The beauty of the free market is that the way to maximize profit is to maximize customer satisfaction.
1. Find me a free market. Otherwise we’re just going to devolve into “no true Scotsman.” The USA, for instance, is light years from a free market in basically every respect.
2. In a truly free market the way to maximize profits is to create and maintain a monopoly. Nearly every large business trends towards this or explicitly attempts it.
3. Customer satisfaction only matters if the customers have true choices, and true customer choice is antithetical to profit maximization.
How would you describe an economy in which customer satisfaction actually matters? Regulated free market? Free market with guard rails?
Or do you really think that a 100% unregulated market is at all supportive of human benefit? I believe a 100% free market would mean the removal of all worldwide government entities and the creation of a few mega-cartels that ran basically everything.
1) OK. I challenge you to find a free market that has produced a monopoly company without some kind of govt helping hand. Examples of helping hands: artificially low interest rates (derisking M&A), regulatory capture, or failure to enforce laws (antidumping, antitrust).
3) That's true. And who's fault is that not all true (cheaper) choices are offered to the market ?
Hint: Why so few $1000 new cars, or $200 surgeries? Its not the market that is not willing to make them, rest assured. Its that a certain large body is not allowing others to make their risk:reward choices.
Also, the players are trying to corner the market in their territory (create a monopoly)
Except for that part about shooting one's competition and rampant fraud.
2) There are multiple ways to maximize profits in a free market depending on the market. Not all markets allow you to create monopolies. Monopolies only exist, in practice, were market dynamics are compromised. For instance, power companies are able to be monopolies because power delivery infrastructure is constrained and supply cannot be increased (imagine if anyone who wanted to throw up a power poll was allowed).
3) Choice is literally the defining characteristic of a free market. If customers aren't able to choose, you aren't talking about a free market. This is kind of moot for this topic though, as colleges are very clearly something one can choose.
> How would you describe an economy in which customer satisfaction actually matters? Regulated free market? Free market with guard rails?
Regulations can make markets freer the same ways they make people freer. You are free to walk on sidewalks because laws say cars cants drive there.
> Or do you really think that a 100% unregulated market is at all supportive of human benefit?
The counter point to "free markets can help this problem" is not "you must think laws are stupid and money is everything."
Thing is, there are generally two different things that people can mean when they say "free market":
1. A "market economy", as contrasted with a "command economy"—ie, more or less the way the US does things, as opposed to the way the Soviet Union did things.
2. An "ideal free market", as described by Adam Smith, which can, in theory, ensure that many systems find a stable, efficient equilibrium that balances consumer desires with producer desires.
The problem is that, however much many (particularly of the Libertarian bent) wish to believe in it, the latter is not real. It is a thought experiment, and it requires a bunch of conditions that don't always apply (eg, perfect information, commoditization, etc). The other problem, of course, is that as I said, the two are often called "free markets" interchangeably without clarification, which leads to much confusion.
You seem to be referring to #1 when you say "there are free markets within the US"; however, what WalterBright is talking about is clearly #2, since he's referring to ways that idealized free markets theoretically operate.
I don't know where this requirement comes from. It is completely unnecessary for a free market. The free market prices in lack of perfect information - i.e. "risk".
Complaining that free markets not being perfect is like complaining that friction in an engine isn't zero. You can't make it zero, but you can get pretty close to it.
I was using free market in a practical sense, as in a market (a pairing of buyers and sellers) that has functional supply and demand dynamics. I wasn't relying on any larger context, like an economy.
I didn't interpret WalterBright's comment as invoking some 'ideal' market either. I don't think talking about 'ideal' anything is even useful outside of an academic context, so I don't assume anyone here, that isn't explicitly talking about theory, is invoking an 'ideal' version of whatever they are talking about.
> I believe a 100% free market would mean the removal of all worldwide government entities and the creation of a few mega-cartels that ran basically everything.
A free market requires the existence of government to enforce our rights and provide a mechanism to resolve disputes.
> How would you describe an economy in which customer satisfaction actually matters?
A free market. Qualifiers are unnecessary.
The gov-funded loans were created to solve a problem as well.
The government should either fund higher education directly, or give students cash.
This is the same playbook with deferred compensation like defined benefit pensions and retiree healthcare for government employees. Government avoids paying cash now so taxes are lower now, and use liberal accounting assumptions to understate the debt.
They were created to allow poor kids to fund their education with a vehicle other than government grants.
> The government should either fund higher education directly, or give students cash.
Maybe, maybe not. There is a cost/benefit argument to be made there, but I doubt you have the information necessary to say this with the level of certainty you are presenting.
> This is the same playbook with deferred compensation like defined benefit pensions and retiree healthcare for government employees. Government avoids paying cash now so taxes are lower now, and use liberal accounting assumptions to understate the debt.
There are differences in the risk, and therefore pricing of these two forms of government debt, but yes, the government, like all entities, tries to pay things off as late as possible.
Let me ask you something: do you think this is how we're going to run things for the rest of time? Feudalism came and went, mercantilism came and went. Probably we'll come up with something better than what we have now, some day. I admit it's hard to imagine what, though
/s, in case it's non-obvious
Car dealerships are another market distortion set up, again, by government interference.
Health insurance, too.
Free markets are like pretty much any element north of Plutonium - the half life is extremely short and if they are forced to exist in nature they'll quickly decay to a more stable state... often violently and sometimes with a loud bang.
Got a case history?
> it's generally under appreciated just how unstable free-markets are.
Freedom does require eternal vigilance, that's for sure.
> the half life is extremely short
The US has had one for what, 240 years now?
I guess if you want to call that entire 240 years "capitalism" and use that as evidence that it's, ah, more sustainable than other strategies, well that's fine, but that means free market capitalism has no mechanism preventing things like slavery or company towns. In fact it seems it continually fails to provide for anyone other than capital holders until another philosophy enters the picture, such as government regulation or worker's unions.
You say freedom requires vigilance, what's that mean? When the only way to eat was to work in a company town and scrape together barely the means to a living, everyone is vigilantly aware of how shitty the situation is, so then what? History teaches us the "and then what" is strike followed by reactionary state violence followed by bloody revolution, so there's your case history of devolution to violence.