, too.

I think at least one example of an artificial monopoly should be given. You're welcome to replace "patents" with something less controversial - or perhaps we should replace the "i.e. patents" with "such as patents, according to some opinions".

• The theory of the free market has trouble explaining the performance of many real markets such as the labor market, or financial markets. It explains better the markets for consumer products. This is an awfully broad statement to make without some kind of attribution. I would go so far as to say that I think it is untrue. But then, I have my own POV. I would at least like to see a little explanation and attribution on it if it's going to be in the encyclopedia. Also, the definition we give in the article lists "free market" as conceived-of condition, rather than a theory, so it's not clear what "the theory of the free market" means in this context.

Again, I wasn't the one who wrote that sentence. I just re-added it, because I thought it was useful. The idea that should be conveyed is that free market principles are geared towards the market for consumer products rather than the labor market or financial markets.

• The economic and political application of the concept of the ideal free market is known, primarily by detractors, as neoliberalism. I don't think it's accurate to state this as a 1 to 1 correspondence. For one thing, there are lots of schools of thought that are centered around the free market, libertarianism, etc., not just neoliberalism. And I tend to think of the latter as more of a pragmatic, realpolitik, hands-dirty version, anyway, rather than "ideal", although it's hard to get a read on what it really means. - Nat Krause 05:23, 27 Aug 2004 (UTC)

Well, the critics of the free market do call it "neoliberalism", and that is a fact that should be mentioned. I'm not saying that "free market" is the same as "neoliberalism"; I'm saying that "neoliberalism" is the name generally used for free market ideology by the opponents of such ideology. - Mihnea Tudoreanu

I made some edits to try to come up with neutral, acceptable language. I still feel that the "consumer markets / labor market" sentence was iffy, so I changed it around some and I think I can agree with its veracity now. I'm not sure it's true that opponents of the free market refer to it as neoliberalism generally, although they do sometimes. I recall during the 2000 presidential campaign hearing Nader and his supporters say on several occasions that neoliberalism isn't really the free market at all, but "corporate managed trade". - Nat Krause 07:45, 28 Aug 2004 (UTC)

You did a very good job at editing the article. I have no objections with its current form, so I think we can declare mission accomplished. ;)

As far as Ralph Nader is concerned, he never seems to make up his mind on whether he opposes the free market or not; he sometimes speaks of it positively, and I suspect that speech was one such occasion. - Mihnea Tudoreanu

Bullshit!

Yeah, that got your attention. ;) I think this article is way biased. It imposes extreme demands on what is a "free" market. In fact, the goverment are not allowed to tax people, but they are supposed to ensure property rights and contractual agreements. Well, that takes money. So then you must have taxes!

So, yes, with these definitions free market do not exist, BECAUSE THEY CAN'T. This definition of free markets is self contradictory and impossible. Or, in the words of Penn and Teller: BULLSHIT. ;)

A free market is a market that does not impose restrictions on who can enter the market and do not control the setting of price. That's it, really. I'd change it, but it requires quite a huge rewrite, so I don't have the time right now. Regebro 10:37, 2 Oct 2004 (UTC)

Edit: And yes, that IS a neutrality discussion, since this is a strictly extremist libertarian view of Free market, something not even most neo-liberals agree with. Regebro 15:43, 2 Oct 2004 (UTC)

Ironically you make the same sophomoric arguement that you complain about. Free markets are only an impossibility if you don't understand what the word means. (Gibby 22:22, 25 February 2006 (UTC))

Penn and Teller ("I'm crossing over from Libertarian to anarcho-capitalist and it feels good.")are libertarians (if you are British that means liberal) it is unlikely they have the same difficulty with the concept 'free market' as you do.Mrdthree 06:27, 11 April 2006 (UTC)

Some believe... Others argue...

Not exactly great sourcing on a very controversial matter. -- Jmabel | Talk 09:16, Oct 17, 2004 (UTC)

"Underground" economy

The article now says, 'Currently, there are no totally free or ideal markets in operation, other than in the "underground" economy.' I believe this latter phrase is wrong. How can one say that a market that may be subject to police harrassment and is incapable of freely sharing price information is an ideal free market? It will inherently be somewhat inefficient, probably more so than a typical aboveground market. I am inclined to delete that recently-added claim, but thought I'd post first and see if others have strong arguments to make a different change than simple deletion. -- Jmabel | Talk 20:14, Dec 13, 2004 (UTC)

I completely agree with you. Some also might say that a free market cannot exist without property rights protection, something an underground economy lacks.

I went to a garage sale the other day and bought a beautiful Noguchi coffee table. I was never harrassed by the police, and not once did I look over my shoulder out of concern. And, price information was freely shared. As far as efficiency, there's nothing about a free market that says it has to be efficient. A free market is just one where there's no coercion occuring taking place. So ....I'm going put it back in ...the underground economy is huge.

One freely made transaction does not make a free market. Reverting. -- Jmabel | Talk 07:01, Dec 16, 2004 (UTC)

It was a large garage sale and a lot of people were there. It was a free market. The underground economy is huge. Billions of dollars exchanged. The free market exists.

Billions of dollars? Wow, that's some garage sale... :-) Rd232 21:53, 20 Dec 2004 (UTC)

by the way, i used to mow lawns for a living in the free market when i was a kid.

The expression "free market" is often used to imply "perfectly free market", in the sense that there are no government restrictions to trade. Since any government activity (including national defence and policing) can be construed as interference with trade of private persons (eg in the lawn mowing business, the government impedes you from whacking all your competitors), this requires anarchy. In any case, the modern concept of an absolute "free market" ideal (as opposed to minimising unnecessary government restrictions, which could also be considered 'free market') derives from the the idea of perfect competition. Which among other things requires perfect information, so unless any (well, all) of you are omniscient, a perfect/free market cannot exist. (And if we did have perfect information, there would be no difference between a market economy and a centrally-planned one.) Rd232 21:53, 20 Dec 2004 (UTC)

Free markets don't require "perfect information." They just require freedom. (RJII)

Also, the government preventing someone from "whacking" their competitors is not intefering with free trade but protecting it, and ensuring that it stays free. Free trade is simply trade occuring without coercion. Coercive force is distinct from defensive force. (RJII)

"Free trade is simply trade occuring without coercion." Presumably you mean without illegitimate coercion, since you've just allowed the government to use coercion to prevent some coercion. But if the government may use coercion to prevent murder, why not to prevent say, hunger or child labour? The minute you say the government can do anything in a free market, you break down the (artificial) barrier between the economic and the the political. And with it goes any meaning for an absolutely free market, because it depends on a politically-mediated balance of interests. This is why in the long run successful economies tend to be democratic, because it is the most efficient way of ensuring both the balance of interests and a successful relationship between the economic and the political, and allows countries to strike different bargains (eg Norway/US). Rd232 09:33, 21 Dec 2004 (UTC)

You're not seeing that there are two kinds of force ..coercive and defensive. Defending the free market from initiatory force is not coercion, but defensive force. For example, the person who is trying to steal from you is using the coercion...he's initiating the force..he's the one trying to violate the free market. When you or the government, as your agent, knocks him down to repel him, you're not coercing him, but using force in defense against coercion. Think about it without using the word "coercion" for a minute... There are two kinds of force initiatory and defensive. A free market has no initiatory force. If the government steps in when someone is about to initiate force into the marketplace and repels him, the free market is still in progress...because the government didn't initiate force but responded defensively and counteracted it. (RJII)

Well, that has a certain superficial logic, but if you look deeper there's a can of worms. Coercion is about more than violence - it's about harm generally, including the threat of harm. Hence for example blackmail counts as coercion. But if you admit that, then coercion includes, for instance, exploitation of local monopolies. If I'm the only supplier of water in an area, let's say, then I can choose to charge, say 50% of local average income. Now you could argue that it's still a free market because you can choose to pay that or to go without water and die. But that's Hobson's choice. And as long as the barriers to entry which permit me to charge such prices aren't imposed by violence or by government (i.e. natural monopoly), then it's still a "free market" as normally understood. It comes back to perfect competition - in any other situation, market participants don't participate as equals, which gives some the ability to exploit others (extract economic rent), which is a form of coercion. The point being not that is fundamentally wrong, but that a simple definition using coercion is just that - simplistic. Freedom is not a simple concept; freedom is not (primarily) an economic concept. Rd232 14:33, 21 Dec 2004 (UTC)

That's true that coercion is about more than violence ..it's about the initiation of force whether violent or not. It would also include fraud (theft by deception). But, I think, when you say your water example constitutes coercion, I think you're going beyond the meaning of the word. It may be "exploitation" is some sense of the word but it's not coercion if nothing is done to the guy who wants a drink of water. There is a difference between refraining from assisting the guy by not lowering prices and actually coercing the guy. Also, as you said, one may construe it as a "Hobson's choice" but it actually is a free choice when it comes down to it. It's the guy's own biology that requests that he drink water. It would be a real stretch to say that his freedom is being restricted by his own desire to satisfy his biological urges. There is nothing about a "free market" that should imply what some may subjectively judge to be a "just," "fair," or "perfect" market. It's just one where people aren't subject to initiation of force. Maybe they should be subject to it in some cases ...such as in your water example. That is, maybe a free market isn't good or ideal. Maybe equal unrestricted freedom for all isn't a good thing. (RJII)

"There is a difference between refraining from assisting the guy by not lowering prices and actually coercing the guy." Semantics - you rephrased it from active to passive (from raising prices to not lowering). But substitute "the gun" for "prices" and see how it reads. Rd232 18:34, 21 Dec 2004 (UTC)

I'd say the same thing for raising prices. You aren't doing anything to the guy. The raising and lowering of prices is independent of him....you aren't interacting with him just by raising or lowering prices. (RJII)

Semantics... Guns don't kill (bullets do) - so it's OK to shoot at people, since it's up to them to dodge the bullets. (Yeah, there's a difference, but the point is the line between what's acceptable is not scientifically (or even economically) determined - its socially, ethically, politically determined. Rd232 20:16, 21 Dec 2004 (UTC)

Trying to avoid a formal dispute

Obviously, this anonymous editor is not going to give up on this point. I'd rather not stick a "disputed" tag on an otherwise good article over part of one sentence, edit wars solve nothing, and the only other person who has weighed in is also anonymous. I'd really appreciate some comment on this. I'm going to put a request at Wikipedia:Requests for comment. -- Jmabel | Talk 03:03, Dec 17, 2004 (UTC)

He seems to have a point. Personally, I would be looking at this more in terms of how to better place this information and state it more clearly. - Nat Krause 05:30, 17 Dec 2004 (UTC)

My point, though, is how is this significantly freer than most other markets? Most garage sales are ducking taxation laws: surely the threat (even if rarely executed) of prosecution for participation is not part of the ideal model of the free market. Garage sales aren't exempt from taxation, they are merely in violation of it. -- Jmabel | Talk 07:15, Dec 17, 2004 (UTC)

"Underground" is the wrong word here, since it seems to connote clandestineness. I would prefer "informal". [[User:Poccil|Peter O. (Talk, automation script)]] 08:34, Dec 17, 2004 (UTC)

Certainly less actively misleading... -- Jmabel | Talk 09:09, Dec 17, 2004 (UTC)

It comes down to definitions of freedom. If you define freedom as "freedom from government 'interference'", then the informal economy is freer than the formal one - QED. But most people would say that's a pretty strange (and very American) definition of freedom. See Amartya Sen ("Development as Freedom") and John Rawls. Rd232 21:59, 20 Dec 2004 (UTC)

People have different ideas about freedom, but in the context of the free market, it is reasonably clear. The main intra-concept debate would be the point that Jmabel brings up below: - Nat Krause 03:07, 21 Dec 2004 (UTC)

The issue is that even under a terribly American version of free markets, an ideal free market also assumes total information: awareness by buyers of all possible sellers and vice versa. The garage sale example lacks this completely. I do not see how ducking taxes at a garage sale better approximates the economic ideal of a free market than does a stock exchange, which is subject to taxation but approximates the total availability of equal information. -- Jmabel | Talk 23:51, Dec 20, 2004 (UTC)

Hmm. I'm not sure about your first sentence there. I don't think that the Austrian school model of a free market assumes total information, for one. Hayek &c. tend to see the market as leading to the production of information (via the pricing mechanism) rather than depending upon it. See also Dispersed knowledge in this regard. --FOo 00:04, 21 Dec 2004 (UTC)

The Austrian school addresses a more specific (and more meaningful) issue - what is the best system in the real world for processing economic information about prices, demand/supply etc? The argument is that the market - through its "dispersed knowledge" (today we might use an analogy with distributed computing) - is a better information processing system than central planning. This is a relative argument, and doesn't require the market to perfect, just to be better than alternatives. The way the discussion is phrased here, it's about unattainable ideals. Well if we talk about those, then its basic undergrad economics that perfect competition (the formalization of an ideal free market) requires perfect information. Rd232 09:24, 21 Dec 2004 (UTC)

We clearly are not reaching consensus, and we seem to have a slow motion edit war. RJII has now changed this to "There is no large free market economy in existence other than in the underground economy." RJII: what is your example of a large free market in an underground economy? You are editing without discussing, and unless you can justify what you are saying, I am going to feel very free to revert. -- Jmabel | Talk 07:33, Dec 21, 2004 (UTC)

The underground economy *is* an "example of a large free market." Could be up to a $1 trillion economy according to some estimates. Government is not taking a cut (or otherwise intervening (though it would like to)), and the transactions are voluntary. (RJII)

The underground economy as a whole??? So when a drug dealers and prostitutes bribe policemen that is part of your idea of a free market? Illegal immigrants in sweatshop labor, threatened with deportation if they leave? Loansharking, with the threat of broken knees if you don't pay back? What a lovely ideal free market! These are lesser issues than a sales tax? I repeat my question: what is your example of a large free market in an underground economy? -- Jmabel | Talk 20:57, Dec 21, 2004 (UTC)

"All of the underground economy that consists of trades to which the parties mutually agree and government isn't able to intervene" is my answer to your question. Anyway, there's nothing about a free market that says it has to be ideal (your ideal), good, or preferable. You might not like allowing "trades to which the parties mutually agree and government intervention doesn't occur" but that's just what a free market is. Maybe you have it in your head that a free market is a "fair" or "just" market? That's not necessarily the case. Most people prefer relatively free markets, in accordance to their own tolerance for the freedom of others. (RJII)

Are you saying that a market is "free", despite threats of force, as long as those threats don't come from a government? This is ridiculous. -- Jmabel | Talk 21:33, Dec 21, 2004 (UTC)

No, re-read what I said for the answer to that. Getting someone to "trade" with you by threatening force is not free trade, whether that threat is coming from government or a person. When coercion is involved, it's not a "trade" to which the parties "mutually agree." (RJII)

(I'm picking up this thread below). -- Jmabel | Talk 22:20, Dec 21, 2004 (UTC)

It would be be helpful if people were clear that "free market" is a relative term, there being no absolutely free market except under the trivial definition of a lack of government interference. Rd232 09:24, 21 Dec 2004 (UTC)

It's almost always used as a relative term, at least. And yes, people should recognize that but they usually don't. One of the first objections you hear directed at someone who says he favors free markets is invariably "There's no such thing as a free market." Ridiculously trivial. (RJII)

It's worth making the point that much of this debate arise from the term "free market" itself, which is a very loaded term because it deliberately mixes two sense of freedom - the technical "free" (eg from added preservatives") and the politically "free", which has all sorts of connotations. So it's deliberately built into the term that in any given situation people will be on the back foot arguing against a "freer" market, because who could possibly be against that? Whereas if we spoke more neutrally of a more or less regulated market, or in terms of various economic criteria of how well a market functions (of which "freedom from unnecessary government interference" and "freedom from corruption" are but two aspects), it's quite a different context. In general, the term "free" market elevates one aspect of markets over all others for ideological reasons. Rd232 09:45, 21 Dec 2004 (UTC)

Let me try this from another angle. My model of a rather free, aboveground market would be exchange of U.S. dollars for Euros. To what extent is that not a free market? -- Jmabel | Talk 21:02, Dec 21, 2004 (UTC)

Well, according to the idealized definition in the article, it's a truly free market transaction only when government isn't able to take a cut of the capital gain when you sell the Euros at a higher price. Currency trading does indeed take place in the underground economy to avoid this intervention. (RJII)

Picking up thread: It seems to me that the disagreement I'm having with RJII comes down to this: he seems to be almost entirely focused on one way in which markets may be unfree -- taxation -- and I feel that other factors may often be far more important in distorting a market away from an economist's model of a free market. I think that the right to take this up in the article is to discuss various factors that make markets deviate from the ideal model. I believe it is little more than minarchist political polemic to focus entirely on this one factor. I also believe that governments (and other institutions such as stock exchanges) can facilitate free markets (both by preventing fraud and thereby removing a major risk of participating in such markets and by making it easier for buyers and sellers to find one another) as well as interfere in them detrimentally. I don't think that a throwaway remark suggesting that underground markets are somehow freer illuminates anything: I give several examples above of ways that underground markets may be highly subject to coercion. -- Jmabel | Talk 22:20, Dec 21, 2004 (UTC)

"Informal" vs. "underground"

Can we at least agree that we are talking here about informal markets, ones that are basically tolerated though not strictly legal, rather than underground markets, ones that are specifically clandestine? That would reduce the disagreement, from my side at least. -- Jmabel | Talk 21:36, Dec 21, 2004 (UTC)

But even these trades that are "tolerated" are only so because it's too impractical or difficult for government to intervene --the rest of them are not stopped or taxed because government hasn't managed to find them. "Underground economy" is even the term used by government (including the IRS) to describe this economy that is "under the rader," so to speak. And they're not referring to coercive activities, but simply trades from which, for various reasons, they aren't able to tax. Are the coercive activities on the part of individuals that you speak of part of the "underground economy" anymore than they're part of the "aboveground economy"? Is coercion between individuals an "underground" activity? Maybe, but then that's just because it's legally prohibited, but I'm hesitant to say it's part of the underground economy... because again, "underground economy" typically isn't referring to activities such as holding a gun to someone's head and demanding his money, for example. It's just referring to trade that the goverment isn't able to tax. And, the whole of these trades which are devoid of coercion meets the criteria of a free market as posited by the definition in the article. (RJII)

The free market is a mathmatical construct that does not exist in reality, underground or otherwise. The construct gets perturbed by transaction and information costs, imperfections and inequalities. Markets are natural phenomena that occur under certain social conditions that have been worthwhile studying mathmatically, thus we get the useful abstractions studied in field of micro-economics. I tend to think the statement that underground economies are the only truly free ones is a bit much.--Silverback 03:50, 22 Dec 2004 (UTC)

Where is the "level playing field" in the underground economy? Because it is "underground", information about prices and product quality is more expensive and unequally distributed, it has a difficult time competing with the overt economy where the overt economy is allowed to compete, despite the disadvantages the overt economy has in taxation and regulation. Where it does compete with the overt economy it is only in those areas where the taxation and regulation burden is so high that the advantages are obvious, such as tax free cigarettes, or easily evaluated post-paid services such as lawn mowing, where overt economy goods and services are so overpriced.--Silverback 05:33, 22 Dec 2004 (UTC)

My "level playing field" idea was supposed to be accompanied by the caveat that players may have very differing skills and endowments; but I forgot and went to bed. I highlight a phrase I'm removing "A level playing field is defined as one where no player is allowed more liberty than any other player." as beautifully illustrating what happens when you take the idea of a "free market" ad absurdum. The sentence could equally well (probably better) describe socialism. Note also that the "contract enforcement" part of the intro tends to imply perfect contracts, since otherwise value judgements will need to be made by judges, which probably shades into what RJII considers (or at least repeatedly defines as) government coercion. Rd232 09:40, 22 Dec 2004 (UTC)

For once, Silverback and I seem to agree. But I'm not sure either of us have the patience to keep reverting RJII, who seems to prefer inserting his/her somewhat idiosyncratic views into the article, with or without consensus, rather than discuss the matter. -- Jmabel | Talk 07:14, Dec 22, 2004 (UTC)

He also seems to insist on viewing government in a feudal way (hence going on about coercion) instead of in the modern social contract sense. Hence my my attempt to NPOV this by putting it in game theory terms. Rd232 16:45, 22 Dec 2004 (UTC)

The "contract" erodes when the courts and police are lawless and let erosive precedents propagate like computer viruses. Super majority protections of the rights of individuals and minorities have gone out the window. It is still coercive. What RJII doesn't get is that, if so motivated, the government can actually take steps that lower information and transaction costs and correct for externalities.--Silverback 17:06, 22 Dec 2004 (UTC)

Not really sure what you're saying, but I'll say that if coercion exists, then it's not a free market. (RJII)

I'll go even further, if a market exists, it is not a free market. A "free market" is a mathmatical abstraction, which is why the underground market does not cut it either, it has transanction and information costs and externalities, like any other.--Silverback 18:46, 22 Dec 2004 (UTC)

The game section is ok with me. But, the point is, a free market doesn't really have anything to do with government. It's just a market where coercion isn't occuring. If there is a government, then it can't coerce either. (We're talking about a truly free market) Anarcho-capitalists, for example, believe in an overseer in the form of a business rather than government, so that it is funded by free market transactions, rather than taxation. A free market is just that ...a market where everyone is "free." (RJII)

"a free market doesn't really have anything to do with government". But property rights and contracts do not enforce themselves. I know of no examples of anarcho-capitalism. Nor is it clear to me that such taxation-less funding of government function is possible without corrupting the market. When a central bank sets interest rates, that's interest rate/exchange rate policy. When it buys and sells currencies, that's called market intervention. In any case, anarcho-capitalism is a tiny minority view and should not overwhelm NPOV in the introduction, which is what, RJII, you are doing. Rd232 17:11, 22 Dec 2004 (UTC)

But you have to keep in mind that we're talking about an ideal ..a free market. Sure, it seems unlikely that without a government people are going to freely trade for all eternity. Surely, someone will come along decide to coerce someone else. But it's not logically necessary for a government, or any other kind of overseer, to exist in order that people freely trade with each other. Establishing a government may just be a prudent thing to do given the human inclination to coerce his fellow man. Again, a free market is just one where people are trading without coercion intervening in the process. (RJII) (By the way, I obviously didn't inject anarcho-capitalism into the definition...i don't know how you come to that conclusion. I just brought it up to you to try to explain something). (RJII)

You can perfectly well have trading without coercion and without government in the modern sense; it just doesn't sound like a "free market". See eg Marcel Mauss' The Gift. ... You defend what I see as the anarcho-capitalist position of making it all about coercion. Rd232 18:14, 22 Dec 2004 (UTC)

"Contract" section was kind of pointless. A free market includes other economic freedoms besides having to do with contracts. (RJII)

Markets are fundamentally about contracts, implicit and explicit. Where goods are standardised, price may be the overwhelmingly most important element of the contract, but it is never the only element ("pig in a poke"). Put another way, name an economic freedom which has nothing to do with contracts. Rd232 15:48, 23 Dec 2004 (UTC)

Please stop trying to make the intro fit your POV. The article is quite long enough to accomodate a discussion of your arguments; the intro should be short and neutral. An equation of the idea that "an economy exists in a social context" with a "command economy" is plain, outright, irredeemably dumb. (We all do dumb things from time to time; let's everyone try and keep it to a minimum.) Rd232 15:48, 23 Dec 2004 (UTC)

I'm not trying to inject my bias into the intro but trying to make the intro neutral ,correct, and clear. Can you or anyone explain what is meant by an economy that exists in a social context? what does that mean? (RJII) 23 Dec

yeah, that's what i thought. (RJII) 26 Dec

I actually wrote a reply, but Wikipedia swallowed it (as it has several other things of mine recently when editing parts of a page), and I couldn't be arsed to repeat it. Try looking up social capital and sociology. Rd232 23:16, 26 Dec 2004 (UTC)

I don't feel like writing on this at length -- frankly, I've given up for now on turning this into an evenhanded article -- but here is a short version.

Like all human institutions, markets exist in a social context. In any given society there are not only laws but social norms determining what may be exchanged for money: for example, in medieval Europe, it was extremely exceptional (and often though disgraceful) to exchange land for money. Until slavery was abolished in the U.S., the market in slaves was a major factor in the U.S. economy; obviously, at this time, there would be almost universal condemnation of all trafficking in human beings.

More subtly, the very ability to meaningfully own property is dependent on society. In traditional societies with no formal notion of ownership, it is generally almost impossible to own something one does not directly use. For example, the abstract notion of ownership involved in stock shares -- or even bank deposits -- requires a very sophisticated set of social constructs going way beyond the individuals directly involved in the transaction. It involves both a social and a governmental notion of a very abstract concept of ownership.

I could (honestly) go on about this at much greater length, but is this enough to give you some sense of the meaning of that phrase? -- Jmabel | Talk 06:57, Dec 27, 2004 (UTC)

It does, thanks. But the writer was differentiating free markets from ones that "exist in a social context." What about a free market is not in a "social context"? (RJII) Dec 27

Free markets do not exist. Real markets are constrained and enabled by the fact they exist in a social context. See eg http://www.pubchoicesoc.org/papers/Berggren-Jordahl.pdf.

Theory

I see what's going on now. Somebody has confused the concepts of a "free market" with a "perfectly competitive free market," the latter being obviously more of an abstraction than the former. And this is throwing people off as I picked up on from the comment of 172. Those are two dinstinct concepts. So this section definitely needs a rework. In fact, a criticism of free markets is that they're not perfectly competitive --a criticism that is used by some to justify government intervention. They're both real concepts in economics, and I suppose it's fine to talk about the theoretical abstraction called "perfectly competitive free markets" but please don't confuse the two. (RJII) Dec 27

No. We have separate articles on market economy and free market. This is the article on free market abstraction used by economists. 172 16:58, 27 Dec 2004 (UTC)

Economists refers to "perfectly competitive free markets" to distinguish from the simple idea of a "free market." There is nothing about a free market that says it has to have perfect competition. The free in "free market" just refers to freedom, as in the lack of coercion. Take a look at this, for example: [[1]] After talking about pure abstraction of "perfectly competitive free markets" it says below that "free markets are not perfectly competitive." (RJII) Dec 27

Stop conflating this topic with market economy. This is the free market on which the theory of supply and demand is based, which assumes that markets are perfectly competitive, with buyers and sellers unable to influence the price of the good in each market on their own. Perfect competition and perfect information are not "criticisms" of markets; they are assumptions that are central to the elementary forms of supply and demand theory. Hence, market economy (reality) and free market (abstraction) are separate articles. 172 17:37, 27 Dec 2004 (UTC)

The problem is that without actually defining what Perfect Competition is you get the uniformed believing, literally, that it requires perfect competition and complete information which is NOT what Perfect Competition and Complete Information, actually mean. Stiglitz made this sophomoric arguement attempting to build a strawman out of free markets, the abuse of these words result in people automatically assuming that free markets don't work, without actually understanding the meanings. (Gibby 22:25, 25 February 2006 (UTC))

Of course. The Nobel prizewinner and former Chief Economist of the World Bank is "sophomoric", but Gibby will set him straight. -- Jmabel | Talk 06:33, 9 March 2006 (UTC)

I never said that perfect competition was a criticism of free markets. I said that the lack of perfect competition was a criticism. A free market does not assume perfect competition...it just assumes a market devoid of coercion. You have to take it to another level of abstraction for "perfectly competitive free markets." Let's not muddle this up so this article can actually be of value to someone. (RJII) Dec 27

Of value to Randroids? 172 19:48, 27 Dec 2004 (UTC)

I see no reason this article can't discuss both the economists' abstraction and various approximations to it in the real world. It certainly should discuss the economists' abstraction, though: where else would that go? -- Jmabel | Talk 19:53, Dec 27, 2004 (UTC)

The free market is an abstraction. A free market that is also perfectly competitive is a further abstraction. Perfect competition has its own article, so I don't see a necessity to go into it in any detail in this article. I wouldn't oppose it though. (RJII) Dec 27

Jmabel, please take a look at the content deleted by RJII. I can't restore it due to the 3RR. 172 20:11, 27 Dec 2004 (UTC)

Sorry, but I'm staying out of editing this until RJII is finished for a while. I've made it clear that I think he's taking it the wrong direction, that I think his edits are ideological, etc. I'm not interested in continually fighting about it. I'll see where he takes this, and then respond to something like a finished article, instead of arguing one by one about edits I see as bad. -- Jmabel | Talk 20:20, Dec 27, 2004 (UTC)

Ideological in what way? As in being anti or pro free market? I'm making the point that the ideal of a free market isn't perfectly competitive (it's just a market where traders are free). "Asymetrically distributed knowledge," for example, is cited in the article as something that some see as a problem with having a absolutely free market (the idealized abstraction). Therefore, some may advocate intervention to make the market more fair, just, or more perfectly competitive. I don't see any ideology in saying that. I'm not saying an free market is a good or a bad thing. It's just pointing out the truth as far as I can tell. (RJII) Dec 27

Ideological in that you seem to be assuming that taxation is the main way in which markets become unfree, and that any amount of taxation is enough to matter in this respect. By the way, why are you now editing this anonymously? -- Jmabel | Talk 22:59, Dec 27, 2004 (UTC)

I think your mistaken to think that is an assumption of mine. We are talking about an ideal and I'm just trying to be inclusive to all types of intervention into the marketplace. The minute you say a free market can have taxes you're going to have people arguing that it's therefore not a truly free market. And you'd have to admit they're correct. So to be accurate, we'd better stick to the pure idea of a free market as far as definition is concerned, and mention in the article, as I have, that when people say they favor free markets, they are usually speaking in a relative sense rather than the idealized sense, and would therefore settle for taxation to protect as much economic freedom as possible, since it's the view of many that a market without taxation to finance the protection and continuance of it may not be sufficiently free for very long. ...as far as editing anonymously, i just forget to log in every once in awhile. I don't want to store my password since I'm not on my own computer right now. ..there's nothing underhanded going on, ok? (RJII) Dec 27

RJII often ends up implying that a "free market" is something primordial that exists before aliens invade and impose government on the free-market Shangri-La Earth, the bastards. As I've said before - a point RJII appears to miss - a free market is both an absolute ideal (in which case it is identical to perfect competition model) and a relative term ("pretty free, compared to other existing markets/economies"). In the first sense it is redundant and imprecise. In the second, it is often used as propaganda - because implying that ceteris paribus a "freer" economy must be better than one that is less "free", no? Rd232 01:17, 28 Dec 2004 (UTC)

RJII has stated clearly not that the free market is something primordial that exists but rather something primordial that does not exist -- i.e., an abstract idea. The difference is that he uses a different definition of the absolute ideal than you do. In my opinion, he's right, but I have no idea how to amicably settle a dispute that hinges solely on the definition of a word or a phrase. - Nat Krause 03:16, 28 Dec 2004 (UTC)

I made an attempt to de-propagandize the article, but far more work is needed. This article will probably have to be rewritten entirely. 172 02:50, 28 Dec 2004 (UTC)

I generally agree with 172's recent edits, except for the definition he is using of "free market". Not sure about plans for a rewrite, of course. - Nat Krause 03:16, 28 Dec 2004 (UTC)

Agree that 172's edits provide a much clearer description of the range of coersive influences. mydogategodshat 03:35, 28 Dec 2004 (UTC)

What can I say? Perfect competition is not a feature of a free market unless you call the market a "perfectly competitive free market." This article is about the concept of a "free market". A perfectly competitive free market is another concept. That would be a free market with the quality of "perfect competition" attached. It does no good to muddle things together. I'm just hoping it eventually sinks in to the few of you who haven't been able to grasp this. (RJII)

The page has now been protected. RJII will now have to stop edit warring and inserting Randroid POV without dealing with the objections of Rd232, Jmabel, mydogategodshat, me, etc. on the talk page. 172 04:30, 28 Dec 2004 (UTC)

What a cop-out. (RJII)

Now, then, let's everybody keep talking. On the main issue, I agree with RJII. The free market is an ideal form, but the thing that is theoretical about it is perfect freedom, not perfect competition. However, neither my definition, nor RJII's definition, nor 172's definition is by itself authoritative. We should discuss how to arrive at a definition that is authoritative. - Nat Krause 12:25, 28 Dec 2004 (UTC)

"the thing that is theoretical about it is perfect freedom, not perfect competition." strengthens my thought that the problem is that there are two competing conceptions of the term, one of which is fundamentally political (it's all about freedom; it's a system with no government), and one economic (it's all about competition; it's a system without any barriers to competition, including, at the limit, all the perfect competition requirements). The two conceptions get bundled up together, which (plus the bundling of absolute and relative usage) creates much of the confusion. Question: What do we mean by 'market'? - sector/industry or economy? Worse, What do we mean by 'freedom'? Rd232 16:46, 28 Dec 2004 (UTC)

What I understand "freedom" to mean is the act of one doing what he wills with his body, or anything else that is "his," without being prevented by the physical force, threat of force, or deception (fraud) from anyone else. In a word, acting without coercion. I think is the notion of freedom that is behind the concept of "free" the in term "free market." Does "free" in "free market" mean anymore than that? I don't think so. (RJII) Dec 28

Could somebody also state clearly and unambiguously the coercion-based definition, in particular, what the role for government is and how it is financed. Past attempts have sounded like "government stops 'coercion' but nobody pays for it" - a free lunch. (Which would fit with the Walrasian auctioneer I suppose...) Rd232 16:46, 28 Dec 2004 (UTC)

I don't think practical issues need be or should be in the definition. It's a concept of an ideal. If the real existence of the ideal seems to not be a practical possibility, so what? Figuring out how a free market can be protected without compromising it is a practical problem. Whether or not government can protect the freedom of market participants without compromising perfect freedom is a practical problem so it's not really our obligation to solve it. We're just presenting and labeling the idealized concept. (The same goes for ""prefect competition"...how is that going to be implemented?? Likewise, it doesn't matter.) But yes, your practical concerns are interesting and it would make sense to address them somewhere in the article. It just shouldn't interfere in presenting an understanding of what a free market, theoretically, is.(RJII) Dec 28

It is an integral part of your conception of a free market that the government prevents coercion and deception [I don't think the former includes the latter, though apparently you do], yes? If you define away all possibililty of this being paid for, that is NOT a "practical" problem, it's a theoretical problem! I might as well as say, well, "I have this theory where four plus four equals five; yes, I know there are "practical" problems with that, but it's still a useful theory, honest!" Incidentally, the article says the concept is "useful in understanding real markets". How exactly?? Rd232 18:46, 28 Dec 2004 (UTC)

Look, why don't we just define a free market, then talk about it, then later in the article, if someone wants, they can say something like "Besides the concept of a free market, there is another abstraction which economists employ to understand markets which is known as a "perfectly competitive free market." An idea of a market that is based on simply, "perfect freedom" (the term Nat Krause used above) does have a name. And that name is a "free market." Don't think for a minute that that concept has existed without it ever being named. Perfect competition is another concept. And when the two concepts are merged you have an economists' abstraction called a perfectly competitive free market. (RJII) Dec 28

An incoherent and illogical definition is no use to anyone. And how on earth can you use a term like "perfect freedom" without having philosophical spasms about what the hell that means, and whether it's possible even in theory never mind practice?? There are two definitions of "free market" that make sense to me: perfect competition, and the relative usage equivalent to "fairly free" and basically meaning contemporary capitalism. The RJII definition (Randist AFAIK) is specifically aligned to a particular political POV. If we could develop competing usage of the term instead of an authoritative definition of the concept, we might get somewhere. Rd232 18:46, 28 Dec 2004 (UTC)

The problem with that is we're not talking about a "fairly free" market, but a "free market"...an ideal. A "fairly free market" is not a "free market." When you draw a circle, for example, what you are really drawing is an approximation of a circle, rather than the ideal of a circle. A circle needs to be defined, whether it's possible to draw a perfect one or not. You don't define a circle by telling people that a circle is an approximation of a circle. Because that still leaves the question, "what is a circle?." Likewise, a free market needs to be definined whether or not it's practically possible to reach that ideal. Do you want an article that says a free market is an approximation of a free market? It wouldn't make sense without first defining what a free market is. (RJII) DEC 28

Why should "perfect freedom" allow any room for government, including prevention of coercion/deception? The only straightforward reason draws us in the direction of perfect competition. An alternative justification might be more philosophical, and if explicitly stated that would help. Rd232 18:46, 28 Dec 2004 (UTC)

You seem to want to make the concept of a free market have something explicitly to do with governments. But it doesn't. Government is what some people wish to use to put into practice the approximation of a free market. Still others wish to use government to put into pracice the approximation of a perfectly competitive market. But the idea of government really has nothing to do, per se, with the concept of a free market. As I said earlier, a discussion that has to do with governments and practice is fine for the article, but it's a separate problem than just defining a free market. As I said above, you can't understand what a "relatively" free market is, without understanding the what a truly, or "absolutely" free one is. (RJII) Dec 28

It is actually easier to define a relatively free market, because you avoid the contradictions involved in the asbolutisms proposed so far. You define a free market using the concept of coercion being prevented by government. A relatively free market is where the government does little else besides this. Rd232 15:53, 29 Dec 2004 (UTC)

As I said, you can't know what "relatively free" means without first knowing what "free" means. Economist abstractions are just that ..abstractions to an ideal. After you know what an absolutely free market is, then you can say that the colloquial use of the term "free market" just refers to relative economic freedom, rather than the concept of the absolute. That's how its been for awhile already with little problem ..i think it's fine in that regard. The reason it's locked is because of user 172 wants to say that a free market requires perfectly information, etc, (perfect competition), and I disagree. ..which is kind of strange because he hasn't been engaging in the dialogue. (RJII) DEC 29

So when is the article going to be unlocked so we can start "warring" again? (RJII) DEC 29

When we agree on a definition here. Rd232 15:53, 29 Dec 2004 (UTC)

Usage:

• absolute (i): Perfectly competitive market: perfect competition
• absolute (ii):Free market: absence of coercive influence over individual economic decisions.
• relative: eg "a free market economy" - a term frequently used in a loose sense to refer to an economy where the market is relatively free, as would be the case when an economy is overseen by a government that practices a laissez faire economic policy; contrast with command economy, where relatively unfree.

Free market and Fraud

A fraud is not consistent with a free market. In a free market you voluntarily pay for goods that you want, free of coercive influence. Consider this real-world example that actually happened to a friend of mine. A guy on the street in Manhattan was selling what he termed "VCR's." They were in sealed boxed labed as "VCR's." She made a purchase. She then returned home, opened the box, and alas, there was nothing but a brick inside. So, it was not a voluntary purchase. She did not volunteer to buy a brick; she volunteered to buy a VCR. Essential to a free market is that people make trades that they volunteer to make. The guy took her money in a way that was not consensual. If you want to use some ultra-strict definition of "coercion" to only include physical force fine, but that's not all that a free market is about. It's about people interacting and trading on a voluntary basis. And, to act on a voluntary basis naturally means that coercion and fraud are not involved. RJII 18:13, 3 Jan 2005 (UTC)

BS. Unless the guy puts a gun to her head and says "You're going to buy this box, which I claim contains a VCR but I won't let you check", it's a voluntary transaction. It's entirely your friend's choice to buy a pig in a poke from a vendor of questionable trustworthiness. Caveat emptor, end of story. Rd232 19:20, 3 Jan 2005 (UTC)

No, it's not a voluntary transaction, but a coercion-free transaction according to your definition of coercion. Coercion, using your preferred definition, is only one way to thwart voluntary trade. RJII 19:36, 3 Jan 2005 (UTC)

And how is it involuntary? By your definition, anytime you don't get exactly what you want in a transaction, it's involuntary, because if you'd known, you wouldn't have made the transaction! Rd232 20:07, 3 Jan 2005 (UTC)

You're influenced by your old (and wrong) conception of coercion excluding fraud; and free markets being free of coercion. As we clarified on coercion, coercion is about threats, and does not cover deception or exploitation. A free market is about exchanges entered into freely; this perfectly well permits mistakes voluntarily made by the buyer, such as choosing to trust a fraudster. Rd232 19:20, 3 Jan 2005 (UTC)

By the by, there's a basic logical fallacy here, isn't there? If we find some way to prevent fraud in a free market (and we must, because otherwise it will exist and it won't be a free market anymore by this definition), we can only do this by preventing people from freely defrauding others. Which is itself an infringement of the "freely transacting" core idea. Rd232 19:47, 3 Jan 2005 (UTC)

Nonsense, free trade must be voluntary trade. I made the point above and you were not able to counter it. "Fraud" is going back in. RJII 19:30, 3 Jan 2005 (UTC)

Your simply saying so does not make it so. Please explain precisely how your friend's transaction is involuntary. Exactly when did the fraudster take away her ability to voluntarily walk away from making the purchase? What stopped her demanding to see the box opened? Or the VCR demonstrated? Or rejecting the man as dodgy and going to a shop with a well-known brand that many people trust; or her next-door neighbour down the road she's known for years who's getting rid of his old VCR; etc. Your example demonstrates the importance of trust to an economy. The transaction was entirely voluntary. The fact that it was based on a false premise doesn't invalidate that. It's her responsibility to check her premise, not the free market's. I'm sorry if that conflicts with your conception of the free market as the embodiment of perfection, but that's not my problem. Rd232 19:47, 3 Jan 2005 (UTC)

Already explained. She didn't volunteer to receive a brick. RJII 20:04, 3 Jan 2005 (UTC)

In a sense she did. Unless you restrict free markets to a world of perfect information, we have risk and uncertainty. Every voluntary transaction includes the risk of not getting what you wanted. You nonetheless make transactions because the risk is worth taking. Sometimes you underestimate the risk; life goes on. In a risky world, she transacted for a risky transaction - for the possibility that the VCR would have a slight scratch; or not be the latest model; or not be compatible with her TV; or made of solid gold; or not be a VCR at all. In a risky world, she transacted for a measure of risk. The fact that she apparently didn't estimate or value that risk appropriately does not make it an involuntary transaction. Rd232 20:14, 3 Jan 2005 (UTC)

More formally, every transaction includes an appropriate discount for the risk of non-fulfilment. For a big financially-stable company that offers a money-back guarantee, the discount is low, so I pay close to the absolute value I place on the good. For a street vendor, the discount is much higher. If I over-pay (eg at auction because of infectious enthusiasm from other bidders) and don't apply the discount I should given the risk I estimate (or if I underestimate the risk), that doesn't make the transaction in the slightest bit involuntary. Rd232 20:31, 3 Jan 2005 (UTC)

Also, your ridiculously restrictive definition of coercion in the coercion article doesn't even account for theft, so we need to include "theft," without fraud, in the free market article as well. RJII 20:21, 3 Jan 2005 (UTC)

It's not "my" definition, it's the correct/standard definition. And theft is covered in the free market idea of freely transacting, because if someone nicks my car, by definition he hasn't got my permission and it's not a voluntary transaction. Rd232 20:31, 3 Jan 2005 (UTC)

What we have in this example is not coercion in the sense of violent force. It is, rather, a breach of a promise; a violation of contract. John promises to deliver a VCR, not a brick, in exchange for Mary's money. Mary, in exchange for the promised VCR, turns over the money to John. John fails to deliver. John has, here, stolen from Mary -- he has stolen the fulfillment of the contract, which is Mary's property by dint of her having purchased it from John. As I understand it, in a Nozickian free-market anarchy, Mary would here be justified in using or threatening force to get her money back.

The act is theft because it is an intentional deprivation of something that Mary negotiated for and purchased. Caveat emptor is a pragmatic rule, not an ethical one. It is a rule of thumb for avoiding the unpleasantness of having one's rights violated -- it is not a justification for others to violate rights. (Consider: It is worthwhile for people to be suspicious of ticking, smelly packages because they might be bombs. A person who fails to do so is a fool. However, it is just as wrong to blow up fools as it is to blow up wise people. Likewise, a wise person avoids being defrauded; but defrauding a fool is still wrong.)

If the claim "This box contains a VCR" were not connected with John's selling of the box, then John would not have stolen from Mary. For instance, suppose John and Mary together discover an abandoned box labeled as containing a VCR. John does not want a VCR, and so sells his share of the discovery -- sight unseen by both! -- to Mary. It turns out to be a brick. Too bad! John has not stolen from Mary in this case. --FOo 19:43, 3 Jan 2005 (UTC)

I just changed the term "fraud" to "theft." Most everyone agrees that fraud is stealing so it's inclusive of "fraud." But if anyone wants to get into a ridiculous debate whether fraud is theft, feel free. RJII 20:45, 3 Jan 2005 (UTC)

Yeah, those wacky ol' lawyers, having different criminal offences for "theft" and "fraud". Whatever. Rd232 22:28, 3 Jan 2005 (UTC)

If you want to talk legal terms then it's called "theft by deception." RJII 23:33, 3 Jan 2005 (UTC)

Wow. I'm amazed. I look at the above debate and have to say RJII is being the voice of reason! I can't believe that people are arguing that a market with massive fraud can still be a "free market" in a meaningful sense. And putting it in the article! Oh, well, I've already got a "disputed" tag on this article, so I can't add another one... -- Jmabel | Talk 06:29, Jan 4, 2005 (UTC)

Hey, that's pulling a fast one. I said the absolute definition of a free market allows for the possibility of fraud; indeed, doesn't allow for any mechanism to eliminate it. If the resulting idealised model isn't a "meaningful" free market, that's an inherent contradiction in the concept of an "absolute" free market. As RJII has repeatedly pointed out, "free market" is different from "perfect competition"; in the latter we make declarations about optimality on the basis of clear assumptions; the absolute free market in the sense of RJII is just self-contradictory hogwash. Clearly there is room for, say, a "minimal government" definition of free market, including the prevention of fraud and coercion, but that's not palatable because it admits the need for a government. Or is there some other magical way to prevent fraud? Rd232 09:43, 4 Jan 2005 (UTC)

Eventually you'll get a grasp on what voluntary trade means. There is a difference between a guy on the street selling you a box that contains a brick when you agreed to buy a VCR and a guy that actually sells you a VCR but doesn't mention that it's of shoddy workmanship and will probably malfunction in a few months. The former is clearly a form of theft. The latter is more typical of an example that would apply to "Caveat emptor" where people don't have perfect information. Theft is not consistent with a free market, but imperfect information is. There's a difference between imperfect information (not going into exhaustive and absolutely complete detail about a product) and misinformation (lying) to take someone's money. One is stealing and the other isn't..you guess which is which. RJII 16:26, 4 Jan 2005 (UTC)

Supra-economics?

Can someone explain the term "supra-economics" recently introduced into the article? If this is meaningful, I imagine it deserves an article. If not, it should be gone. -- Jmabel | Talk 19:14, Feb 2, 2005 (UTC)

"Supra-economics" and "supraeconomics" seem to fail the Google test. -- FirstPrinciples 08:29, Feb 3, 2005 (UTC)

I am deleting this, since no one has defended it. -- Jmabel | Talk 05:12, Feb 5, 2005 (UTC)

Democracy?

"The free market can be seen as a form of democracy because buying a product is an incentive for the producer to continue producing that product and thus a vote for continuation. This is also know as dollar voting." This seems to me to be a trivialization of "democracy". For one thing, it is only even vaguely democratic in a society where wealth is relatively evenly distributed; otherwise, it is a form of plutocracy. For another, it is a "democracy" that involves only voting and no collective deliberative processes: indeed, it may be subversive of deliberative processes. I would like to see this sentence struck, but brought it here first for, well, a deliberative process. -- Jmabel | Talk 19:44, May 8, 2005 (UTC)

Thanks for the deliberation. You're right, it is a form of plutocracy. I also pointed that out in the theory-proposal I put on the talk page (I just forgot to name it properly - corrected that now). But the term exists (just Google it), so there should be an article on it.

And if an article exists it should be linked to from somewhere. Until yesterday that was only from talk pages and such, not from articles. I edited in an unacceptable way a few weeks ago (I put an attempt at a theory on the article page) and nobody noticed for weeks (I've moved it to the talk page now). Now that I've put up some links I instantly got a reaction. Now there's only one place where I was quite happy to put the link, namely here. But just one link seemed a bit weak, so I also put it in vote, money and democracy. In neither of these it really fits in, so removing these would sooner be an option. But removing it there and here would again isolate the article.

I wonder now how I originally got to the page (I didn't start it). Maybe through a portal? Aren't those shown when you look at 'what links here'?

DirkvdM 06:58, 2005 May 9 (UTC)

It probably should be linked from plutocracy. And it should be mentioned and linked here, just not with an implication that it is inherently democratic. -- Jmabel | Talk 03:28, May 10, 2005 (UTC)

Hmmm, well, if so, then that should also be changed in the dollar voting article. However, the plutocracy article says that it means either an oligarchy, related to aristocracy, or political influence of the wealthy (companies) by financing political parties or threatening to move business elsewhere. In both cases it's about political influence by the happy few. One point that should indeed be made is that dollar voting may be akin to democracy but differs from it in that it applies to production rather than politics. But it is not restricted to the happy few. This applies only in so far as there are differences in wealth. We may be used to that, but one cannot assume it. You're basically attacking capitalism because it makes dollar voting less democratic (which leaves the question if the free market necessarily leads to capitalism).

One may conclude from the above that dollar voting is more like a meritocracy. But a strange one, because the merits gained in one field (production - earning money) gives more votes in another field (consumption - spending money). And that assumed that the money is earned, not inherited or stolen. And should doing dirty business (one way to get rich quick) give one more right to determine what should be produced? This is beginning to sound like a (leftwing) political pamflet....

In a way dollar voting is a stronger democracy than the one we're used to because anyone can vote (it's just that the weight of the votes may differ). The Greeks are said to have invented democracy, even though women, children and slaves were not allowed to vote.

So I now propose the following: The free market system functions in a way akin to democracy, but applied to production rather than politics. This is known as dollar voting. Buying a product is like casting a vote for the producer to continue its production. However, one may argue that this leans more towards plutocracy in so far as wealth is spread unevenly, giving the rich more votes. Notice that my first proposal put the free market in a positive light whilst this sounds more like an attack at capitalism (which the free market will usually lead to).

I see you've already changed 'democracy' to 'decision-making'. You might have waited for this discussion to come to a conclusion.

DirkvdM 08:49, 2005 May 10 (UTC)

If all we are talking about is what brand of soda gets a big share of the market, sure, that is relatively democratic, but if we are talking about the way that money, channelled through markets, leads to major, impactful decisions about the world, I am quite comfortable in saying that the effect is generally one of plutocracy, or at least skews that way.

Pretty much everywhere in the world where it is allowed to function, the free market does an excellent job of producing goods for the wealthy, a slightly less effective, but decent, job of producing goods for the middle classes, and it it is just about random whether it benefits the poor. Not having any significant amount of money with which to "vote", they become an externality: the market does not "care" about its effect on them. This does not mean that the effect on them will necessarily be bad, just that the market won't take it into account.

I thought about that too, but one should also take into account the various price-levels. Bread, for example, is something that one does not buy more because one is rich (unless a large part of the poor are so poor that they can't even afford bread). The rich may, however, buy different kinds of bread, at a different price-level. So, really, you get different types of products. The market for cheaper bread is played by the poor and the market for special bread by the rich (this is of course over-simplified). And you get something similar with more expensive products, to the point that votes for some products (eg yachts) come entirely from the rich. But that's no problem because they are the ones who use such products. So in this sense it's more specifically democratic than a political democracy. People vote just for the things that concern them. It might be better to say that the richer you are the more often you get to vote but a large part of those extra votes are used up for stuff that's out of reach for the poor (not just yachts but also the more expensive versions of products (tv's, chairs, hats, whatever)) and it doesn't apply as much to elementary stuff like bread. DirkvdM 11:52, 2005 May 11 (UTC)

Democracy is not simply about voting. It is, as its etymology suggests, about rule by the people. It implies equal voice in that rule. Certainly, the more evenly money is distributed, the more "dollar voting" has a democratic effect (in a still-stunted sense of democracy, lacking, as I remarked above, any deliberative processes), but that doesn't mean there is any inherently democratic aspect to dollar voting. One could with at least as much justice say that aristocracy comes to resemble democracy as the peerage becomes larger.

Once again, plutocracy is about keeping a part of the population out of government. If the peerage grows that group may decrease in size (from the vast majority to what? Half?) but the principle still holds (unless everyone is of nobility, in which case it would be nonsense to speak of an aristocracy). In dollar voting no-one is excluded in principle, the weight of the vote just differs (or rather the amount of voting).

By the way, a first past the post system is a bit like this too. How much your vote counts depends on the district you happen to live in. Is this then not democratic? I admit it's less democratic, but it's still a form of democracy. Like I suggested before, no existing democracy is fully democratic (everyone having a say in everything just wouldn't work in too big a society), they're all approximations, adaptions to make them more practical. But they're still democracies.

What do you mean by a lack of deliberative processes? I suppose you mean discussions about politics and products. Well, on the one hand there is way too little deliberation about politics for a democracy to perform at it's theoretical best - a intrinsic problem (people can't know about everything) that is, however, outweighed by the disadvantages of other forms of government. On the other hand, in 'dollar voting' there is deliberation through consumers talking about the pros and cons of products, especially now with the rise of the Internet (potentially a real saviour for the free market if you ask me). Or do you mean something different? DirkvdM 11:52, 2005 May 11 (UTC)

The plutocratic rather than democratic effects of democracy can be seen in any number of places. For example, democratic choice would certainly channel far more medical research into solving AIDS, malaria, dengue, etc. Indeed, the degree to which research goes into those areas is almost entirely the degree to which that research is protected from market forces.

Ah, you're talking about the whole world. In that case the differences in income are so humungous that there's little democracy left. But there's still a democratic aspect. If the money were more evenly spread that would certainly help for these problems. Same if there were a worldwide democracy. Which there isn't (the United Nations is the closest thing, but that's hardly a world government at the moment). So there's neither a political nor a financial democracy. Either of these would help. If money were more evenly spread that would certainly help where there's no political democracy. Which helps to prove my point, thank you very much :-). DirkvdM 11:52, 2005 May 11 (UTC)

For perhaps an even more intriguing example, where a relatively free market is almost certainly actively subversive of broad democracy, consider political campaign finance in the United States. The "wealth primary" (raising the money in order to campaign) is a near-perfect instance of how a relatively free market can have a plutocratic effect: the system works reasonably democratically within that class of people who finance campaigns, but relative to society as a whole the effect is clearly plutocratic. This seems to me an almost perfect illustration of substitution of a market in place of more traditionally democratic processes, and I think the only question is the degree to which the effect is plutocratic, not whether it is or not. -- Jmabel | Talk 05:56, May 11, 2005 (UTC)

You're right that it's a very bad thing that money talks in politics in this way. This is the second form of plutocracy that I mentioned above. Only a limited group of people have enough money to influence politics this way, meaning that a (large) group of people get totally excluded from that influence. But I'll again state the point that in the free market everyone with money has some influence. So here, there is a degree in which people have power. In a plutocracy there is no degree. Some have all the power and others have none. So plutocracy is not in any way democratic. The free market however gives some level of democracy. Only when some (many) have no money at all can you speak of a plutocracy. And at a global level the differences in wealth are indeed such that a plutocracy is approximated. But that doesn't disprove the democratic aspect of the free market. It's just a (major) flaw of capitalism. And thus a potential pitfall for the free market.

Let me try a different angle. I'm overall fairly left wing and certainly not a supporter of an unchecked free market. But we live in a free market society (even Cubans and Chinese do, despite the heavy socialism in those countries). That's unavoidable. The free market is not an ideology, it's a description of how society works. So we have to understand how this works. And if there is a democratic aspect to the free market then that may be exploited and we may change our policies to make the world (well, starting with one's own country) more democratic through a redistribution of money. And then let the free market operate within that framework. That's a bit left wing and a bit right wing. Just like me.... DirkvdM 11:52, 2005 May 11 (UTC)

"In a plutocracy there is no degree." Why on earth not? No system is ever pure, as instantiated in the world. If one demands equal purity to qualify as democracy, then clearly no democracies exist, let alone "dollar voting" constituting one. -- Jmabel | Talk 05:33, May 12, 2005 (UTC)

Actually, the few overt plutocracies I can think of all had degree: different levels of wealth for a voting franchise, for serving in each of several different political offices, etc. -- Jmabel | Talk 05:36, May 12, 2005 (UTC)

I based this on the Wikipedia articles. In the plutocracy article the first definition calls it an oligarchy, where "political power effectively rests with a small segment of society". So no degree there. The second definition is about the influence of the wealthy on politics. In principle that could be anyone with some money, but in practise at least 90% of the people will not have enough money to even start to make a difference. I assume. Maybe you're reasoning from a US perspective (assuming that we don't have that much plutocracy in Europe). I don't get that second bit. I suppose that by 'voting franchise' you mean the 'right to vote'. Are you saying there were (are?) occasions where the right to vote was distributed in various quantities to all people depending on how much money they had? (Which would be the equivalent of dollar voting.) DirkvdM 07:33, 2005 May 12 (UTC)

Absolutely. Property requirements for voting or holding office were quite common until rather recently. For example, Ancient Rome drew its Senators and Magistrates exclusively from the property-owning classes, with quite specific property requirements for various offices. Property requirements in order to vote were the rule rather than the exception in the U.S. until the mid-19th century, and in the UK a bit longer; I imagine the picture was similar elsewhere, but I don't know details offhand. I wish I had time right now to research this; I don't, though, and it's pretty far afield from the topic of this article. My central point is that "dollar voting" can only accidentally produce a democratic effect — precisely insofar as money is evenly distributed — but inherently produces the effect of turning money into decision-making power. And, yes, I would argue that the fact that the U.S. has more of a free market in financing political campaigns compared to the average European democracy is a very major component of why money has more power in American politics than in contemporary EU politics. -- Jmabel | Talk 16:36, May 12, 2005 (UTC)

Indeed this discussion is getting rather long and it's in the wrong place - it should really be moved to the dollar voting talk page. But back to the issue. Again you give examples of a select group of people holding all the power with the rest holding none at all. And that's plutocracy. But I was talking of 'occasions where the right to vote was distributed in various quantities to all people depending on how much money they had'. And that's an aspect of dollar voting; everyone gets a number of votes, but there is a gradual scale, not a clear cut between two groups of people, which is plutocracy. So dollar voting may not be purely democratic but it isn't purely plutocratic either. But a society can in practise be purely plutocratic but not (well, hardly) purely democratic. So since there are many variations of democracy it is easier to call this another variation. That's a bit weak, I admit. But it certainly isn't plutocratic. Then again, if I have to weaken the comparison to dollar voting having a democratic aspect, then I might as well admit that there is also a plutocratic aspect to it (or rather it leans towards plutocracy). Can we settle on that? Please? (This is starting to take up too much of my time too.) By the way, I don't contest that dollar voting inherently produces the effect of turning money into decision-making power. That's actually a good description of dollar voting. But my central point is that dollar voting produces a democratic effect insofar as money is evenly distributed. There, almost exactly the same thing you said.

To deviate a bit more, a pure democracy is actually possible. I've seen it at work at a rainbow gathering (a bunch of hippies). Someone would come up with a proposal and then anyone who wanted to participate in the discussion could. Including kids. But because a consensus has to be reached there, the discussions went on for ages (just like this one :-) ) and only those who were really interrested managed to sit through the entire discussion. Which never included kids. But that was just a few thousand people. I wonder what the upper limit of the number of people for this is. DirkvdM 19:44, 2005 May 12 (UTC)

Missing Criticism?

There doesn't seem to be any real response to the merits of a free market economy, only links to the articles of some alternatives. Where is the "criticism" section seen on the communism,socialism, etc. articles? Is there another article that deals with this, or should I add it in? --Brendanfox 11:18, 23 August 2005 (UTC)

There's some criticism in the "Practice" section. RJII 16:36, 23 August 2005 (UTC)

If you have well-cited material (e.g. Michael Albert's work, or a good discussion of externalities), I think that would be great. -- Jmabel | Talk 03:44, August 24, 2005 (UTC)

This is from the capitalism article if anybody wants to incorporate some of this in:

However, not everyone believes that a free or even a relatively-free market is a good thing. One reason proffered by many to justify economic intervention by government into what would otherwise be a free market is market failure. A market failure is a case in which a market fails to efficiently provide or allocate goods and services (for example, a failure to allocate goods in ways some see as socially or morally preferable). Some believe that the lack of "perfect information" or "perfect competition" in a free market is grounds for government intervention (see perfect competition). Other situations or activities often perceived as problems with a free market may appear, such monopolies, monopsonies, information inequalities (e.g. insider trading), or price gouging. Wages determined by a free market mechanism are also commonly seen as a problem by those who would claim that some wages are unjustifiably low or unjustifiably high. Another critique is that free markets usually fail to deal with the problem of externalities, where an action by an agent positively or negatively affects another agent without any compensation taking place. The most widely known externality is pollution. More generally, the free market allocation of resources in areas such as health care, unemployment, wealth inequality, and education are considered market failures by some. Also, governments overseeing economies typically labeled as capitalist have been known to set mandatory price floors or price ceilings at times, thereby interfering with the free market mechanism. This usually occurred either in times of crises, or was related to goods and services which were viewed as strategically important. Electricity, for example, is a good that was or is subject to price ceilings in many countries. Many eminent economists have analysed market failures, and see governments as having a legitimate role as mitigators of these failures, for examples through regulation and compensation schemes.

However, some economists, such as Nobel prize-winning economist Milton Friedman as well as those of the Austrian School, oppose intervention into free markets. They argue that government should limit its involvement in economies to protecting freedom rather than diminishing it for the sake of remedying "market failure." They tend to regard the notion of market failure as a misguided contrivance wrongly used to justify coercive government action to further various political agendas, such as egalitarian goals. These economists believe that government intervention creates more problems than it is supposed to solve --as well-meaning as some of these interventions may be. Laissez-faire advocates do not oppose monopolies unless they maintain their existence through coercion to prevent competition (see coercive monopoly), and often assert that monopolies have historically only developed because of government intervention rather than due to a lack of intervention. They may argue that minimum wage laws cause unnecessary unemployment, that laws against insider trading reduce market efficiency and transparency, or that government-enforced price-ceilings cause shortages. While economists tend to offer pragmatic arguments, some individuals put forth moral justifications for opposing coercion in favor of free markets.

Some dismiss the whole idea of "free markets", claiming that they are exploitative or coercive in essence. For example, some say that wages set by a free market rather than by government decree is exploitative since capitalists have appropriated private ownership of resources, thereby putting individuals in a position to accept low wages in order to survive. However, many believe that decreases in wage rates are the result of the same thing as deflation in any other market: the price of labor falls due to either a lower demand for labor or a larger supply thereof.

Financial markets, though some of these markets are far from being free due to heavy regulation, allow the large scale, standardized, and easy trading of debt, foreign exchange, and ownership of companies. Similar changes have taken place for products from agriculture, mining, and energy production. Standardized markets have even appeared for pollution rights and for the prediction of future events like future weather and political elections.

—The preceding unsigned comment was added by RJII (talk • contribs) 24 Aug 2005.

• Looks like there is some good material there for someone to incorporate, although I notice that the criticisms are uncited (all that is cited is the Friedman rebuttal). -- Jmabel | Talk 23:50, August 24, 2005 (UTC)

Weasel alert

"Others argue that the only fair market is a free market, since there is no coercion and one is free to decide what to buy and sell in the market, at a price determined by the market." "Others" is not a citation. -- Jmabel | Talk 01:49, September 7, 2005 (UTC)

"Voluntary" transactions

My corrections were unceremoniously deleted as "too weird". That included the use of the word 'contract' for transactions in the free market. That usage is not weird, it is standard. The deletion seems to be provoked by clarification of the word 'voluntary'. In the free market context voluntary means 'uncoerced'. It does not mean that people want to enter into a transaction, or that they are satisfied with its terms, or indeed with the existence of a free market. It simply means that for a given transaction, say a buyer-seller exchange, no third party told the others what to do. That should be explained. Asd it stood, the text carried the implication of political consent to the market and its outcomes. Obviously, 8-year olds who carry hot bricks in Indian brick factories are not there 'voluntarily'. Possibly they approached the employer asking for work, due to acute hunger, and the employer stated the hours and pay, and the child said 'yes'. No external coercion, true, but 'voluntary' in the usual sense it is not.

I restored the word 'contract' which is uncontroversial standard usage, and the clarification.Ruzmanci 17:45, 28 September 2005 (UTC)

I think I see what you're getting at now, but I don't think it makes much sense. If one voluntarily gives money to someone, what else could it indicate other than he did it because he wanted to? If you're hungry, you eat because you want to. If someone has food and won't give you any unless you pay him, he's not forcing you to pay him. You don't have to pay him. You just won't eat. You pay him because you want to, because you want to eat. RJII 18:48, 28 September 2005 (UTC)

So if I stick a gun in your mouth and ask you to hand me your wallet, you have handed it to me voluntarily? -- Jmabel | Talk 23:31, 29 September 2005 (UTC)

No, you would be coercing me. What makes something voluntary is that it's not coerced. RJII 23:48, 29 September 2005 (UTC)

And that differs how from the situation where you are starving and I say "I'll feed you, but only if you sign over your property?" -- Jmabel | Talk 07:15, 30 September 2005 (UTC)

In that situation you're not being coerced. You'll certainly stay hungry if you don't purchase the pizza, but the seller is not coercing you to purchase it. You're free to go to bed hungry, or you may go next door and purchase a taco from a vendor who isn't coercing you to purchase his food either. RJII 12:27, 30 September 2005 (UTC)

No RJ that IS coercian! If there is a threat of starvation.. Think of the Irish Potato Famine - by your logic the disperate, displaced Irish folk had the choice to starve, build an armada and sail to America.

Consider: Traditional methods of supplementing the diet, such as game hunting and fishing often resulted in imprisonment and deportation ("transportation") to other parts of the British colonies...because the land and the wildlife thereon belonged to the landlords....it is an inarguable fact that right through the Famine England imported tons of Irish grain and livestock - more than enough to feed every starving person in Ireland. Food depots at ports were guarded by British Army regiments and local militias.

What were their alternatives? I suppose you would say that was all fair?? However both sides of the argument can and should be presented in this article . But if there is a representation of both views already.. you can't state it is a voluntary/non coercian as fact, elsewhere in article. -max rspct 12:55, 30 September 2005 (UTC)

It looks like you're conflating coercion with exploitation. In the case that someone needed food to such a degree that he was going to die if he did not get it, and you asked that he sell you everything he owns in order for you to give it to him and there was no other food to be found, you haven't coerced him but exploited him. The hungry individual is free to starve and die --you're not forcing him to purchase your food --you aren't going to shoot him if he doesn't purchase. But, most would say, you are taking undue advantage of his desperation. There is a difference between coercion and exploitation. RJII 13:11, 30 September 2005 (UTC)

Coercion can an operational part of exploitation (it can reinforce the desired result of exploitation). tHE iRISH WERE FORCED OFF THEIR LAND.. pAY UP OR DIE BASICALLY .. tHATS NOT coercion? max rspct 13:25, 30 September 2005 (UTC)

I'm not familiar with that particular situation so I can't comment on it. But, if it had to do with government claiming the private property of people and taxing them, then of course it's coercion. RJII 15:08, 30 September 2005 (UTC)

Don't swerve it RJ, the example is one of tenant-landlord relationship/free market (it could be employee/employer or buyer/seller... the amount or apparent intensity of coercion would be dependent on the standard of living)- -max rspct 16:28, 30 September 2005 (UTC)

Again, I'm not familiar with it. And, I don't know what you're talking about. It would be better to stick with a hypothetical example. RJII 16:38, 30 September 2005 (UTC)

I would say that anyone who is unfamiliar with the Irish potato famine is pretty unqualified to edit an article on free markets. -- Jmabel | Talk 19:26, 30 September 2005 (UTC)

I'd say anyone who expects others to be knowledgeable about the details of everything that has ever happened in history is out of his mind. A free market is an abstract philosophical concept. I'm well qualified in that area. Obviously, you're not. Hence, your ridiculous question posed to me above. I didn't put you down for it --I just thought you were "slow." But, now that you've started the attack, I'll tell you the truth. I think it a moronic question. From the looks of things, I don't think you're qualified to do much of anything that requires thought. RJII 19:36, 30 September 2005 (UTC)

My question was by no means ridiculous. I was pointing out that the line between coercion and non-coercion is not so clearly drawn. You appear to consider it a "free market transaction" to use threats of death, as long as one didn't deliberately introduce the means of death. I find that absurd. And I stand by my statement about the Irish potato famine: it is probably the single most dramatic example in history of failure of free market economics. To write about free markets without knowing about that is like writing about communism without knowing about Stalin.

Let me attempt to put my hypothetical argument about the death threat slightly differently. We are in New Orleans a few weeks ago, at the height of the flood. You are on the roof of your house as the tide is rising. I have a boat. I offer to rescue you, but only if you will sign over the deed to your house. Do I correctly understand that you would consider that a free-market transaction? -- Jmabel | Talk 20:17, 30 September 2005 (UTC)

Absolutely, that's a free-market transaction. You would not be coercing me to sign over the deed. However, you would be exploiting me --taking advantage of my desperation. You're not threatening to kill me if I don't sign over the deed. Rather, you are threatening to let the floodwaters kill me (which you are not controlling). There difference is between killing and letting die. If you simply let someone die, you're not coercing them. Whoever sent the flood in would be engaging in the coercion. I suppose that would be God. Though it would be a free-market transaction, I doubt a third party (government) would enforce the agreement after you were rescued --not because it was not a free-market transaction, but because it was exploitative. You could call it "market failure." RJII 20:32, 30 September 2005 (UTC)

Intro rewritten

The rewrite corrects several ommissions. First the distinction between free market (abstract model) and free market economy (descriptive term).

Second, that both the description as 'free', and the value of a free market economy, are disputed. Third that the usual contrast is with Soviet command economies, but early economists and Marx contrasted it with feudal elements (guilds) and mercantilism.

Fourth that the market is an allocation system in the terms of social philosophy, this can be covered in more detail in a section on ethics.

I also mentionned that many non-definitional features are now associated with a free market. This is relevant for the economic freedom indices covered later, since they use indicators which are not strictly speaking necessary for a free market.

I left out the coercive monopoly distinction, the point was simply that competition need not be perfect, in order to define an economy as free. I added a new section on origins, it can be expanded.

Ruzmanci 12:43, 2 October 2005 (UTC)

Looks pretty good, but I disagree with the sentences about pursuit of profit. For example, the CEO of Whole Foods (a self-described "free market libertarian")recently wrote an essay in Reason magazine saying that he's not pursuing profit, but is serving society out of "love" --profit for him is just a side-effect. Also, profit need not even be existent. For example, there is an economic system called "mutualism" where goods are traded without profit --everything is bought and sold at cost. That's a free-market as well. All that's necessary for a free market is trade and a lack of coercion. RJII 19:07, 2 October 2005 (UTC)

free market vs. perfect competition

Someone is confusing free market with perfect competition. We've gone through this before. A free market may or may not have perfect competition. It's not a necessary condition for a free market. To have a free market, all you have to have is a lack of coercion. The lack of perfect information is one reason people oppose free markets --they think government should intervene on this account. So I deleted the line: "The idealized free market also assumes that agents' decisions are rational, globally informed and most importantly, independent." RJII 15:48, 17 October 2005 (UTC)

the move to "free market (economics)" from "free market"

What's the point of this move? When does a free market refer to anything else but an economic market? Isn't this ambiguation (yes I said ambiguation rather than disambiguation) superfluous and complicating for no reason? Shouldn't have their been a vote on it or something? Besides, isn't the idea of a free market just as much an ethical concept as an economic one? RJII 17:58, 18 October 2005 (UTC)

I moved it back to free market. The reason is there was no consensus or vote. The title is unnecessarily complicated. A free market is not merely an economic concept but an ethical one as well. RJII 22:33, 19 October 2005 (UTC)

Well in that case I will add information about free markets outside the abstract model -max rspct 22:38, 19 October 2005 (UTC)

I look forward to it. RJII 22:40, 19 October 2005 (UTC)

"Initiatory coercion"

1. Does this expression have any currency outside of U.S. libertarian circles? I've never heard it used by anyone else.
2. Unless it has wider currency we should (1) indicate the political connotation of the term and (2) define it, because a lot of people, even with an economics background, won't know it.
3. Am I correct in understanding the term to mean that party A is coercing party B for a reason other than that party B has already committed coercion? -- Jmabel | Talk 05:40, 24 October 2005 (UTC)

Well, a free market is a libertarian concept. And, yes your interpretation is correct. If a government is involved in trying to maintain a free market then it coerces but it only uses coercion defensively. If someone pulls a gun on someone, the government steps in and and uses coercion to stop the guy who initiated the coercion. I've also seen the terminology "proactive coercion" and "reactive coercion," rather than "initiatory" and "defensive." Whatever terminology you want to use, somehow you have to differentiate between a first use of coercion and a defensive use of coercion. RJII 02:46, 12 November 2005 (UTC)

Largely agreed (although the concept of a free market certainly predates libertarianism, probably by about 2 centuries), but in an article on economics, jargon which is that of a political ideology, rather than that of economists, deserves labeling as such. -- Jmabel | Talk 21:06, 12 November 2005 (UTC)

It's not "jargon." It's just the english language. Coercion is the use of physical force or the threat of it. There has to be a way of distinguishing whether you're talking about coercion used offensively or defensively. By the way, the concept of a free market can't predate libertarianism ..it's a libertarian concept. Libertarianism has been around for centuries at least -regardless of what it was called. It's just opposition to physical force unless used in defense. RJII 21:25, 12 November 2005 (UTC)

So you are of the belief that libertarianism was discovered rather than invented? -- Jmabel | Talk 02:26, 13 November 2005 (UTC)

I'm just saying that the idea that people shouldn't use force unless in self-defense existed long before someone decided to call it libertarianism. RJII 15:29, 16 November 2005 (UTC)

"Libertarianism has been around for centuries at least -regardless of what it was called" I think these last few lines by you RJII show just how ideologically driven your edits are. You are plugging YOUR interpretation of 'libertarianism' and 'free market' while making up words (neologisms etc) and passing politically-laden concepts off as fact. -max rspct 15:45, 16 November 2005 (UTC)

Libertarian is the belief that a peaceful person shouldn't coerced --that you shouldn't attack anyone unless they've attacked you first. It's as simple as that. That's why anarchists are referred to as libertarians (does the term libertarian socialism ring a bell?). Any statement of that tenet before it was called "libertarian," we can still call libertarian. There is nothing "ideologically driven" in stating that. A "free market" is one where there is no coercion --it's a libertarian state of affairs. (Note: I'm not using the term to mean the Libertarian Party) RJII 16:05, 16 November 2005 (UTC)

RUBBISH! Libertarianism is a modern ideology - it's not anything or anybody u label it as. -max rspct 16:14, 16 November 2005 (UTC)

It's not any more modern than the idea of a free market. The same goes for the term "free market." We can look back on an example of an ancient society that was engaging in voluntary trade and say they had a free market, even though they didn't call it a free market. The ideas and scenarios existed regardless of what we later name them. RJII 16:17, 16 November 2005 (UTC)

Article needs to be moved

The whole article is bias and is written from a pro-free market perspective. Too many assumptions. It needs to be moved to Free market (the ideal) or something similar. -max rspct 12:01, 21 November 2005 (UTC)

I don't see why you would say that. It talks about problems with having a free market. But, if you like, put in a section dedicated to discussing about what's bad about a free market --why it's good for government to intervene. RJII 14:38, 21 November 2005 (UTC)

I see you deleted some information. But you deleted anti-free market things. Like "externalities (like pollution), and asymmetrically distributed information are often cited as potential problems that may exist in a free-market economy. Knowledge bias can lead to what many may see as evils of such an economy, like insider trading, price fixing, price gouging, adverse selection, moral hazard, and the principal-agent problem." I don't get it. Now the article is even more pro-free market. RJII 14:51, 21 November 2005 (UTC)

Well .. for now I will take out POV and assumptions. I credit you with knowing various things about the free market RJ, but I think that the serious knowledge gaps you have (indicated by u being completely unaware of Irish Potato Famine) are negatively affecting the article. I seems to be turning into a vehicle for the american recieved wisdom regarding the free market. User Kimchi has perhaps recognised this by removing the liberalism box. -max rspct 14:58, 21 November 2005 (UTC)

I was not "completely unaware" of the Irish Potato Famine. I was aware of it, but I wasn't knowledgeable enough on it to discuss it. That is, I hadn't studied the underlying causes so wasn't in a position to talk about something I knew little about. I've since read more about it, and doesn't appear to have been caused by a free market --there was no free market, government intervention in the Irish economy was very significant. Anyway, you don't appear to have much of an idea of what you're doing if you claim the article is pro-free market then delete anti-free market points. And this talk of American bias in the article is absurd. Free market philosophy and liberalism did not originate in America. RJII 15:21, 21 November 2005 (UTC)

Tell you what - you write those things back in somewhere.. it doesn't have to be in criticisms section (but perhaps price gouging insider trading etc should be kept together) and I will put in/expand the sociological views and/or Marxian explanation of free markets. -max rspct 15:11, 21 November 2005 (UTC)

Sounds good. I look forward to it. RJII 19:32, 21 November 2005 (UTC)

Libertarian

What's up with this emphasis on Libertarianism; it is mentioned in almost every paragraph, and Libertarianism is hardly a powerful movement. --TheRedAnthem 18:51, 1 December 2005 (UTC)

"Libertarianism" is not mentioned (a political party), "libertarianism" is mentioned (small l). It's kind of hard not to mention libertarian when a free market is a libertarian concept. Merrian-Webster Unabriged defines a libertarian as "one who upholds the principles of liberty ; specifically : one who upholds the principles of individual liberty of thought and action." Libertarianism is the opposition to coercion. A free market is one without coercion. It's a libertarian economy. Libertarians are the ones who push for free markets. Everyone else pushes for interventionism or no markets. Maybe we could say "economic libertarians" to be a little more precise. RJII 18:57, 1 December 2005 (UTC)

As an american, my best take on liberalism vs. libertarianism is that around the turn of the 20th century, the liberals became progressives (e.g. Presidents Wilson, Roosevelt), arguing liberalism was really defined by it being progressive and that further progress to statism (welfare state or socialism) is also liberal. From then on, the people you all in europe would call liberals became libertarians. I think in part because it is an antonym to authoritarian, which was deemed to be the essence of the US 'liberal' or progressive welfares state.Mrdthree 03:16, 25 March 2006 (UTC)

Definitions

I actually think there should be a separate series for Captalism vs. Socialism vs. Free Market vs. Command Economy vs. Planned Economy vs. Decentralized Economies vs. Mixed Economies, as their definitions are somewhat intertwined.

I got out my econ notes from a while back, I'm basically checking my definitions first:

There are two different ways to catergorize an economy into two.

Little Regulation Heavy Regulation

and

Low Government Expenditure High Government Expenditure

Heavy regulation AND high government expenditure are command economies, heavily regulated economies are planned (price wages enforced by the Nazis for example (although I didn't mean the example to be so extreme)), little regulation is decentralized, low government expenditure is capitalist, high government expenditure is socialist, and free market is both low government expenditure and little regulation.

Note that these are very subjective, and are not as simple as saying "Above 50% government expenditure as a portion of the GDP is socialist," because France has above 50% government expenditure as a portion of GDP and some people refer to it as Capitalist and some as Socialist. Similarly the argument goes for little and heavy regulation, some may say that the U.S. is decentralized while others are extreme enough to say it's a planned economy, the difference in opinion comes from the subjectivity of the two terms (I, for example, say that the U.S. is a planned economy because I'm pissed off and opposed to the regulations on power companies; but that's my opinion). China considers itself Socialist, while many other consider it Capitalist. Some consider the Soviet Union Capitalist because of it's Black Market activities. And so on.

In other words:

Little Regulation AND low government expenditure=Free Market Economy

Little Regulation=Decentralized Heavy Regulation=Planned

and

Low Government Expenditure=Capitalist High Government Expenditure=Socialist

High government Expenditure AND heavy Regulation=Command Economy

Oh! And a mixed economy is any economy that is thought of as a mix between socialist and Capitalist, technically this is all countries, but it is also a subjective factor (Subjective in that the percentiles aren't really placed, it's not like below 10% government expenditure is Capitlist, from 10-90 is mixed, and Socialist is >90). Fephisto 16:15, 6 December 2005 (UTC)

I agree with some of that, but, again, socialism is not just a matter of a particular economic role for government. For example, council communism is almost certainly socialist, but does not involve a strong central government. -- Jmabel | Talk 07:25, 7 December 2005 (UTC)

I've almost considered council communism a form of local socialist government (the actual picture in my head is reminiscent with Walden 2). Other than this, you say 'some of that,' what other problems do these definitions run into? I'm basically trying to help out the command and planned economy articles, so redefinitions would be helpful.Fephisto 17:27, 7 December 2005 (UTC)

Level of regulation and level of expenditure are certainly not the only variables. Other variables include the difference in the degree to which private property is recognized (for example, whether it is possible for individuals to own land: in many societies historically it was not) and, closely associated, whether title is based in a tradition, law, or brute force; whether lending at interest is allowed; the degree of freedom of association the degree to which voluntary associations are recognized (that may not immediately sound economic, but consider corporations and unions). There is a tendency at times for us to be a bit myopic and consider only contemporary, industrial societies.

This is all, of course, very "meta". None of this should make its way into articles without cited references. -- Jmabel | Talk 01:43, 9 December 2005 (UTC)

Fiat money

Recently added, I'm removing:

Trades in a free market should be made without using Fiat money, as long as the widespread acceptance of fiat money is enhanced by a central authority which mandates the money's acceptance under penalty of law or the fear or war (in case of international relationships) and demands this money in payment of taxes or tribute.

For starters, uncited: "should" according to whom? But beyond that, this is just confusing two issues. Exchanging an ounce of gold for a bag of cocaine and exchanging three Federal Reserve Notes for the latest Rolling Stones album may both be free-market transactions, even though the latter involves fiat money. And taxation is not a free-market transaction, whether the tax is paid in platinum or Romanian lei. -- Jmabel | Talk 19:46, 25 December 2005 (UTC)

Agree. Makes it unnecessarily confusing and adds nothing--Looper5920 19:57, 25 December 2005 (UTC)

As a participant in a free market I might choose to accept fiat money. There wouldn't be a rule against it. It seems a political activist POV is being pushed. Paul Beardsell 21:57, 25 December 2005 (UTC)

If you accept fiat money produced by a money maker authority, then you accept authority's taxes (as long as there is no fiat money without taxes). If you accept taxes, then the market is not free market anymore, there is always tax-deductibility in some kind of exchanges or trades. Do you think that a market having taxes imposed by a central authority can be named a free market? Even in the fictional case where there is no tax-deductibility and where all kind of exchanges or trades have an identical tax, the fact that there is a tax causes some exchanges or trades to stop, and this is against the free market concept. Onassi 23:20, 25 December 2005 (UTC)

I don't agree that accepting fiat money as payment in a transaction means that one will pay one's taxes, necessarily. Further I don't accept that Free is a black/white issue: There are degrees of freedom. Paul Beardsell 23:46, 25 December 2005 (UTC)

If you're free, you can use any kind of money you want to use for anything you want to use it for. There isn't a free market in money in the U.S., for example, though. That's because of the legal tender laws --makes it very difficult for private money to compete (impossible in the loan business). But, anything about this certainly shouldn't be up there in the definition. RJII 06:06, 27 December 2005 (UTC)

Hmm. Can you expand upon that? As far as I can tell, "legal tender" simply means that the fiat currency is a valid offer (tender) to pay a debt denominated in dollars. It does not require that people accept payment in the currency: I can legally set up a Web store that accepts only e-gold, for instance. I can also make loans that aren't denominated in dollars -- for instance, I can borrow or lend stocks as part of a short sale.

Also, there are a number of other currencies in use in the U.S., most of them in specific cities. See local currency. --FOo 06:16, 27 December 2005 (UTC)

If you make a loan to someone, in a private currency like e-gold, then you're required by law to accept U.S. dollars in repayment of that loan. That means if the U.S. dollar is devalued in the meantime, the debtor could settle the debt for pennies on the dollar. That's a huge risk for you as a lender to take. That's why you won't find banks lending e-gold. Legal tender laws create a coercive monopoly on what currency is used for lending. So, a private currency can only compete in immediate payments. RJII 06:30, 27 December 2005 (UTC)

What law says that, exactly? I can contract with someone to deliver me a sack of onions on Monday. Come Monday they cannot give me USD instead. But say, for the sake of argument, they could: If on Monday the value of the USD has collapsed relative to the price of onions, then on Monday they would have to give me the Monday value in USD of the onions. So, the risk is not as you describe. Paul Beardsell 20:58, 27 December 2005 (UTC)

Onions wouldn't be a monetary debt. Legal tender applies to money. E-gold would be money, but onions in your example would not. If I lend you 10 e-gold dollars, and the US dollar subsequently devalued against gold you could pay me back with the amount of dollars required to purchase 10 e-gold at the time of the loan and I'd have to accept it. RJII 04:00, 28 December 2005 (UTC)

Circular argument: You say it's not a debt unless denominated in dollars. From this you conclude that all debts (onions, e-gold) are repayable in dollars. Both are equivalent and incorrect statements. There is no such thing as "10 e-gold dollars". E-gold debts (and gold loans in the REAL WORLD) are denominated in units of mass (or weight) of gold. They are real debts. A gold loan from (or to) Goldman Sachs (or whoever) is only repayable in gold, dollars are not acceptable without the agreement of both parties. Paul Beardsell 08:22, 28 December 2005 (UTC)

No. You are not allowed to do exchanges and trades without using money coined by the central money maker authority. If a person or a community decide to do their exchanges and trades without using money produced by the central money maker authority, and they finnaly succeed to possess real value goods (like energy, food, transport, land, accomodation e.t.c) then the community or the person are accused for tax evasion and they are forced to pay taxes using money. Of course the community or the person have no money to pay (as long as they dont use it) so the authority simply confiscates the real value goods. Thats how everybody is finnaly coerced to use the money of the central money maker authority. Onassi 09:29, 28 December 2005 (UTC)

The first part of that is absolutely false. I personally and legally enter into contracts with no fiat money component from time to time. And businesses I have worked for and of which I am a customer do this all the time too. The second part, that there may (or may not) be taxes due on the profit which might accrue or, in certain jurisdictions, on the transaction itself (stamp duty e.g.) is besides the point. You have stated here more than once that what happens every day is illegal. Not true. Paul Beardsell 21:45, 28 December 2005 (UTC)

Maybe the phrase "you are not allowed" is not the correct one to use. I didnt meant that everywhere and in all countries is illegal to do trades and exchanges without using money coined by a central money maker authority (although it is illegal in some countries). I said that IF you manage to do your trades without using authority's money, then the authority will catch you finnaly and you have no chance to escape from it. Whatever real value goods you manage to gain, the money maker authority will ask you to give taxes for the possession of those goods. That way you are indirectly forced to use authority's money in order to pay the taxes, otherwise your goods are confiscated by the authority.

KymeSnake said below: After the state's collapse private properties like money or real estate vanishes and only movable real value goods like energy sources or information can still remain privately owned (if stored carefully) and become the subject of a new state-less and money-less market.

I think that a free market is not a market that uses as medium of exchange money coined by a central money maker authority which holds the loan monopoly and the right to impose taxes. A free market could be defined as a tax-free and independant by a central authority market which uses as medium of exchange a movable real value good that holds the money properties (store value, medium of exchange and unit of account) along with the property to remain usefull after a possible collapse of the state .Onassi 22:20, 28 December 2005 (UTC)

The so called "coercion" of taxes is neccessary for a market to exist. It is obvious that there is no market whithout private property and it is also obvious that private property itself can only exist while there is someone to defend it. Traditionally the one who defends private propery (and defines it also by issuing the ownership titles) is the state (which also nominates the central money maker authority). It is reasonable to ask (or coerce if you like that term) the people who are doing their exchanges and their trades to give something back in return for the state defense (and definition) of the money or the real estate property they gained during those trades. This comes in the form of taxation. A market without taxes is like water (H20) without oxygen (O). A "free" water is not a water without oxygen. It is a matter of definition of free after all. After the state's collapse private properties like money or real estate vanishes and only movable real value goods like energy sources or information can still remain privately owned (if stored carefully) and become the subject of a new state-less and money-less market. KymeSnake 20:02, 28 December 2005 (UTC)

I don't believe you. No, really, I agree with you that fiat money is bad, but I think you've got a bad misconception of legal tender. People do, today, in a fiat-money economy, make loans of all sorts of reasonably fungible commodities ... yes, including gold. Neither onions nor gold are denominated in dollars. If I make a loan of dollars, then currency is of course a valid offer to pay it. If I make a loan of onions or gold, it is not.

I think that what has you confused is that "dollar" was not always a fiat currency. It was once a silver certificate, or a silver coin. It was debased. Legal-tender laws meant that people couldn't legally demand the old silver dollars instead of the new fiat dollars. If you had a dollar-denominated debt that you expected to be redeemed in silver dollars, the debtor could pay you back in fiat dollars instead. As a result, Gresham's law went into action and the silver currency disappeared from circulation: nobody would spend it if they could spend fiat instead.

In short, legal-tender laws do not screw over the person who makes a loan denominated in onions or grams of gold. They screw over the person who expected silver dollars and got paper dollars. They are simply an accessory to the standard statist crime of counterfeiting the currency by debasing it -- a statist crime that goes back to antiquity. --FOo 04:47, 28 December 2005 (UTC)

Legal tender laws may go back to antiquity. But taxes dont go back to antiquity, they are still valid and they are still imposed by the central money maker authority. The central money maker authority coerces everyone who possesses real value goods to pay taxes using money, otherwise confiscates the real value goods. This is how everyboby is finnaly coerced to use the money of the central money maker authority, and as long as there is coercion, the market controlled by the central money maker authority cannot be named a free market. Onassi 14:00, 28 December 2005 (UTC)

Correct. A free market can not be a market controled by a central money maker authority which mandates the money's acceptance under penalty of the legal tender laws and in that way creates a coercive monopoly on its currency which is used for lending. Onassi 11:00, 27 December 2005 (UTC)

I am not taking any position in favor or against a free market. I am not saying that a free market is a good or a bad thing. But a free market is by definition a market without coercion, so it is the accurate definition which I am defending. I disagree that there are degrees of freedom. Something is either free or it is not. But there are different definitions of free, and something can be declared free along with some exceptions on its freedom. So its ok with me if you want to define as free market a market without coercion with the exception of the coercion of the central money maker authority which, under the penalty of a legal tender law, creates a coercive monopoly in order for its currency to be used for lending. Otherwise if you dont want to define a free market that above way, you have to make clear to the reader that a market with legal tender laws, taxations, tributes and a central money maker authority cannot be a free one. I think there is a lot of misunderstanding in the free market concept, and many people are calling their unfree markets as free ones. Onassi 11:14, 27 December 2005 (UTC)

"I disagree that there are degrees of freedom." Wow! So, for example, it is not meaningful to say, "In 1950 there was more economic freedom in Paris than in Warsaw" or "the press today is considerably more free in the European Union than in Myanmar"? If that is what you mean, then I have to say that you just have an idiosyncratic use of the term. -- Jmabel | Talk 19:05, 27 December 2005 (UTC)

I disagree that there are degrees of free. Something is either free or it is not. There can only be degrees of unfree. Is it clear now? Onassi 09:04, 28 December 2005 (UTC)

What you say is, I think, clear to me but that doesn't mean I agree! The "free" you describe doesn't exist. You are not free from the encroachment of Winter, you are a slave to water. I cannot see the difference between "degrees of unfree" and "degrees of free". Of course some markets are more free than others. Be sensible. Paul Beardsell 21:50, 28 December 2005 (UTC)

Alan Greenpan on fiat currency / free market

http://www.usagold.com/gildedopinion/greenspan-gold.html:

Mr. GREENSPAN. I think you have to define what you mean by a free market. If you have a fiat currency, which is what everyone has in the world——

Dr. PAUL. That is not free market.

Mr. GREENSPAN. That is not free market. Central banks, of necessity, determine what the money supply is. If you are on a gold standard or other mechanism in which the central banks do not have discretion, then the system works automatically. The reason there is very little support for the gold standard is the consequences of those types of market adjustments are not considered to be appropriate in the 20th and 21st century. I am one of the rare people who have still some nostalgic view about the old gold standard, as you know, but I must tell you, I am in a very small minority among my colleagues on that issue.

RJII 01:17, 6 January 2006 (UTC)

But a free market in what? Just because there is not a free market in exchange rate movements between currencies, or in the prevailing interest rate in a currency, this does not mean there is not a free market in onions. I am sure if Mr GREENSPAN had made that point that Dr PAUL would have agreed with him. Or vice versa. They are talking about currency management, money supply issues: Particular markets, not all markets. Paul Beardsell 01:41, 6 January 2006 (UTC)

I agree with you. But, if not all markets within an economy are free markets, then the economy as a whole is not a free market. And, money is a pretty significant commodity in an economy. RJII 04:14, 6 January 2006 (UTC)

Yup. But then it becomes a matter of what words we use. Say we use the term non-coerced markets for free markets, and coerced markets instead of non-free markets. Then it becomes a case of not how much grit is in the flour but how much flour is in the grit. I contend that when we characterise any sizeable economy as a "coerced market economy" that we acknowlegde implicitly that there will doubtless be some markets in that economy which are not coerced. We know, when we say "coerced market" that we mean predominently coerced. We know there are degrees of coercion, "they" cannot control everything. And the same is true for a "non-coerced market economy": Some control, policing, infrastructure is required. We might even voluntarily agree thay some central body assay our bars of gold and atest to their purity so that we don't have to worry about it on every transaction. The least "coerced market economy", the most "free market economy", might therefore have a central "bank", and a levy for the cleaners to sweep away the rotten tomatoes. The free-est markets might necessarily have elements of compulsion. Paul Beardsell 07:31, 6 January 2006 (UTC)

Also, were a return to the gold standard accomplished by Greenspun in the time remaining to him, there would be some here who would argue that a free market still does not exist because of compulsory taxes. So let's not conflate these issues - fiat currency and free markets are two issues which are not particularly entwined. Paul Beardsell 01:41, 6 January 2006 (UTC)

POV pushing

Parts of this article and some recent contributions read just like a political pamphlet. Too much, already. Stop the propaganda! Paul Beardsell 22:37, 28 December 2005 (UTC)

I added a POV tag because the article supposes that the introductory paragraph discuss thee 'free market' primarily as a politcal rhetorical construct rather than an economic construct. Mrdthree 02:52, 25 March 2006 (UTC)

NOR; topic of article

I basically agree with the content of the recently added paragraph that begins "On the other hand, the so called "coercion" of taxes…" However, it is uncited, and its inclusion here without citation smacks of original research. Also, we really need to decide just what is the topic of this article: is it (as RJII has repeatedly argued) about a pure, abstract economists' model, or is it also about the circumstances in the world in which such a thing may be approximated? If the former, this does not belong; if the latter, we should find someone citable who makes essentially this case. -- Jmabel | Talk 06:18, 29 December 2005 (UTC)

It's a common rationale for the sacrifice of ideal free market principles to maximize economic freedom in practice. It's why an anarchist in theory would advocate the existence of government to get as close to economic anarchy as was practically possible. The whole "government is a necessary evil" thing. I agree it would help if it was sourced though. RJII 06:28, 29 December 2005 (UTC)

legal tender misunderstanding

I have removed the following recently added material from the article and I say why below.

[Money]], in a truly free market economy, is not monopolized by legal tender laws or by a central money maker authority which coerces society to use its own money as the unique medium of exchange in trades, in order to receive taxes from the transactions or to be able to issue loans.

On the other hand, the so called "coercion" of taxes is arguably essential for the market's survival, and a market free from taxes may lead to no market at all. It is obvious that there is no market without private property and it is also obvious that private property itself can only exist while there is someone to defend it and define it. Traditionally, the State defends private property and defines it by issuing ownership titles, and also nominates the central authority to print or mint currency. It is reasonable to coerce people who are doing their exchanges and their trades to give something back in return for the state defense and definition of the money or of the real estate property they gained during those trades. If no taxes are given back to the state then the state collapses. The state's collapse causes private property such as money or real estate to be undefined, and without money or real property, the market, too, may collapse. After the state's collapse only movable goods such as energy sources or information or weapons can (if stored carefully) still remain privately owned and become the subject of a new stateless market.

"Free market anarchists" disagree with the above assessment, as they maintain that private property and free markets can be protected by voluntarily-funded services (see individualist anarchism and anarcho-capitalism). A free market could be defined alternatively as a tax-free market, independent of any central authority, which uses as medium of exchange one or several objects (real or virtual ones) that hold the three properties of money (store value, medium of exchange, and unit of account) along with a fourth property of use value (such as energy) or being trusted (as gold was in antiquity) even in the absence of the State. It is disputed, however, whether this hypothetical stateless market could function freely, without coercion and violence.

Onassi has in several WP articles inserted the assertions in the 1st quoted para, above. They are either false or, if you like gross overstatement. Legal tender laws do NOT mandate the use of a particular currency for the issuing or repayment of loans. Payment in legal tender can be insisted upon by the payee ONLY where the debt is denominated in units of the currency of the legal tender. Legal tender refers to the legal form of payment in a particular currency. If it is US$2.00 for a hamburger then payment cannot be in raw onions - it must be in US$ and legal tender law says what the form of that payment is. What is written in the 1st para is a fundamental misunderstanding of the concept of legal tender. Legal tender is a currency-specific concept. Onassi is correct to say taxes must be paid in the government's choice of legal tender (just as MacDonalds chooses the currency to be used for the purchase of hamburgers). But that is at far as it goes. There is no uniqueness of medium of exchange or loan repayment currency. (If I borrow onions typically the contract says I must repay onions - that is the default in law also.) Paul Beardsell 20:58, 30 December 2005 (UTC)

The 2nd and third paras are simply reaction and re-reaction to the first. All culled, therefore. Paul Beardsell 20:58, 30 December 2005 (UTC)

Onions or hamburgers cannot be used as money. Money is a marketable good or token used by a society as a store of value AND a medium of exchange AND a unit of account. Onions and hamburgers do not have store value, they expire. So you cannot loan or borrow onions. KymeSnake 14:36, 31 December 2005 (UTC)

Of course you can. And it happens all the time. Unless you are using a meaning of the word "cannot" with which I am unfamiliar. Paul Beardsell 19:44, 31 December 2005 (UTC)

Onions can be bartered but because they expire no one will use them as money. After WWII the Germany money was so over inflated (thanks to poor government planning, over-regulation, and of course printing to much money) the Germans used cigarettes, and congnac as the medium for transaction. Cigarettes for small transactions and the liquor for larger transactions. Also remember, money has to have a value. If there is too much it won't have much of a value. Governments had a hard time figuring this one out. (Gibby 22:20, 25 February 2006 (UTC))

But, KymeSnake, you address my frivolous example and not the substance of my argument. I say that there is a misunderstanding of "legal tender" exhibited in this article and I cull the offending material and, as per well established WP procedure, I have placed it here for discussion. You have now replaced the material without discussion. Paul Beardsell 19:59, 31 December 2005 (UTC)

The misunderstanding is that "legal tender" confers a much greater monopoly on a particular class of money over other monies than is actually the case. All that ascribing "legal tender" status to certain examples of a money does is make payment of debts denominated in the same currency legally payable using those examples of that money. You (or the article) and Onassi have it the wrong way around. The payment in "legal tender" of a debt denominated in the currency of the "legal tender" cannot be refused! No other privelege is given to legal tender. If I owe you US$2.00 and I offer you a bunch of onions you are allowed to accept the onions, if you like. If you owe me US$2.00 and you offer me a "legal tender" form of US$2.00 then I cannot refuse the payment and insist upon onions. Paul Beardsell 19:59, 31 December 2005 (UTC)

But note the essential feature: A debtor can force the acceptance of "legal tender" to discharge his debt ONLY if the debt is denominated in the SAME currency as the "legal tender" money is! To repeat myself AGAIN: If you owe me onions (and you could owe me onions!) then I can insist on repayment in onions. Paul Beardsell 20:07, 31 December 2005 (UTC)

All that legal tender is, is the ascribing to certain examples (coins, notes) of a particular money a special status. There is nothing to prevent two different monies being in circulation and each of them having coins & notes which are legal tender. That this is not common does not mean the contrary. Paul Beardsell 20:07, 31 December 2005 (UTC)

"Legal tender" is a status conferred on certain examples of a money, not on the money itself. Legal tender says what really is US$, it doesn't say that US$ is a more legal form of debt repayment than onions. But if you owe US$ the lender can (and usually does) insist on repayment in a "legal tender" form of US$. Not all pennies, e.g., as that would not be legal tender for any sizeable debt. Unfortunately, the govt has not "coerciveley" defined or issued the std "legal tender" onion so your repayment to me of onions will require a careful inspection of the onions, and we might disagree. But that is a DIFFERENT issue entirely. Paul Beardsell 20:14, 31 December 2005 (UTC)

Legal tender, debasement, Gresham's law, and inflation

The problem that "legal tender" laws create in a free market is closely related to Gresham's law. The law (paraphrased) holds that if two kinds of "money" are both mandated as legal tender, people will tend to hoard the one with a higher free-market value and spend the one with the lower value. In other words, if I can choose to buy an onion with a silver dollar or a fiat dollar, I will choose to spend the fiat dollar because the silver one has real free-market value while the fiat one is just a piece of paper.

Gresham's law only crops up when people are required to accept two different forms of money (or any other commodity) as equal, despite the fact that the two are not equal in market value. It isn't specific to money. If I'm required by law to buy any onion for one dollar -- regardless of the onion's quality -- then onion sellers will naturally wish to fob off their poorer-quality onions on me, while hoarding their higher-quality ones for their own use, for another buyer, or even to sell on the black market.

Consider U.S. currency. In 1965, President Johnson debased the coinage, replacing 90% silver coins with base-metal ones. There is a reason you will not find pre-1965 quarters in circulation: today, the bullion value of a silver quarter is more than a dollar, while a fiat post-1965 slug is just worth 25 cents. However, a cashier or vending machine will only give you 25 cents worth of goods for a silver quarter. So anyone who owns silver quarters will hoard them, or sell them as scrap silver at >$1 each, rather than foolishly spend them as currency!

That's Gresham's law in action: under legal-tender laws, the currency of higher free-market value is driven out of circulation by the fiat-currency slugs. This allows the government -- since it controls what is legal tender -- to create inflation (and finance itself) by debasing the currency. Debasement is nothing new: governments debasing the currency goes back at least to ancient Greece.

In contrast, in the absence of legal-tender laws, Gresham's law can operate in reverse: good, reliable money can drive bad money out of circulation. (The meanings of "good" and "bad" are a little bit changed here -- in the previous example, "good" meant higher-value; here it means less inflationary.) See, e.g., dollarization, where a less-inflationary fiat currency replaces a more-inflationary one in a relatively free market (or even a black market).

Inflation is generally bad for individuals who hold and use money, since it means that their savings degrade in value ... although it is very good for debtors, particularly debtor governments, since their (currency-denominated) debt decreases in real value. That's why inflation is sometimes referred to as a form of theft or "hidden tax": it steals from those who earn and save, to benefit a debtor government. Likewise, the inability to realize a preference for a better (higher-valued or less-inflationary) currency creates an obvious economic inefficiency. These are why legal-tender laws are bad for a free market. --FOo 22:55, 31 December 2005 (UTC)

This has gotten larger, but has it gotten better?

1. Is this an article about an ideal model, about a real-world phenomenon, or both? Right now it seems to me to be a somewhat murky mix.

2. Insofar as this is an article about an ideal model, is it about a pure, extreme model used by working economists, more a mathematical simplification than necessarily something to be striven for; or is it about a goal pursued by those subscribing to libertarian ideology?

3. What here has a deeper basis than the opinions of its authors? I ask because little in the article has more than vague citation, and most of it lacks even that: "as theorized by economists and ethicists", "many assert", "are advocated by proponents", "For social philosophy", "Some people believe", "It is obvious", "It is disputed"; these are not citations. "Kenneth Arrow and Gerard Debreu have shown", "Many advocates of free makets, most notably Milton Friedman, have also argued", etc., are only marginally better: how can anyone check such a vague citation?

4. I could go on at length, but let me just pick out one statement that seems to me to be downright cranky: "Some people believe that Money, in a truly free market economy, is not monopolized by legal tender laws or by a central money maker". No doubt that some people believe this. Some people believe world revolution is just around the corner, but I don't go adding that to Politics of the United States. The question is whether this is an opinion held by a significant number of scholars, by a minor but significant political faction, or by a few politically insignificant individuals.

Jmabel | Talk 08:39, 8 January 2006 (UTC)

I have cut the following sentence: "In a free market, purchaser satisfaction alone determines the success or failure of particular goods and services." This is simply not true, even in a pure model. For example, a poor person may be very unsatisfied with the only food he or she can afford, but still be compelled to buy it in order to survive, leading to success; similarly, at the other end of the market, a truly wonderful good or service may require using a scarce resource, and the resource limitation rather than purchaser satisfaction may cause failure. - Jmabel | Talk 04:32, 4 February 2006 (UTC)

I tried taking a shot at a little bit of this, but it's really hard even to tell what is being asserted. For example, is the claim that fiat money is incompatible with a free market supposed to be the view of mainstream economists? If so, a citation would be very much in order. If (as I suspect) it is a view held only by rather radical libertarians -- because I don't remember even Milton Friedman making this case -- that should be explicit. - Jmabel | Talk 23:55, 20 February 2006 (UTC)

Well, Alan Greenspan said fiat money is "not free market." [2] He's mainstream. From what I can tell, it seems like there's this idea going around on Wikipedia that economists that support laissez-faire are not mainstream. Maybe that was the case back in the 70's, but not anymore. What you call "radical libertarianism" is mainstream among economists today. There's not many that buy into interventionism philosophy anymore. RJII 01:45, 26 February 2006 (UTC)

No country in the world today practices laissez-faire economics. No economists in positions of power (e.g. Alan Greenspan) have chosen to use their power to institute a laissez-faire economy. Thus, laissez-faire is not mainstream. Alan Greenspan may have said that fiat money is "not free market", but he obviously supports fiat money - being in charge of the Fed and all... -- Nikodemos 02:22, 26 February 2006 (UTC)

Whether economists are in "positions of power" or not is irrelevant. Laissez-faire is the prevailing economic philosophy of economists today. Statism has been thouroughly debunked. RJII 21:23, 26 February 2006 (UTC)

Geez, if Wittman is the best you all can muster...his reasoning is so horrible. His arguement on what constitutes coersion is not coersion...

And of course no economist in power argues for free markets...free markets will put them out of buisness!!!! (Gibby 10:45, 26 February 2006 (UTC))

Incoherent and Biased

This article is so incoherent it's practically useless. First it argues for a system that is "free" of all coercive measures. Then it argues for a government to .... you guessed it, protect coercive measures! private property ownership in is government coercion--a set of regulations--granting a monopoly access to a defined area of land, and/or of rights to use the natural resources upon that land. corporations are government coercion, creating a legal fiction that would be impossible to implement in a true free market. rights to use of the broadcast spectrum is government coercion. patents, copyrights, and trademarks are government coercion.

then it goees on to conflate this incoherent version of the free market with what in economics is called a "perfect market".

then it strikes out against "Fiat money". can anyone point to a government that issues "fiat money"? not debt-based, or assett based... fiat.

in reality what this article describe a "Free Market" that has just enough government to "protect me from my slaves". it needs to be scrapped and rewritten by honest people. Colorless Green Ideas 21:12, 1 March 2006 (UTC)

The above person appears to be a communist or far leftist.

The idea is to allow people to act freely from coersion from arbitrary government power and from others. No one has the freedom to kill or steal. An authority of some kind is needed to provide incentives to prevent and protect. Examples, Courts, Military, Laws/Rules. In addition the free market requires the protection of competition. This does not mean people are being "coerced" as they never had the freedom to coerce! (Gibby 00:54, 3 March 2006 (UTC))

Wrong, I am neither. I am a free-market progressive. Where did I say anything about "freedom to kill"? I simply argued that any system that claims to be "free of all coercive measures", but then goes on to advocate coercive measures is incoherent and absurd. license based private property ownership is, in fact, coercive; it takes land--which is a fixed supply--and gives the licensed owner a legal monopoly on its use. the licensed owner can use to full force of the government to protect their annexed land. Now I am not against private property ownership, I support it completely, but I acknowledge what it is: a system of government regulations, which are by definition coercive. The more land that is claimed by license, the less there is available for those who come later (or are born later!), the higher price they must pay, the higher their barrier to entry into the market. In a true free-market, private property ownership would be created by labor and occupancy and use of a site. Absentee ownership could not exist. I am not arguing for that, as I am not an anarchist, I am just saying let's call a spade a spade. Government protection of private land monopolization, while being necessary for a functioning market, is coercive, and there's no way around that. Colorless Green Ideas 02:21, 10 March 2006 (UTC)

Taking and protecting land can only coercive if that taking was stealing. If the land was originally unowned, then it taking that land for yourself can't be coercive. In other words, finders keepers. The only way to argue that it is coercive would be to try to approach it from a communist POV and hold that all land is owned collectively a priori, but you're going to have a hard time proving that to be the case. Taking what belongs to no one can't be coercive. RJII 02:25, 10 March 2006 (UTC)

No, in fact, taking and protecting land can easily be coercive. Large landowners take up vasts swaths of land (Ted Turner owns ~2 million acres), that they could never convert to ownership through labor in an occupancy and use system. Only license based private property can make this possible. I don't consider the Communist perspective, I consider the usufruct perspective--in a system without government monopoly land protection, the only real way to own land is through occupancy and use. In such a system, go try and fence off 10,000 acres and call it your "property". Not a chance. Now go back and try to prove that all the land that we own wasn't not originally occupied and used by Native Americans. You can't, because most of it was. Government protection of land monopolization is necessary for a functioning market, and for that it is good, but that doesn't make it non-coercive. Absentee land ownership is the biggest entitlement program. Colorless Green Ideas 07:52, 10 March 2006 (UTC)

If government is needed to protect private property rights that does not prove the free market won't work. In fact, most people who argue for free markets like Friedman and Hayek argue that a government is necessary for exactly that reason. Leftists, particular populists go for the easy strawman by conflating free markets with complete anarchy which even anarcho capitalists don't even believe in. Even they have a authority in their free market it just happens to be a corporate authority rather than a government.

And the ownership of land does not mean no one else can own that does not own land already.

And, land is not the only means of wealth. Neither is money. That is another leftist mistake.

(Gibby 15:32, 10 March 2006 (UTC))

Gibby, re-read my posts. Nowhere do I say that free markets don't work, or that land and money are the only means of wealth. My only complaint is concerning the argument that somehow this definition of free market as outlined in the article is somehow "free of coercion". I'll quote myself just to make it clear : "Government protection of land monopolization is necessary for a functioning market". Let me now quote Thomas Jefferson on the subject : "The earth is given as a common stock for men to labor and to live on. ... Wherever in any country there are idle lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right."

See, I do not deny the rightness, or efficacy of law based property ownership. I also realize that we no longer live in a majority subsistence based agriculture system. The point remains valid, though. Anytime wealthy individuals can monopolize large tracts of idle land owing to government monopoly protection, there is coercion against those who have no land and are now fenced off. This applies equally to other types of enclosure such as patents, copyrights, and even publicly traded corporations. This Laissez-faire market system may or may not be the best system, I don't know, but it is most definitely not "free of coercion". Colorless Green Ideas 04:19, 12 March 2006 (UTC)

And as I said, leftists and those who generally attack the free market make the bad assumption that Laissez-faire free market means NO GOVERNMENT. However, no free market advocate argues that a free market MUST be absent a government or any authority that protects something like private property. THomas Jefferson may not be referring to property rights in general but property where only certain people may aquire them, or property rights that favor a certain group over another, or property rights where laws are so complex as to give benefit to those who already own capital. Such is not a free market.

However, if someone bought land and did not use it, and others were free to buy the land at the time of the purchase then this is a free market transaction free of coersion. Free markets always imply no coersion. Unless you are trying to conflate issues together and make strawmen.

Copyrights, patents, are not coersion either, it is protection of property. IF there were none there would be theft, and theft is coersion. Stop conflating issues. (Gibby 04:44, 12 March 2006 (UTC))

Gibby, again, I am not attacking the free market--I enjoy the free market, and support it. I also never implied that a free market entails "NO GOVERNMENT"; quoting myself for the third time: "Government protection of land monopolization is necessary for a functioning market". My only argument is with the implication that the free-market is "free of coercion".

Your introduction of patents and copyrights make my point even clearer. Patent and copyright laws have been responsible for some of the most coercive and intrusive government actions in the past decade. Colorless Green Ideas 06:08, 13 March 2006 (UTC)

Oh so you defined property as coersion...**rolls eyes** Not allowing people to have property is coersion. Not allowing people to profit from private property is coersion.

Furthermore, without patents and copyrights, WHERE IS THE INCENTIVE TO PRODUCE AND INNOVATE IF YOUR PRODUCT IS STOLEN or "SHARED"?

Your going to end up with a bunch of crap for services and products. ANd exactly how do you define "free market"? You are seriously going to have to explain how any of this is coersion. (Gibby 14:30, 13 March 2006 (UTC))

Gib, do you know why the tech boom flourished in Silicon Valley rather than in Boston? They both had existing industries that were equally able to expand into the new market, as well as a supply of top notch enginners from local universities. In fact, Boston had more mature computer industries. So what happened? California had more liberal intellectual property laws. In Boston engineers often had to sign agreements not to seek employment with a competitor for 2 years after leaving a job. Engineers in CA were not restricted in this respect, and switched jobs often. The market innovated faster and they had to grow with it, so they kept in touch with a large group of peers, sharing knowledge about what they were working on, and what was happening in the industry. Laws that enable the forceful restriction of idea sharing may be highly profitable for an individual or a firm, but only at the expense of the entire industry and its customers. Ideas are intangible, and thus cannot be "stolen" they can only be shared. In fact, they must be. The only thing stopping that is government enforced patent monopolies that prevent individuals from building upon the knowledge that is naturally freely available to them. It is a failure of your imagination that you cannot see how people would have an incentive to produce without the iron fist of government monopoly protection.

If all the land is fenced off, and I don't own any but I want to use my natural right to mix my labor with the earth, I am coerced when I am forcibly removed from the fenced off land. Same for ideas. If I must pay a tax for the use of an idea that happened to be in existence (even if I didn't know about it) before I came around, than I am being unjustly coerced.

I do not define property as coercion. I define government monopoly restraints against entering that market as coercion. However, I recognize that a certain amount of this is necessary for a functioning free market. Property in liberal democracy has never been about absolute ownership, it has always been about the balance of the rights of the property holding individual against other property holding individuals, non-property holding individuals, and future generations. The question you need to ask yourself is this: what is the goal of property ownership? dominion or liberty? Your answers so far have indicated a preference for the former. Have fun defending feudalism. Colorless Green Ideas 19:38, 13 March 2006 (UTC)

I'm sad you do not realize how absurd it is to compare libertarianism to feudalism. It is one of the worst conflations and logical errors I can imagine...not to mention a stretch of the imagination.

Feudalism was a coersive system whereby land and rights were restricted to a privileged class. Classical Liberalism, from which modern libertarianism derives much of its political and economic thought was a rejection of Feudalism and mercantilism (aka conservatism).

Feudalism= 1 Ruling class of social elites, who dominate land and wealth by law, restricting access to all others. 2. Own, literally own the labor and body of others. 3. Serfs are tied to the land and have their freedom of movement, thought, and speech severely limited.

Libertarianism= No ruling class of social elites, anyone with a means of acquiring wealth can have wealth. To acquire wealth you merely need a body. Each person owns their own body, mind, and subsequently their labor which they may SELL! No one owns another person. Your ability to move upward does not rest on birth into a social class. Freedom of speech, and thought, and mobility are not only guaranteed they are essential.

Your ideas of private property somehow being coercive and feudalistic are sophomoric. In no way are future generations prevented from acquiring property in the most developed world and they aren’t even free market liberal societies. The third world has serious restrictions on property rights which have arisen from 2 developments...continued elitist protectionism and or socialist overregulation, both of which make the cost of acquiring property so high, the poor cannot acquire it.

Perhaps you remain aware of the United States, whose population not only grows but the usable space diminishes not only as our society builds wealth but as we expand private property into new ownership....did you know...people actually buy and sell property? It happens all the time. I think you need to seriously re-examine your outlook. And never pull that feudalistic bs conflation again.

The answers you seek is not in attacking free markets, limited government, liberalism, or libertarianism, it is in attacking big government intrusion. Try reading Hernando De Soto's "The Mystery of Capital" as a starter. (Gibby 10:39, 18 March 2006 (UTC))

Ah ha... that failsafe technique: accuse me of attacking things that i had either not attacked, or had not even been mentioned in the course of our conversation: free markets i never attacked--only your definition implying "non-coercion", limited government was never mentioned, liberalism was never mentioned, and libertarianism was never mentioned. i support the former three things, libertarianism is, however, a joke because it's impossible: people won't vote for it, so it must be acheived through non-libertarian means, thus making whatever result categorically not libertarian. i support a more free-market, more limited government, and true classical liberalism in the vein of thomas jefferson and thomas paine. my only argument has been that the only natural right in regards to land is that of usufruct, and that property rights in land ownership is a social gift of liberal democracy; a right created by positive law, and enforced by the government. law based-property, though much more efficient than usufruct, necessarily leads to accumulation of land, thus eventually violating the usufruct rights of the many who do not own land as you yourself confirm in your reference to DeSoto's work. the elite accumulate idle land.. land becomes more expensive. the poor squat on idle--usually public--land and create ownership via their rights of usufruct, but their ownership is not recognized by the government, is tentative at best, and they are thus unable to transform their property into capital. law based property rights that violate the usufruct right are immoral. property rights in ideas and language through patents and copyrights are obviously only made possible when based on positive law, are only enforcably by "big government intrusion", and arguably are not even more efficient than other possible law based systems.

you can have your "libertarianism", but please stop perverting the free market, liberalism, and limited government. limited to only those who already have theirs, is the effect of your "limited" government. Colorless Green Ideas 08:23, 19 March 2006 (UTC)

Land

Title to land ultimately has to rest on force or the threat of force.

There's an old joke from the American West about a young hobo approaching an old landowner and saying, "I want your land." The landowner says, "Too, bad, son, it's mine." "Oh, yeah?" says the hobo, "How'd it come to be yours?" "I inherited it from my father." "And how'd he get it?" "From his father." "And him?" "Well, as it happens, my great grandfather fought the Indians for it." "Great! I'll fight you for it!" - Jmabel | Talk 16:17, 31 March 2006 (UTC)

Sure, it has to be held by threat of force. But, that in itself doesn't make it not free market (not that I'm insinuating that is your point). To have a free market, you have to have force --but defensive force to protect private property. You can't have a free market without private property, because private property is what is traded. Now, as far as private property in land, classical liberals have a labor theory of property --the Lockean conception. You create your private property in land by mixing your labor with unowned land. If an Indian, per your example, works the land, then he owns it and anyone who forcefully dispossesses him of it is violating his natural private property rights. The Indian could not, however, claim land that he hasn't worked --the wilderness. That's open for anyone who wants to claim it by mixing their labor with it. If you have to fight the Indians to do it, so be it. They would be violating your right to private property if they tried to stop you from homesteading on it or farming. You have as much natural right to create your own property out of the unknowned wilderness as they do. That's the classic Lockean conception of property in land. RJII 17:00, 31 March 2006 (UTC)

For what it's worth—and this is getting off topic—most native North American methods of agriculture made distinctions like that very tricky. Because land in North America was generally abundant, intensive agriculture as known in much of the rest of the world was relatively rare. People would tend plants to some degree around a settlement or along a migratory route, but, as a rule, wouldn't intensively cultivate a specific plot of land. Which is to say, they were somewhere between pure hunter/gatherers and settled agriculturalists.

There does seem to be a certain inherent problem with the labor theory of property, in that (if applied purely) it effectively says pure hunter/gatherers have no property rights, no matter how long they've been there, and that it is also liable to be applied that way by those who inaccurately perceive non-intensive agriculture to be hunter/gatherer activity.

Of course, Europeans who came to the Americas didn't hesitate to take land from the tribes or nations that practiced intensive agriculture, either. - Jmabel | Talk 19:56, 6 April 2006 (UTC)

Safe and Secure

I think minimum wage, social security and extrinsic motivation should precede in any society before freemarket principles are implemented. —The preceding unsigned comment was added by Mundlapati (talk • contribs) 28 April 2006.

• Safe and Secure

freemarket will only succeed when race to the bottom is prevented via Social safety net Unknownworld 08:44, 9 May 2006 (UTC)