The Myth of the Free Market

[Joanne98]

Rand Paul’s ambivalence (and by “ambivalence” I mean “antipathy until he realized he was getting killed politically”) towards Title II of the 1964 Civil Rights Act, followed immediately by his “sometimes accidents happen” defense of BP against big neck-booting meanie Obama gave us a great reminder of the biggest of all of conservatism’s zombie big lies: The free market makes regulation unnecessary.

Yes, that’s right: We don’t need any of that oppressive government regulation, because corporate wrongdoing will be found out and punished by angry customers and shareholders withdrawing their business. But the thing is, after 30 years of aggressive deregulation, corporate capture, and starvation, our regulatory landscape is already starting to resemble Lord Of The Flies. And how has that worked out for us?

Well, let’s see: We had countless food and drug poisonings, an epic financial meltdown, some horrific mine collapses, and an offshore oil rig explosion that could wipe out an entire ecosystem. Also runaway greenhouse emissions and an insurance industry that routinely hikes its rates and denies coverage on the flimsiest of pretenses.

The common denominator? Corporations putting profits ahead of safety, customer care and the public good because their regulators are too weak or too corrupt to stop them. How would further deregulation make any of this better? Are we to believe that corporations can’t afford proper risk management or customer service because they’re spending too much money on lobbyists and campaign donations?

http://firedoglake.com/2010/05/25/the-myth-of-the-free-market/

[Overseas]

1. K&R ! //nt

[unblock]

2. for capitalism to work properly, the most important thing is genuine competition

and a marketplace that can make INFORMED decisions.

if there's no real competition, if there's a ton of disinformation or a lack of proper information, if there's psychological manipulation, if companies that screw up aren't permitted to fail, if companies losing in the marketplace routinely win simply by buying out companies winning in the marketplace and closing down their operations, if barriers to entry are routinely inhibiting new companies from competing, and so on, ...

... then none of it works as advertised.

companies in control of the marketplace are indeed free. free to charge both consumers and suppliers a premium for the privilege of participating in a marketplace dominated by their entrenched positions. for the rest of us, there's no much free about it.

[elleng]

4. Competition WITH REGULATION,

which must be unattached to those it regulates.

[unblock]

5. right. you can't trust competitors to play fairly

any more than you could trust nfl teams to play by the rules without officials.

[elleng]

6. I'd say, you can't trust PEOPLE to play fairly.

Not to disparage everyone, but I think its reasonable to suggest that EVERYONE needs rules and judges, in ALL of our endeavors. First, we have parents, second, we have teachers, and later, depends on where we are/doing what. Its just human nature, I think.

[Citizen Worker]

3. Thus the need for tort reform

One of the few remaining pieces that capitalism requires to completely run amok is tort reform. For if we the public are limited to puny monetary damages that are equal to projected earnings the full on rapaciousness of capitalism will be unleashed. With tort reform corporate risk managers will carefully calculate future losses due to lawsuits for faulty or unsafe products and from that determine just how shoddy they can get away with. Another term that applies is, cost/benefit analysis.

However, there's a tradeoff that We The People might want to consider. How about three strikes and you're out? Three convictions for substandard or unsafe products and senior management goes to prison for life and no possibility of parole and the corporation receives the death sentence.