If you ever want a proof that the market can be utterly irrational, look no further than:
> The arrival of lab-grown diamonds has challenged the widely-held assumption that diamond prices could only go up
> The arrival of lab-grown diamonds has challenged the widely-held assumption that diamond prices could only go up
Well diamond trade exists largely in a free market until it hits some of the countries they sell in but before that we basically have blood being spilt over them and companies existing outside of strong regulated countries to funnel the diamonds into and control the price.
A truly free-market seems very scary in a modern world.
Transparency can be subjective. For example, a person sells 100 shares of ACME stock to a savvy buyer. A short time later the stock triples in value, and the seller sues the buyer because they were not "completely transparent" about their knowledge that the stock would rise.
Of course, in all of this I am not talking about deliberate fraud which would be strictly forbidden in a free market.
If you don't have that, a free market can't work well.
When you buy something in a free market, you should know its quality, characteristics and the price on the market. You should also know its provenance, relative supply and transport/marketing cost. That's transparency. It lets you buy things and make the most efficient choices, which is why it's fundamental for a free market.
The criteria you specify for transparency is subjective and I don't agree that all of those criteria are strictly necessary. Specifically, I don't agree that knowledge of "provenance, relative supply and transport/marketing cost" is required of a buyer at all in a free market, though they may personally have an interest in those things. I would venture that most consumers know and care very little about those things.
>If you don't have that, a free market can't work well.
>which is why it's fundamental for a free market
What's important is the principle of subjective value--that the buyer and the seller value what they are getting more than what they are giving up--and that can happen without the various criteria of transparency you outline. Certainly there are cases where market actors will demand some of those (and many cases they will not), but I wouldn't state it's a foundational requirement the market must be built upon.
>What's important is the principle of subjective value--that the buyer and the seller value what they are getting more than what they are giving up--and that can happen without the various criteria of transparency you outline.
No, that's important to a market period. A free market is a specific thing.
You need the other things to move away from the necessity of government regulation (transparency, for example.) If you don't know what's in that apple and nobody is going to make sure it's safe, you can't buy or sell it efficiently.
>You need the other things to move away from the necessity of government regulation
I guess this is the crux of the matter. You are suggesting that transparency must pre-exist a free market, I am suggesting that a free market pre-exists transparency, and when necessary transparency will be demanded by the consumers.
The issue, I think, is that we have a different definition for a free market. A free market, by the definition I am using, functions at peak efficiency and is free from monopoly and large stakeholder or government intervention/regulation. For that to occur, the kind of transparency I'm talking about must theoretically be present.
If transparency came afterward, what happened prior would not be perfectly efficient and would be vulnerable to monopolization, intervention or unbalanced deals and so would not, by definition, be a free market.
That is the whole point against it, no one would enforce it.
You say the people would but would they? Would they care? People in the US know about 'blood' diamonds, heck a movie came out with an extremely famous cast and helped get lots of people aware of the dirty trade of diamonds.
Diamonds still sell extremely well. Banking on the common person to push for transparency and help improve the market by not 'supporting' these diamonds doesn't work already. They know about diamonds trade and people still constantly buy them.
Instead I attack the ones that are actually driving to make policies that reflect a 'free-market', deregulate and push the ideology. Those are the ones pushing for an unreasonable policies.
So, a real diamond of fake value is used to engrave fake value of real bitcoin .. or something ..
xkcd material!