Wednesday, October 22, 2008

Free Market Utopia

There is no active research or support for any of this, other than what's in my head today and needs to come out.  Hopefully soon I'll springboard off of these thoughts for a more indepth post.

1. What is the rationale for the free market?  It should provide the most efficient allocation of scarce resources.  To parse that a little:  
  • SHOULD - really?  why?  how?  
  • PROVIDE - through what process?
  • EFFICIENT ALLOCATION - what is efficient?  does everyone benefit?
  • SCARCE - is this a rhetorical descriptor/does it mean all resources are (ultimately) scarce?
  • RESOURCES - does it work for all resources?
2. What are the theoretical underpinnings of the free market?  The economic argument is always made ceteris paribus - "all else held constant" - so what is not constant and what threatens the model?  IF the market truly "should provide the most efficient allocation of scarce resources," what are the shortfalls that it faces in the real world?  These are probably cases for outside intervention, ie the government.  

3. The point, as it relates to utopia, is that everyone has a utopia.  (Is a utopia definitionally a fantasy?  Or would I do better to write "utopian fantasy")  There are many ways in which the theoretical free market does not fit reality.  One example that comes to mind are monopolies, which distort the market.  In any case, to ignore these and claim ad nauseum, without critical reflection, that we should "let the market work" or that government is "just in the way of the market" - is blissfully ignorant at best, maybe willfully myopic, and self-servingly blase at worst.

4. On the point of government.... I've tried more than once to create my own model for understanding the world.  Part of my current framework has the individual or group in a 3-dimensional context of the Social, Political, and Economic.  Through recent discussions and learnings, I've come to better understand the relationship among these three - to understand things in this way is effective, I think, but more usefully perhaps can be taken as a prescription as well.  There needs to be a balance among these three for a society to function smoothly.  One example - the rise of Naziism was at least partly due to the fact that the economy was in shambles and the political sphere was very weak.  The social became very strong, too strong, and eventually overshadowed the others....

Got to run.  More later

No comments: