Free Market

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"Free Market" (for libertarians) is a propaganda term, by which libertarians actually mean unregulated markets. Free markets cannot exist: they are an ideal model in economic theory. The vast majority of uses of "free market" are actually about real, regulated, imperfect markets, which are very little like free market models. Truly free markets would include markets for anything, including murder, and require perfect information and perfect competition. I recommend "unregulated market" instead of the propaganda term "free market".

(See Free Market Theory for the economic theory.)

Our actual markets, that libertarians call "free markets", are products of government:

In reality, the “free market” is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.
Robert Reich, "The Myth of the “Free Market” and How to Make the Economy Work for Us"

The identification of the "free market" with "laissez faire" was notably used in the 1962 Capitalism and Freedom, by economist Milton Friedman, which is credited with popularizing this usage.

Links

Free Market Theory (5 links)
Free markets cannot exist: they are an ideal model in microeconomic theory. While almost everybody accepts free market theory, the real world diverges from its assumptions very strongly.
Unregulated Market (5 links)
Includes black markets. In an unregulated market, you have the freedom to buy and sell whatever you want, no matter how noxious. Drugs, poisons, child prostitutes, slaves, beatings, torture, executions, military force, mass murder: all these are sold in unregulated markets. Libertarians generally oppose market regulation, and thus would produce these ills.
Economics 101 (47 links)
Also known as neoclassical economics and economism. Libertarians are fond of applying standard Economics 101 microeconomics principles to bash the state. They forget the many concealed ideological biases of Economics 101, they forget that the real world doesn't often match simple models, they forget market failures and they forget that microeconomics is not enough: you need macroeconomics too.
Free market (RationalWiki) [More...]
Discusses a number of problems and myths of related to the "free market" concept.
Free Market Double Standards
Several hilarious collections of examples of self-contradiction by free marketeers.
Free Market Fantasies: Capitalism in the Real World [More...]
"For those who are interested in the real world, a look at the actual history suggests some adjustment -- a modification of free market theory, to what we might call “really existing free market theory.” That is, the one that’s actually applied, not talked about."
Karl Polanyi Explains It All [More...]
Robert Kuttner explains how Polanyi's The Great Transformation: The Political and Economic Origins of Our Time is more relevant now than ever. "Contrary to libertarian economists from Adam Smith to Hayek, Polanyi argued, there was nothing “natural” about the free market."
Markets Are Created By Government (6 links)
Modern markets rely on stable property, transportation, currency, educated workers and customers, and other factors with enormous market failures. Remove the government infrastructure of these, and markets will shrivel.
Markets do it better and cheaper than government. Not. (1 link)
A common propaganda claim from Milton Friedman. Patently untrue for a number of market failures. An additional problem is that the products would be different, sometimes in undesirable ways, because markets have no incentive to create positive externalities
Microfinance (3 links)
A failed "free market" solution to poverty that libertarians and neoliberals trumpeted as better than government efforts. Also known as Microcredit.
Mixed Economy (12 links)
Existing markets are important parts of our mixed economies. The most socialist or communist economies in the world still use mixed markets, though they are more weighted towards central direction. Likewise the most capitalist economies, are still weighted towards central direction within corporations.
Ronald Coase And The Misuse Of Economics [More...]
How the Coase Theorem was misused by right-wingers to do the bidding of big business.
The case against free trade – Part 2 [More...]
"There is no such thing as the ‘free market’. It is an obfuscation used by elites to distort the public debate and create the impression that state regulations, consumer and worker protections and the like are costly distortions which undermine our welfare. What they really mean when they talk of the ‘free market’ is that these protections reduce their capacity to extract larger proportions of national income..."
The case against free trade – Part 3 [More...]
"These so-called ‘free trade’ agreements are nothing more than a further destruction of the democratic freedoms that the advanced nations have enjoyed and cripple the respective states’ abilities to oversee independent policy structures that are designed to advance the well-being of the population."
The Myth of the Free Market and How to Make the Economy Work for Us [More...]
Robert Reich lays out the facts about what the "Free Market" really is: a large set of rules managed by government that creates and enlarges markets.
The Myth of the “Free Market” and How to Make the Economy Work for Us [More...]
One of the most deceptive ideas continuously sounded by the Right (and its fathomless think tanks and media outlets) is that the “free market” is natural and inevitable, existing outside and beyond government.
Vulgar libertarianism (RationalWiki) [More...]
Vulgar libertarians are those who focus on those parts of a free-market policy that most benefit big business while ignoring other parts that would most benefit individuals and small businesses.


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Quotations

People who think "free markets" work in healthcare or the Internet are just as functionally stupid about economics as the most hardline Communist who thinks that the government should exercise full control of the toothpaste market. Most of the world understands by now that the second guy is a dangerous fool. But we're at a weird point in history where the first guy undeservedly has more credibility. He shouldn't--and he won't for long.
David Atkins, "Americans: we love paying more for less"
Normally, conservatives extol the magic of markets and the adaptability of the private sector, which is supposedly able to transcend with ease any constraints posed by, say, limited supplies of natural resources. But as soon as anyone proposes adding a few limits to reflect environmental issues -- such as a cap on carbon emissions -- those all-capable corporations supposedly lose any ability to cope with change.
Paul Krugman, "Crazy Climate Economics"
The majority of economic activity takes place without any direct connection to markets, undertaken in the household or government sector, or within large corporations that trade in the market sector, but use central planning to organize their own activities.
John Quiggin, "I Pencil: A product of the mixed economy"
Free-market fundamentalists prefer rejecting science to admitting that there are ever cases when government regulation is necessary.
Paul Krugman, "The Id That Ate the Planet"
In reality, the “free market” is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.
Robert Reich, "The Myth of the “Free Market” and How to Make the Economy Work for Us"
We would say in contrast to Friedman that “Underlying most arguments for a free market is a mistaken assumption that free markets and freedom are one and the same thing.” They are not. The degree of the market’s freedom is always a question within a free society. But there are many gradations of free markets and there can be multiple ways to draw the line between government and the market and all of them can comfortably sit under the rubric of a free society.
Howard I. Schwartz, "What Color Tie Do You Vote For?"