Comments on: Economic Regulation and the Myth of Free Markets http://www.dismountingourtiger.com/sustainable-economies/economic-regulation-and-the-myth-of-free-markets/ He who rides a tiger is afraid to dismount Thu, 01 Dec 2011 04:42:08 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Anthony Usher http://www.dismountingourtiger.com/sustainable-economies/economic-regulation-and-the-myth-of-free-markets/comment-page-1/#comment-173 Anthony Usher Thu, 18 Jun 2009 12:22:14 +0000 http://www.dismountingourtiger.com/?p=34#comment-173 I paraphrase the words of Pontius Pilate, "I find absolutely no fault with this article. This was an excellent job! Republicans are guilty of betraying Adam Smith by peddling the myth that he was opposed to any form of governmental regulation. They have used his theory for almost 250 years to promote deregulation and look where it landed us. This was a calculated distortion of the truth. The facts are that Smith never advocated that government regulation should not intervene to set and enforce minimum social, health, worker safety, and environmental standards in the common interest or to protect the poor and nature from the rich. Given that most governments of his day were monarchies, the possibility probably never occurred to him. Anthony: Thanks for your comments. Britain had their Corn Laws (corn meaning any grain), sugar regulations and a host of protectionist laws that favored the fortunes of the 1200 families that controlled Parliament; there wasn't a free market in any major product; crony capitalism was the order of the day then and now. A major difference is that those who "owned" the pools of wealth (property) managed them and the risks they took were risks to their own fortunes and the regulations they voted for protected their fortunes; now most pools of property are controlled by hired guns (bank and corporate executives, hedge fund managers, etc.) ... who, in an unregulated environment, can enhance their own fortunes while depleting or polluting the pools of resources they manage.... these are the people funding politicians who call for deregulation and foster the myth of free-markets. Ed Lee I paraphrase the words of Pontius Pilate, “I find absolutely no fault with this article. This was an excellent job! Republicans are guilty of betraying Adam Smith by peddling the myth that he was opposed to any form of governmental regulation. They have used his theory for almost 250 years to promote deregulation and look where it landed us. This was a calculated distortion of the truth. The facts are that Smith never advocated that government regulation should not intervene to set and enforce minimum social, health, worker safety, and environmental standards in the common interest or to protect the poor and nature from the rich. Given that most governments of his day were monarchies, the possibility probably never occurred to him.

Anthony:
Thanks for your comments.

Britain had their Corn Laws (corn meaning any grain), sugar regulations and a host of protectionist laws that favored the fortunes of the 1200 families that controlled Parliament; there wasn’t a free market in any major product; crony capitalism was the order of the day then and now. A major difference is that those who “owned” the pools of wealth (property) managed them and the risks they took were risks to their own fortunes and the regulations they voted for protected their fortunes; now most pools of property are controlled by hired guns (bank and corporate executives, hedge fund managers, etc.) … who, in an unregulated environment, can enhance their own fortunes while depleting or polluting the pools of resources they manage…. these are the people funding politicians who call for deregulation and foster the myth of free-markets.

Ed Lee

]]> By: bill greene http://www.dismountingourtiger.com/sustainable-economies/economic-regulation-and-the-myth-of-free-markets/comment-page-1/#comment-5 bill greene Sun, 29 Mar 2009 04:15:36 +0000 http://www.dismountingourtiger.com/?p=34#comment-5 It is true that there are few if any nations with totally free markets, because a minimal governing system is needed to provide the safety, judiciary and police to maintain order and protect private property and enforce contract law. What is important is to establish a free and open economy that enables all citizens to engage in enterprise that enhances their own financial well-being. Too much regulation stifles both initiative and progress. Thus a balance is needed. Since all actual production comes from the private enterprise of the people, the major requirement is to merely empower them without oppressing their efforts. Recognize that the government does nothing of value except protect and enable the people to work effectively. Restrictions against monopolies and unfair trade practices, fraudulent business arrangements, and mimimal standards in food industries may be needed. Minimum standards for safety in banking institutions are desirable. However, excessive mandates, licensing and regulatory burdens must be applied carefully because every government order suppresses the initiative of the people and adds wasteful overhead to the cost of production. Advocates of big government like to state that "free markets" are undesirable, and then conclude that controlled markets are desirable. But they merely have set up a "straw man." No one wants or advocates a totally free market. But excessive regulation dooms a nation more than a free market ever would. The proper balance is revealed in the annual reports of economic freedom of the world published by The Fraser Institute and the Heritage Foundation. The editors evaluate "the relative degree of economic freedom" in each of over 125 nations in the world. There appears a very clear correlation between economic freedom and the disposable income of the citizenry. Those reports show that nations that do not encourage the productive activity of its people suffer financially; that nations with large bureacratic governments and high taxes do not prosper economically. And it is not democracy per se that helps a people, but economic freedom, open economies, and safe secure environments. Big government is the enemy of economic freedom. That government governs best that governs least. It is true that there are few if any nations with totally free markets, because a minimal governing system is needed to provide the safety, judiciary and police to maintain order and protect private property and enforce contract law. What is important is to establish a free and open economy that enables all citizens to engage in enterprise that enhances their own financial well-being. Too much regulation stifles both initiative and progress.

Thus a balance is needed. Since all actual production comes from the private enterprise of the people, the major requirement is to merely empower them without oppressing their efforts. Recognize that the government does nothing of value except protect and enable the people to work effectively. Restrictions against monopolies and unfair trade practices, fraudulent business arrangements, and mimimal standards in food industries may be needed. Minimum standards for safety in banking institutions are desirable. However, excessive mandates, licensing and regulatory burdens must be applied carefully because every government order suppresses the initiative of the people and adds wasteful overhead to the cost of production.

Advocates of big government like to state that “free markets” are undesirable, and then conclude that controlled markets are desirable. But they merely have set up a “straw man.” No one wants or advocates a totally free market. But excessive regulation dooms a nation more than a free market ever would. The proper balance is revealed in the annual reports of economic freedom of the world published by The Fraser Institute and the Heritage Foundation. The editors evaluate “the relative degree of economic freedom” in each of over 125 nations in the world. There appears a very clear correlation between economic freedom and the disposable income of the citizenry.

Those reports show that nations that do not encourage the productive activity of its people suffer financially; that nations with large bureacratic governments and high taxes do not prosper economically. And it is not democracy per se that helps a people, but economic freedom, open economies, and safe secure environments. Big government is the enemy of economic freedom. That government governs best that governs least.

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