18 April 2010

There Are No Unregulated Markets

The Angry Economist | No Free Markets!

There is no such thing as a free market. There are only markets regulated by customers, and markets regulated by politicians. If you want your markets regulated by politicians, you have to believe that they are better at running your own life than you are.
Interesting way of putting it.

I've heard a similar description of central planning: the alternative to central planning is not a lack of planning, but distributed planning -- each of us working to our own plan.

I think the desire to have markets beholden to politicians rather than customers stems from the erroneous belief that elected officials are more responsive to us than are corporations.  I ventured a guess about how this views arises here.

I think another issue is that Americans are strongly indoctrinated into the idea that the minority in a democracy does not get to have their way.  Sure, you wave your picket signs and buy your snarky bumper stickers, but ultimately you accept that most people do not agree with you, they get to decide what happens and you don't.

In contrast, I don't think people appreciate that being in the minority of customers means that you might not get your way.  Take all the rending of garments about a hypothetical mom-and-pop hardware store being put out of business when a Home Depot opens nearby.  Most people upset by that don't stop and think that mom and pop went out of business because most people wanted to shop at the big store.  Home Depot didn't do anything nefarious, they just attracted lots of customers.

Those upset are in the minority regarding shopping preferences, but instead of accepting that they do not get their way this time they look for the the state to come along and hobble the competition, harming the majority to benefit the minority.  All this despite the fact that it is much easier for a niche market segment to have their desires satisfied by the market to than for a niche ideological group to have its desires satisfied by a democracy.

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