Includes black markets. In an unregulated market, you have the freedom to buy and sell whatever you want, no matter how noxious, no matter how fraudulently. Drugs, fake 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. Unregulated markets cannot correspond to the free market model because there is not perfect competition (assumptions of perfect information and rationality fail.)
- Fraud (3 links)
- Capitalism is about increasing one's own wealth, and one of the easiest ways is fraud. Libertarians generally oppose government investigation into fraud and regulation against fraud, despite government's proven track record and the lack of libertarian alternatives. Regulation of commercial speech is one of the main methods of preventing commercial fraud.
- Free markets need more regulation than you think [More...]
- "... the existence of a free market where individuals can freely pursue their economic desires and enjoy the fruits of their labor is a product of freedoms secured through government regulation... it is no coincidence that the market economy only really began to develop when the modern democratic state did too."
- How Crowdworkers Became the Ghosts in the Digital Machine [More...]
- "Since 2005, Amazon has helped create one of the most exploited workforces no one has ever seen." "According to critics, Amazon’s Mechanical Turk may have created the most unregulated labor marketplace that has ever existed."
- Non-compete Clauses In Contracts (3 links)
- Non-compete clauses in contracts are a restraint on trade that reduces the liberty of employees by requiring them to give away their rights to get a job. Recent research has also shown that these clauses are economically harmful. Liberals think such clauses should be unenforceable, just as slavery contracts should be unenforceable. Libertarians (a) often think you should be able to sell your rights or (b) don't care about workers.
- Ross Ulbricht aka Dread Pirate Roberts and Silk Road (1 link)
- Eagle Scout become libertarian become bitcoin drug dealer become buyer of murder. An example of how Bitcoin can not guarantee anonymity. As "Dread Pirate Roberts", he created the Silk Road unregulated market for drugs and other black market deals.
- The Elasticity of Demand With Respect to Product Failures; or Why the Market for Quack Medicines Flourished for More Than 150 Years [More...]
- Markets did not punish the quack medicine industry due to unusually low elasticity of demand with respect to product failure and bounded rationality. The conclusion mentions that recent resaerch shows the FDA increased consumer welfare.
- The U.S. Only Pretends to Have Free Markets [More...]
- "From plane tickets to cellphone bills, monopoly power costs American consumers billions of dollars a year... What the middle class may not fully understand, however, is that much of its stagnation is due to the money that monopolists and oligopolists can squeeze out of consumers. "
Though free market theorists are reluctant to admit it, capitalists are not fond of free markets, since open and fair competition forces them to invest in product development while they cut their prices. Monopoly and the destruction of competition is the ideal condition for the entrepreneur, and he will strive to achieve it unless restrained not by conscience but by an outside agency enforcing “anti-trust” laws.
Ernest Partridge, "A Dim View of Libertarianism, Part VII -- Some Concluding Questions"
But the key thing that Hayek grasped that many modern advocates of laissez faire don't is that government regulation of markets is not the same thing and not even close to being the same thing as full-on central economic planning.
John Aziz, "Free markets need more regulation than you think"
The FIRST product sold in an "unfettered" market system would be fetters.
Mike Huben, "Libertarianism in One Lesson; The Third Lesson"
Professor Hayek... does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.
George Orwell, "Review by Orwell: The Road to Serfdom by F.A. Hayek / The Mirror of the Past by K. Zilliacus "
Vulgar libertarian apologists for capitalism use the term "free market" in an equivocal sense: they seem to have trouble remembering, from one moment to the next, whether they’re defending actually existing capitalism or free market principles. So we get the standard boilerplate article in The Freeman arguing that the rich can’t get rich at the expense of the poor, because "that’s not how the free market works"--implicitly assuming that this is a free market. When prodded, they’ll grudgingly admit that the present system is not a free market, and that it includes a lot of state intervention on behalf of the rich. But as soon as they think they can get away with it, they go right back to defending the wealth of existing corporations on the basis of "free market principles."
Kevin Carson, "Studies in Mutualist Political Economy", Chapter 4 Introduction.