Free Market Capitalism

by | Sep 12, 2017 | Economy, Keith | 0 comments

Basic economics: for most items the demand exceeds the supply. In other words, people will almost always ‘want’ more than is available – or than they can afford. Gasoline, homes, automobiles, crayons, ice cream – you name it. A question every society must answer is how these items will be rationed. In a free market it is rationed via voluntary transactions with voluntary price agreement, i.e. no price setting and no requirements for how much you can or cannot purchase- and no one making you purchase the product or denying you the opportunity to purchase the product.

The regulating factor in this model is price – which is dependent on supply and demand. The system is regulated by the opportunity to undersell the competition. In this model the entry into business is not artificially elevated by taxes, regulations, fees and legislation – hence the motivation and opportunity exist to enter a market and underprice the incumbent players. This controls the price. This is why free market capitalism is the only model whereby you make money by serving others rather than by pillaging them. You offer a better value than the competition and the competition must improve or go under – and the new opportunities for competition are endless in this model because government is not interfering to protect the market share of incumbent enterprises.

The system we have today is not free market capitalism but corporatism – the government exist primarily to pass taxes, regulations, fees and legislation that protects incumbent businesses and raises the bar to new competition entering the market and underpricing the incumbent players. In the current model the government explicitly interferes to protect incumbent business enterprises – and it is often tied to the financial future of the politicians. Most often this interference is sold as a ‘benefit’ to the public when the end result is the removal of choice in the market place and either public dollars being shoveled into the corporation or a legal requirement that the citizen must give his dollars to the corporation or face the wrath of government.

Nearly everyone understands that the current system sucks. It holds wages down and it encourages non-productive debt and redistributes trillions of dollars from the many to the few – because it is based consumerism and corruption that works for the corporations and not on investing in new enterprises that in return would raise wages and expand opportunity.

Some people think they prefer socialism where the rationing, pricing and supply of products is determined by government – and the demand is artificial and the result of the government use of force. This model is nothing more than corporatism writ large. There is a delusion that somehow the people who would be making these decisions of who gets what and how much at what price would some how be capable of making wise decisions and making it ‘fair’ – and not continue to work at the behest of the corporations.

There is absolutely nothing in all of human history to support that concept – and it does not matter if one looks back one hour into history of a hundred years. Allowing a select group to make these decisions is just foolish. They cannot possibly know what the demand will be for product next year- and the failures are always excused with propaganda and force while always benefiting the few. Just the truth.