Re: Will the free market solve everything?

bill@iglobal.net
Mon, 24 Feb 1997 21:07:46 +0000


> >It's true, the market can not find a solution to a problem if
> >nobody wants a solution to that problem, but problems that don't
> >need fixing are not problems.
> >
>
> [snip]
>
> Hmm, yes, I would *like* to believe this, but isn't it sometimes the
> case that there can be a problem that nobody (except a few experts,
> say) *sees* as a problem (or nobody *wants* to see as a problem -
> say the presence of large numbers of automobiles, for instance), so
> nobody seeks a solution to the problem, so the market won't find
> one? Isn't this the sort of thing Joost is talking about?

I think that has always been one of the central problems in creating
a functional and just system of government. Some important problems
will require specialized knowlege just to recognize them. Free
markets are not effective at solving such problems. The squeaky
wheel will get the grease, while another silently deteriorates until
it breaks. Even worse, not everything that is good or desireable for
individuals or small groups will be good for the society as a whole.
In these cases, free markets are worse than ineffective. Please do
not ASS-U-ME that I am arguing that free markets are a bad thing.
My point is only that they are not a viable solution to every
problem.

Recognizing this is easy enough. But dealing with it is not. I
doubt that it is possible to devise a system that can perform
optimally for every possible circumstance. I think that the most
reasonable approach is a system that has ample provisions for
correcting itself so that the distinction between that which is
governed by pure market dynamics, and that which is governed by the
collective authority, can be adjusted either when circumstances
change or when previous decisions prove to be either
counterproductive or ineffective. Most democratic governments
already attempt to acheive this kind of balance. They have not been
completely successful in reaching this iedal, but they still have
performed better than most other systems.

> I'm always torn by this question: do we admit that some people may
> be in a position to notice things most of us can't or won't, and do
> we grant them power to effect changes that would be beneficial to
> us all?

The first part is easy. It would be foolish not to admit that such
is the case. But even with that, the second question remains a
difficult one. Largely for the reason you mention below.

> (Take a look at Mancur Olson's work, for instance, where
> he shows that majority interests often gets shafted by better
> organised minority interests) Then you get into "Who watches the
> watchmen?" stuff - a *very* old and knotty problem.
Peace,
William Kitchen

bill@iglobal.net

The future is ours to create.