Charlie Stross wrote:
> The most important precondition that must apply before a market can
> function properly is that the market must be _fair_. That is, it is
> necessary for competitors to abide by contracts, obey market regulations
> (which should admittedly be as minimal as possible), and compete on
> the merits of their products.
No, a free market requires that companies:
1) refrain from using physical force to coerce others
2) abide by the terms of any contracts they voluntarily agree to
3) refrain from committing fraud (in a narrow sense) in the course of
business dealings
That's it. Nothing else.
Exactly what companies compete on is up to their customers. In some markets
technical features may be the dominant consideration, but in others it may
be price, simplicity, reliability, company reputation, service and support,
or just about anything else imaginable. There is no place in a free market
system for self-appointed 'experts' who debate what criteria they think
consumers *ought* to use, and second-guess the decisions of the market by
government fiat.
The idea that markets need to be 'fair' is simply another justification for
endless socialistic intervention on the part of government. Competition can
never, ever be 'fair', because no two companies will ever have the same
information, resources, technology base, corporate culture or market
position. Competition is always a matter of disparate organizations
approaching a market in different ways with varying degrees of competence.
Any attempt to change this inevitable fact of nature will run afoul of the
same problems that turn government welfare programs into fiascos - in order
to promote 'fairness' you have to punish those who are successful by
confiscating their assets, which you then bestow on those who are less
successful. You have to pass laws forbidding useful new innovations, in
order to preserve laggard businesses who have trouble coping with them. In
short, you must reduce the efficiency of the market by punishing productive
behavior and rewarding unproductive behavior.
The best known way of running an economy is to establish a rule of law which
constrains force and fraud and enforces contracts, and then do *nothing else
whatsoever*. The resulting market will not always produce the best results
imaginable, but it *will* always produce better results than any other
system that has ever been tried.
Billy Brown
bbrown@transcient.com
http://www.transcient.com
This archive was generated by hypermail 2b29 : Thu Jul 27 2000 - 14:09:13 MDT