Monday, September 27, 2010

A Challenge

I constantly hear refrains from liberals that they actually believe in the free market, yet whenever there is a choice between the government and the free market, they always choose government. Can some liberal out there name one thing that the free market does better than the government?

10 comments:

L Harris said...

The free market isn't perfect. I always ask my conservative friends how do you account for market failures? I now pose that same question to you.

Adam Freund said...

Ms. Harris,

Thanks for the comment. No one ever claimed the free market is perfect, nothing is, especially government.

Asking how one accounts for market failures presupposes that other economic systems, those based on centralized control don't have any failures. That's simply untrue. The truth is that the failures of the free market are much less than those of other systems. What matters is not that the free market or any other system fails (which must happen), but that the economic system adjusts to those failures as quickly and as efficiently as possible. The free market does this better than any other system through its profit and loss mechanisms.

But, back to the main point. I asked if a liberal could name one thing that the free market does better than government. Will you answer that question for me?

L Harris said...

The best aspect of having a free market (in my opinion) is that it ensures a competition. I'd argue that this one thing the free market does better than the government. I don't really see how the government could manage having the best goods and services provided to consumers at the lowest price effeciantly. This dynamic is something that comes from competition between companies to produce the best goods or services, and letting the consumers decide by demanding more.

However on the flip side there has to be some modicum of regulation. Without it, the distribution of wealth between the rich and the poor continues to grow larger, not to mention big business will take advantage of the system and we'll see problems like we did with the sub prime mortgage crisis.

jasimon9 said...

Do you really mean "free market does better than the government?" Or are you really thinking the reverse?

This is an astounding comment. There are thousands and millions of examples of how government is incompetent in trying to achieve virtually an economic result.

Like paying $110 million to create 55 jobs in Los Angeles. I bet there are at least 10 (million) private enterprisess in the US that can create more than 55 jobs with that much
"stimulus."

You cannot be serious.

Adam Freund said...

Thanks for the comment jasimon9.

L Harris said...

Jasimon9 the initial question I responded to was to name one thing that the free market does better than the government. Which I did. I am a little confused as to what you're talking about because I'm not advocating complete government control over the economy. I think there should be some government oversight and regulation of the market, but I don't think government should have control over it. As for your stimulus example, it's anecdotal. There isn't enough evidence to point that that is a trend. The CBO (Congressional Budget Office) and CEA (Council of Economic Advisors) estimated that the stimulus has created between 2.2 to 2.8 million jobs. Independent economist place that number between 1.4 and about 1.8 million jobs but either way you look at it the stimulus has been beneficial. The role of the federal government isn't job creation, however when we are in a recession a few things tend to happen that the free market usually doesn't self correct, which is why the government has to step in and aid the process.

During recessions people stop spending as much money, demand goes down, and corporations are forced to cut back. These cut backs take many different forms, one of them being lay offs. This further depresses an economy and makes matters worse. During times like these your example doesn't work. Private enterprise isn't creating jobs, they are cutting them, and usually makes a recessed economy even worse. Which is why you need government intervention. It worked during the Great Depression with New Deal policies and if Republican governors didn't refuse stimulus money in their states it probably would have done more.

Lastly, if what you advocate is a completely free market, I'll point a few problems with that. Public goods such as police, firefighters, schools, parks, buses, etc won't be provided or will be inadequately provided because consumers won't be willing directly pay for them and there is no profit for companies to create them. Environment problems will arise because private enterprise will ignore external factors such as air, water, etc. The gap between the rich and poor will expand tremendously, leaving more people poor and less people rich (which eventually would be a detriment to the society). Moreover, monopolies tend to occur in free market economies resulting in a sole provider of certain goods and services (including essential ones), which allows for the exploitation of consumers through high prices. And this is where a completely free market falls apart because demand for goods and services won't dictate prices and which variation of those goods and services are superior. Monopolies would. Which is why I advocate a healthy mix. Nothing is perfect, but we can try to come as close to perfection as possible, and a complete free market is problematic as well as a completely government run system. You need both.

amansmind said...

Well said, Linda. A completely free market is just not feasible for the long term economic health of this country.

Adam Freund said...

Ms. Harris,

Please stay on topic as you are constantly arguing against a straw man and vomiting out liberal dogma. Where have I or anyone else on this blog advocated "a completely free market"?

I urge you to actually read the whole blog! Read all the past posts and react to what's actually said.

No one can debate every topic all at once. Let's tackle them one at a time and have a vigorous, insightful debate that might actually open up some eyes.

L Harris said...

I have read the whole blog, I was responding to what Jasimon9 said about government being incompetent while trying to achieve an economic result.

Direct Quote "There are thousands and millions of examples of how government is incompetent in trying to achieve virtually an economic result."

If you read my response you'll see that I said the role of the federal government isn't to create jobs but to intervene when the market is having problems. You should also note that I said IF you advocate a complete free market, I never said that you guys did. Moreover, I don't understand what part of what I wrote was liberal dogma. Either way, I don't even know what we discussing anymore at this point because I thought it was about giving an example of what the free market does better than the government, which I happily gave. I like the free market, and a lot of liberals do. But being attacked for agreeing with you, and answering the question you posed, I don't see how that makes me wrong.

Adam Freund said...

Ms. Harris, please continue contributing and reading, I really appreciate it. All I am trying to do is keep the discussions on track. I want to avoid people going on tangential rants (both conservative and liberal rants). I apologize if you thought I was picking on you.

One point however is that saying "IF" doesn't really accomplish much and is the straw man argument I was talking about. By saying "IF you advocate a completely free market" you are implying that there are folks out there who do. The reality is that almost no one, and I mean no one, even comes close to advocating this position, so who then would this comment be directed to? If I said, "IF you believe in complete control of the economy..." it would be the same thing.

Once again, thanks for the comments and keep them coming.

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