Monday 16 June 2008

The Ultimate Choice of The Free Market

Free Marketeers overlook something rather obvious, in their defence of competition.

In spite of their vociferous defence of it, the Free Market is actually choosing to do something contrary to what the Free Market theorists want it too.

It is only regulation- state imposed legislation in fact- across the 'Free World', which STOPS the 'Free Market', doing of its own free will, exactly what it is Free Marketers don't want it to do.

The Free Market is not interested in competition. It is interested in efficiency.

We don't live in a world any longer when anyone can just wonder into a bank with a good idea and set up their own business, not unless its something radically new. And even then, the odds are against them. Seventy five percent of new businesses fail in the first year.
Clearly, the Free Market doesn't much like interlopers.

Once, of course it did. Back when Adam Smith was writing. But the cycle of Capitalism has progressed towards the ONLY answer competition within a global economy can EVER produce.
Survival of the fittest.

Left to their own devices, corporations battle against eachother, every little competitive each making a difference. Bigger is better. The only thing that stops this process from reaching its logical conclusion, is rigid legislation.

Which, of course, corporations get round.

But fact is, you try setting up your own bank. I doubt you'll last long.

The fact is, in most sectors today vast reserves of existing cash are needed to maintain the vast technological infrastrucures necessary.
The biggest are the most efficient, so they can offer the customer lower prices. The customer chooses, and the bigger get bigger still.

So the Free Market is selecting the gradual elimination of the weaker competition.

It's logical conclusion, is total monopolies in every sector.

We don't see this, because governments fight hard to stop it happening.

But in practice, it has.

Companies other than Microsoft only exist in competition to it, because the US government and others actually give the competitors of Microsoft UNFAIR advantages to keep things fair. They create a level playing field, by forcing Microsoft to tie one hand behind their back and play the game blindfolded.

They do this, so that an unelected group of people, over whom we have no control, do not have total control over what is ow such an essential part of the global infrastructure.

And the HSBC. The World's Local Bank?

I'm probably moving my account to HSBC. You're stupid not to. Their vast financial clout pretty much means, you got ALMOST as much interest on your savings as you PAY on a loan.
What other bank can match that?

Because the HSBC has such a stranglehold on global finance. Left to their own devices, they'd take over every bank in the world.

An the supermarkets. Free Trade? Or Oligopoly?
It's a club. And the fact is, the key players in the food industry are few and far between.
A company like Grampian Country Foods supplies a huge chunk of ALL own brand supermarket produce.

The supermarket sector is just another sector where there is an interlock between a number of companies, all of which are too large to be allowed to merge further, they are prevented from doing so, so are just asked to play nicely.

But in all cases, if governments removed all legislation essentially REGULATING the Free Market, the FREE choice of the consumer, would ultimately result in one ultimate victor.

So in fact, the ultimate victory of the Free Market WOULD be- a Monopoly over which the consumer had no control. And could do what it wanted, provide whatever service it wanted, it wold be the only choice we had.

So it would achieve the same results as Nationalisation used to achieve.

The Free Market is TELLING us, that having the infrastructure centrally governed, by having the largest and most efficient central planning for that infrastructure, is in fact, what POTENTIALLY delivers best.

All that we need to do, is make sure that those running it, are accountable.

And that's the bit that the Oligopolies of Capitalism cannot deliver, nor did the Nationalised industries so beloved of old-style Socialism. Or the USSR.

What it DOES mean, is that the consumer choice needs to be maintained. In the old days when Capitalism worked, the consumer had a CERTAIN democratic control over the development of the infrastructure, in his/her buying power.

Both Nationalisation, and Oligopolies alike, deprive him/her of that.

The point is, taking the whole lot of control by an unsupervised body.

We need the most efficient infrastructure, but one whose administrators are directly elected- by the people.

THAT'S what's meant by democratic control of the infrastructure.

And that's why TRUE, Democratic Communism, which has NEVER been tried before, is ACTUALLY the model which would deliver the best results.


Anonymous said...

The free market system mimicks nature in that it thrives on the principle of survivial of the fittest. But unlike nature, there is no evolution going on to balance it over time. Only the artifical interference of man like you referred to.

Anonymous said...

"Seventy five percent of new businesses fail in the first year.
Clearly, the Free Market doesn't much like interlopers."

This is an idiotic take CBI :) the reason they fail is BECAUSE of the free market and it's ideals.

The people involved in the market (whether running the business or buying from it) make or break it; the free market assures them the chance to make it. Supply and (especially) demand assures them of success or failure.

Anonymous said...

Just a quickie- actually, the whole point about the ffree market IS that it is the market behaving as nature. The economy naturally selects.

So, yes you're right, Lord N, in your point.

But your point actually supports mine; there are no fresh niches, really, for new businesses. At one tiome, hee was room for largescale expansion of the infrastructure; you could just in London with a few invesrors and set upthe 'Trans-Australian Railway Company', or something. and two years later, you'd be rich.

Those niches don't exist any more.

In much the same way insects evolved once. Now, nothing else is goin to evolve into insects, because insects already have the head start on that niche. They are naturally going to be better at BEING insects, than something else that tried it out.

All sectors now, are sewn up, so fre entry is no longer a possibility. The true Free market was only possible at a certain stage of the creation of the global infrastructure- the begining.

But ultimately, the logic of the Free Market, is simlar to evolution. In evoluton, competation betwen similar species for the same food source, will usually mean the elimination of one species. Thus, when North americva mer South America, causing a special interchange, most of South America's marsupial species died out.

The ultimate logic ofthe Free Market is a bit like Highlander 'There can only be one' fittest.

Supply and demand, takem to its conclusion, means ONE winner.

The logical conclusion of the Freemarket is it slowly eliminates the free choice that set its cycle off in the first place.

As I say, Capitalism is a phase, a stage.

Anonymous said...

there are no fresh niches, really, for new businesses

Absolute hogwash Crushed! People innovate the whole time. And I don't mean new whizz-bang gadgets created by the mega electronics corps. When McDonald's started, everyone just assumed that to get a cooked meal out you had to sit down at a table and wait to be served. Krock (?) didn't invent anything technological, he just realised that service could be more efficient if the restaurant was a different shape.

We will never, ever, get to the end of evolution - business or otherwise.

Anonymous said...

"As I say, Capitalism is a phase, a stage."

horseshit there CBI :)

Anonymous said...

The true free market is a bazaar in which base goods are traded. Very rough and ready.

Corporate marketeers would have us believe that their market is basically the same but it isn't. They rely heavily on vastly more complex statist infrastructure, institutions and defence - they also perpetuate nepotism and privilege whilst claiming to be completely open.

I prefer the honest name, capitalism. There's nothing wrong with it in my view. Just don't tell me it's free.

Anonymous said...

Fusion- All economic cycles were a part of economic evolution.
But the economy is now evolving to the next stage, whether we like it or not.

As Marx said it would.

Blue Eyes- But you couldn't set up a fast food chain now?
As I say, thoe sorts of niches are gone.
The only TRUE niches are new technology.
Which is now the preserve of the big boys to implement.

Lord N- Read Marx. He explains it better.
The theory is right.
Proved by the evidence of following the history of the global econimic cycle SINCE he made those predictions in 1859.

Same year Darwin published his theory.

E-K- You see the point :)
Glad you did, because this is the point.

Want to make it free? Me too. Let's put it under our control.