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Comment by GijsjanB | Hacker News Reader

This is a rhetoric that is being repeated and repeated, but the simplification renders it obsolete. In my opinion. What market is free? Who is your consumer? What about ((yet) unforseen?) externalities? We've come up with a lot more systems and are sticking with this "free" market one, but being technicians, we know that more often than not, not the "best" system endures.

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A functioning free market, or at least the best approximation that we can have in practice, requires state intervention.

I think this is a crucial point that is too often overlooked.

Many people think that "free market" means no intervention. While this might be the theoretical definitions, in practice that does not work and the system degenerates.

If a good approximation of a functioning free market can be achieved then it is indeed the best option we have.

I think there is a choice element around "free" as well. I think functional markets can be relatively free (and regulated) but they can also be not free (closed to certain actors, structured with elements of compulsion) and yet also be functional.

Efficient allocations are theoretical (in the sense of not computable within the lifetime of the universe on a real machine) when you move past a handful of actors and a handful of goods. Functional markets don't make efficient allocations - they make allocations that the actors can sustain.

Free markets make efficient allocations in the sense that resources are allocated to what is in demand and competition forces players to increase their own efficiency.

Markets exist no matter what you do. Everything is a market.

Markets are one mechanism for social regulation; there are many others. For example it was common for rulers in past societies to bury large hordes of treasure as offering to the gods. This was done not to store it, but because it increased prestige while reducing actual power. This is not a market. Not everything is a market and attempting to apply market mechanics to things which are not markets (like relationships, education) is a major source of inefficiency and unhappiness.

Everything is a market. Problems arise when this is ignored and, worse, when rules are created that go against the market.

Education, for example, certainly is a market. Demand is high and all parents try to get the best the can for their children, which creates an imbalance between demand and supply for the best education. Where school places are allocated according to catchment areas, houses prices immediately reflect the value of certain schools. That's the market talking.

In the UK, there used to be "grammar schools", which were selective secondary state schools. Most of them have been abolished but not all of them. Getting a place means top free education. Result? Insane competition and huge industry of private tuitions and training books that lockout the poorer. Again the market is at play and tells us that a grammar school place is extremely valuable.

Supply and demand, therefore markets, shape everything.

Everything is NOT a market, that’s a profoundly ideological statement. Check out Karl Polanyi and the distinction between a society with markets vs a market society. We live in a market society, but that is a historically unprecedented state of affairs - historically, many important aspects of society were distributed and regulated through other social forms. It is capitalism alone which commodifies everything under the sun, including land, housing and labor. Many of the most awful aspects of our society are rooted in this historic aberration and the creative destruction it brings with it.

Specifically the interests of the unborn cannot be represented in a market. The unborn have an interest in the use of resources and the exploitation of the environment, and it is a legitimate moral interest, but they are not market actors and their interests cannot be accounted for in a market framework.

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