The free market - do you believe in it

lil dickie said: "John D Rockefeller surely didnt. JP Morgan didnt either. Do YOU believe in the concept of a pure "Free market" that operates completely freely and without bias?"

ratAphooey said: "No. I believe in a basically free market with some government oversight."

Airelon said: "Ok, I'm going to take a break from editing my post in the "Oh Crap" thread. :) I've studied a lot of economies and economic laws, and one stands out to make the most sense. For the most part, it allows for free-market. Let the market set the price. With three exceptions. [B]1) Food[/B] People have to eat, and they have to be able to afford to eat. You can't screw with food prices. That has to be controlled. Otherwise, we have the current problem. Playing the 'interest' game - causes food prices to rise with other commodities speculation. And eventually, you end up with a $9.00 bushel of wheat. Food must have price controls in place. [B]2) Land[/B] People have to live, and need a place to live comfortably. People cannot lose their homes. They need a roof over their head. The best land should not be bought because you are rich, and you can afford to buy the best at Lake Tahoe. This creates class disparity, which in the long run (200 year) bites the rich in the ass. Therefore, it doesn't lead to prosperity. It will eventually come to hurt the rich. It hurt profits in the long term. It hurts wealth. [B]3) Interest[/B] People can't be mortgaged up to their eyeballs and enjoy prosperity for the long run. As we see, they can in the [i]short-term[/i] and that's the danger. Credit Card companies that charge 22% should be charged with Usury, if those laws were still on the books, and have to pay back 3'x the money they have gained of such exploitation. Past those three things? I believe in utter and complete free market. The reason I believe that those three things need controlled in an ideal economy - is because human beings are by nature - short-sighted selfish creatures. We do what is best for own individuality in the short term, with absolutely no thought as to how it will affect us in 15 years. Much less 200. Humans take the attitude of "We'll figure it out" and just do what is best for us in the short-term. We don't make it easy for everyone to attain wealth. Since we view things in the short-term - we see wealth as a zero-sum game, and try to grab our 'spoon' as it were from everyone else. We all, rich and poor alike, end up being at fault for class disparity. Instead of realizing that over time, wealth can be created. God. I should write a book. :)"

AlfredSokol said: "22% interest? I wish. I am the proud owner of 3 credit cards with 32.5% interest on them! I didn't even know it was legal. Do you know that all three companies raised the rate on me despite being on-time? That is correct, I was charged the "default" rate on three unrelated accounts because of a late payment on a loan. Ain't life grand?"

Heather said: "It's "fair" to some degree, but not as far as the consumer is concerned. Companies still have the upper hand in pricing. I've noticed the price of food inching up - slowly but surely. $.15 cents here $.20 cents there - at the grocery store. Fast food restaurants, too. Boston Market raised some of their prices by about a dollar, Chipotles went up by $.20. I won't even get started on gas. LOL. The consumer has to pay if he or she wants something - so it's free in that respect anyway."

lil dickie said: "I dont think a true "free market" exists anywhere in the world. And Im not sure it can. The law of supply and demand should dictate pricing but there are so many other factors to consider. Look at how high energy costs can affect disparate markets."

Airelon said: "[QUOTE=AlfredSokol;59748]22% interest? I wish. I am the proud owner of 3 credit cards with 32.5% interest on them! I didn't even know it was legal. Do you know that all three companies raised the rate on me despite being on-time? That is correct, I was charged the "default" rate on three unrelated accounts because of a late payment on a loan. Ain't life grand?[/QUOTE] :shoot: I think I would shoot myself. ([i]kidding[/i]) I know I would use any capital I had to pay them off immediately though. I'd take it out of stocks, active and passive income, everything. You're right. I didn't know that 32.5% was legal either. But when has that stopped them. We just got notice that all of our international purchases on our VISA's? You know, where they charged us an "international fee" because we were in Prague or Germany or Canada? Was illegal, and we are going to be refunded. Of course, you won't see them refunding it with interest. Such companies are the scum of the earth."

AlfredSokol said: "Believe me, I would love an easy way out like shooting myself but I'm one to suffer my way through. But this is the main reason my investing has been minimal this year. No point investing when paying off debt returns higher."

newinvestor123 said: "[QUOTE=lil dickie;59765]I dont think a true "free market" exists anywhere in the world. And Im not sure it can. The law of supply and demand should dictate pricing but there are so many other factors to consider. Look at how high energy costs can affect disparate markets.[/QUOTE] No, it doesn't. I think a truly free market, devoid of government regulation, is the next step in the economic ladder - But for that to really work, people are going to have to have knowledge about the laws of supply and demand and consciously apply that knowledge to their every day lives. In short, people are going to have to be more[B] responsible[/B] in terms of their part in society. Might be a long time before people are capable of that..."

EWhytsell said: "I'm all for a 100% free market. The people who can navigate life the best will come out ahead and those who fail will be trampled. Hehe bet you can tell Star Treks Farengi are my heroes:-) Evan"

JAP said: "The free market ended right after the 1987 crash... when Ronald Reagan approved and appointed the "Presidental Working Group" aka the "Plunger Protection Team" (PPT)."

FirefighterB said: "[QUOTE=Airelon;59766] You're right. I didn't know that 32.5% was legal either. But when has that stopped them. We just got notice that all of our international purchases on our VISA's? You know, where they charged us an "international fee" because we were in Prague or Germany or Canada? Was illegal, and we are going to be refunded. Of course, you won't see them refunding it with interest. Such companies are the scum of the earth.[/QUOTE] I couldn't agree more. I got one of these, too. How are you doing it? I spent two months there and definitely a few thousand dollars on my CC. However, I don't think I can easily go back and see how much. Are you doing the estimation? As for my views on the market, I agree that I don't think it can ever be totally free; there is always something that perverts the system. But, I sure would love to see it run as close as possible."

AlfredSokol said: "The U.S. can't really have a free market when there are anomalies like the Post Office and Amtrak. Why are some industries protected and others aren't?"

DarkStraw said: "I believe in the free market "theory" food is one of the cheapest things in america, i dont see why you would regulate that. in fact the government subsidizes meat and unhealthy foods heavily while they hardly subsidize fruits and vegetables at all. For a free market to work though your going to need a good legal system, and strong property rights. The problem with land right now is that it IS overregulated, in favor of the rich in most cases. As far as interest goes, i think that would be solved with a free market banking system.but there already is solutions like [url]http://www.prosper.com/[/url]"

AlfredSokol said: "Prosper.com is an interesting idea."

Maverick Investor said: "It's interesting in theory, but like others, I don't think it works that well in practice. in fact, I suspect the entire concept is something of a smokescreen, benefiting those who work behind it in markets that are anything but free. Examples? Visa and Mastercard that you guys have been talking about! How can it be even justifiable to charge 32%??? Cheers!"

Airelon said: "That's when free market fails. Note, I did not say free market fails. I said that's [i]when[/i] you'll see it fail. As individuals we can show charity, love, kindness, mercy and assist others to lead better lives. As a species? If we can't kill it, maim it, enslave it, screw it, or make a buck off it? We're not interested. As a species we've shown that we will always try to take advantage of others. If the weaker individual is not as smart as a more powerful human institution? We as a species, ([I]or a human institution[/I]) will always take advantage of it. See the sub-prime mess for an example. Folks who did not realize what were going on? Did corporate investing institutions ever stop to consider the morality of what they were doing with ARM's? Nope. The human institution only saw the short term benefit to themselves, at the expense of those individuals who were not as financially savvy or intelligent. And human nature proved itself once again. Free market functions on the macro level. Not the individual micro-basis. Therefore, it tries to run off of what we are like as a species. Which is why we run into such problems. I believe in free market ideals as long as it doesn't deal with interest, food, or land / housing. Those are what is necessary for life and if free market tries to work with those three issues, our base collective nature can give rise to an ugly situation. Now the question to ask is: In the long run - who pays the price? We all do. We end up screwing ourselves. Again, the sub-prime mess is just the latest example. Those individuals who weren't guilty of anything, end up paying the price."

Maverick Investor said: "That's a very insightful....er....insight! So if there was only a handful of us on the planet, the free market might work pretty well. It's only when there's a load of us that we act like collective jerks. Where now, then, I wonder? Cheers!"

lil dickie said: "Self interest trumps most other concerns."

Airelon said: "[QUOTE=lil dickie;59930]Self interest trumps most other concerns.[/QUOTE] Ideally. I agree. But we have a very difficult time figuring out what exactly [i]is[/i] self-interest. Our short-term view of things, combined with our lack of insight, foresight and intelligence can end up biting everyone in the butt. Self interest should mean that as a species, we promote understanding, wealth, education to those less favored and in poor situations, etc. Because in the long run, we will end up benefiting ourselves and our own wealth. It's a long term investment in our own self interest. Time and time again, history demonstrates that when the wealthy do not consider those without wealth, when they do not try to raise the standard of living of groups outside of themselves - their own wealth is what gets hurt in the end. Because the poor were never favored and assisted with financial insight, they come up with half baked insane ideas as to how to better their own lot in life. Such as communism. Or socialism. And the wealthy end up footing the bill. Unfortunately, most people don't think that of the long-term investment to their own self-interest that aiding others provides. They think self-interest means just what 'they can get and profit by', and they end up screwing themselves over in the long run."

DarkStraw said: "i dont understand your arugments against free market, are you saying if the government dosent help the poor no one will?"

Airelon said: "I'm not arguing against free market at all. I'm just saying it has pitfalls. It also has beautiful and gorgeous benefits. It is a system that can find inefficiencies and correct them. It rewards hard work and punishes laziness. The [i]worst[/i] thing that can happen, is a government gets involved to try to help. That's proven itself to be one of the biggest blunders a society can make. I'm saying that free market works, but for 3 exceptions. Land / Home ownership. Food. Interest. Anything else? I love free market ideals. As far as governments go, it's a governments responsibility to protect it's citizens. As far as an economy, the laws should only read to protect citizens when it comes Land / Home ownership. Food. Interest. As well, there have to be laws - obviously guarding against the usual stuff like fraud, etc. As far as helping the poor, I'm saying that the wealthy as a class have to decide to help the poor on their own, individually. Not feeding and clothing them (though that ain't bad on an individual basis), but teaching them that they took can take care of themselves and become wealthy. An intelligent society defends it's own wealth, by making sure that those who are lower down on the economic ladder understand that their situation [i]can[/i] improve. That wealth is not a zero-sum game. Stolypin died trying to convince people of that fact. His enemies - the Bolsheveiks, Mensheveiks, Socialists, Communists - stating [I]they [/I]were out to 'help the poor' shut him up. And quickly raped the wealthy of everything they had, and then turned their attention to raping the poor."

thezster said: "[QUOTE=Airelon;59766]:We just got notice that all of our international purchases on our VISA's? You know, where they charged us an "international fee" because we were in Prague or Germany or Canada? Was illegal, and we are going to be refunded. [/QUOTE] Got the same notice.. and settlement check...... sometimes class action suits are a good thing..... (when I get a check for doing nothing)....."

Airelon said: "Yeah, you ain't kidding. Someone asked about that when I brought that up. We guesstimated one of ours that we were sure of. Since we had multiple cards, we got a couple of notices. The other, we just took the quick $25 - because we weren't sure which countries we had used it in."

AlfredSokol said: "The concept of Laissez-Faire should apply to the [url=http://en.wikipedia.org/wiki/Free_market]free market[/url] [quote] The necessary components for the functioning of an idealized free market include the complete absence of artificial price pressures from taxes, subsidies, tariffs, or government regulation (other than protection from coercion and theft), and no government-granted monopolies (usually classified as coercive monopoly by free market advocates) like the United States Post Office, Amtrak, arguably patents, etc. [/quote] When you think about how many industries are taxed at multiple levels, you have to question how the taxes alone aren't changing the price."