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Comment by littlestymaar | Hacker News Reader

> Privatization of government services is not the same thing as a free market, and hence free market forces are not applying to it.

The problem is that nothing is the “same thing as a free market”. Free market don't exist in the real world, and the market forces are way less powerful than what we would like. They are almost always dwarfed by other forces (transaction cost, network effect, economies of scale, and information asymmetry for instance).

Remember, the free market model comes from an era when chemistry was modeled with the 4 elements !

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> Remember, the free market model comes from an era when chemistry was modeled with the 4 elements !

I fail to see how the age of the model has anything whatsoever to say to its validity. Not everything old is stupid; not everything new is right. If you want to disprove the free market model, you have to do a lot better than pointing out that it's old.

It is true that perfectly free markets don't exist in the world. That doesn't mean that the model isn't useful as an approximate ideal.

The complete inability to predict anything useful[1] is a clear marker of the failure of this model though…

[1]: crisis for starter…

I predict that when I go to the supermarket, the free market has apples for sale there. My prediction has never turned out to be false. It's a useful prediction.

I predict that when I look out my door to the east tomorrow morning, I will see Apollo's chariot ascending through the firmament.

My prediction has never turned out to be false. It's a useful prediction.

> They are almost always dwarfed by other forces (transaction cost, network effect, economies of scale, and information asymmetry for instance).

Those are all free markets, too. Consider information asymmetry, for example. The less I know about something, the riskier it will be for me to buy it, hence the less I am willing to pay for it.

I.e. information asymmetry is called risk, and is accounted for in the pricing. Companies are incentivized to reduce risk for their customers, because then they can charge a higher price.

So you want a false sense of "security" and "certainty" instead of reality. You're basically insane.

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