There is no such thing as the free market
There are some days when I click on links even though I’m fairly certain they’re going to make me sigh. Maybe it’s because it’s a slow day at work – it is, today, and also one of those days when one wishes one could just be outside in the gorgeous weather – or maybe it’s out of sheer curiosity.
Ginandtacos.com‘s article Pretzels and Spite is a good, interesting blog with excellent points. I enjoyed reading it, but I keep coming back to one thing: The unencumbered free market is only good at one thing: lowering prices.
Perhaps this is true – something that’s certainly up for debate, and something that I, with my degree in economics (with a concentration in finance at that; I know, however do I live with myself) don’t agree with – but it’s not even an assertion that’s demonstrated in the example. The airline industry isn’t unencumbered; in all honesty, the “unencumbered free market” doesn’t exist in this or any other capitalist country. How can I say that? Because we have government regulation. Every capitalist country has some degree of government regulation, and there isn’t an industry that’s untouched by it.
To continue with the airline industry example, yes, price regulation has ended. But after 9/11, it was replaced with a who slew of other kind of regulations that affected airline practices, affected and continues to affect airline customer experience, and undeniably affect the bottom line. People don’t fly as much as they otherwise might. It’s a pain in the ass. It’s also something the airlines can’t directly do a thing about, and thus in order to stay solvent they have to cut amenities.
It sucks, but it isn’t an unencumbered free market.
This is not to say I’m against government regulations – I wrote my economics thesis on environmental regulations and the use of emissions trading to meet said regulations – but simply to say that we don’t have a true free market. Period. And I don’t think we should, but equally, we cannot judge what an unencumbered free market can accomplish when it doesn’t exist.