Will the free market solve everything?

John K Clark (johnkc@well.com)
Mon, 24 Feb 1997 00:38:40 -0800 (PST)


On Sun, 23 Feb 1997 J. de Lyser <gd33463@glo.be> Wrote:

>i think people have a list of priority problems, and the lowest on
>the list, of those with money will never get solved.[...] A good
>example is that of our failure to find a solution to increase the
>standard of life in third world countries.

I have 2 Questions:
1) If rich people in western countries are not interested in paying money to
increase the standard of living in the third world, why is it likely that
the poorer people in western countries would be willing to pay?

2) If people don't want to voluntarily give money, why would they vote for a
politician who forces them to?

>A pure free market system can't guarantee a fair amount of social
>mobility through education. As it is based on keeping the 'have
>nots' dumb.

A well educated consumer is a prosperous consumer so a prosperous consumer
consumes more than a ignorant consumer and that is very good for business. An
ignorant follower with blind patriotism is good for the king but an educated
follower might get ideas, and that is not good for our fearless leader.

>A free market system can work, but not without guarantees.

This is not Mathematics, forget about certainty. In the real world no social
system, not dictatorship not democracy and not the market, can give you any
guarantees. I will admit that the market does better than government only 95%
of the time, but we can live with a little inefficiency in the remaining 5%.

>I'm not talking about giving away things or sharing the wealth here,
>i'm talking about investing in people so that they will be able to
>work themselves into a position where they can buy more of your
>services or goods.

If you're really serious about the word "investing" then that's a job for
free enterprise. Unfortunately whenever some entrepreneur try's to do just
what you suggest, for reasons I don't understand, he is treated as a great
villain and people throw around words like "exploitation" and "sweatshop".

William Kitchen bill@iglobal.net Wrote:

>You are a successful but still small start up with only a single
>product on which you are completely dependent. I am a giant
>corporation with hundreds of profitable products and vast resources.
>I could give widgets away free of charge for years without any
>significant suffering. So I capture the widget market

As an expert of widget manufacturing I can form 3 conclusions.
1) Widgets are expensive to make, if you're giving them away you're lousing
a ton of money.
2) Widgets will not be free forever.
3) I hope you are very stubborn and I hope you're corporation has a LOT of

I buy (not the right word really, they're free) widgets by the warehouse full
from you, if you can make them I will buy them and then ask for more.
Now that demand is so huge you MUST build more widget factories if they are
to remain free or even just cheap, and after you finished that factory you
must build another one and then another. When the day comes when you regain
your sanity or just go broke I will have a huge supply of widgets that cost
me nothing to obtain that I can sell for many years at an enormous profit.

>Capitalism is good, but it is not perfect.

That's true, and history has taught us that government always works with
absolute perfection.

Damien Broderick <damien@ariel.ucs.unimelb.edu.au> Wrote:

>Tell Rupert Murdoch's British newspaper competitors that. I've
>forgotten the details, but there was recently a trade war in which
>his vast slush fund subsidised what were effectively give-aways for
>months on end (I believe), which not only starved the other papers
>and drove them to the wall but had the effect (or was so intended;
>I don't know how effective it was) of shifting consumer
>loyalty/habit-of-purchase to his product.

I confess I know nothing about your example, however I find it impossible to
believe that price was the only or even the most important factor in the
success of Murdoch's newspapers, people must like them. There are lots of
newspapers I wouldn't read for free, and some you'd have to pay me to read.

John K Clark johnkc@well.com

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