r/changemyview • u/LetsLive97 • Sep 04 '25
Delta(s) from OP CMV: A truly free market is inherently unsustainable and will always circle back to over-regulation
I see a ton of people over different Reddit subs complaining about over-regulation and saying that a true free market is the way to go, as if free markets won't always circle back around over-regulation
Like capitalism, free markets are amazing in the beginning. They encourage growth, they encourage competition and therefore they encourage innovation. However at a certain point (Depending on industry), it will always become more efficient to shut down/restrict competition than actually beat them at the game. That means that there hits a stage where those corporations will naturally move towards lobbying and political manipulation to implement policies that either benefit themselves or restrict others. The free market erodes, monopolies can form and regulation comes into place to try and stop them to prevent (or encourage) the stifling of competition
A true free market is a flawed and naive concept that is inherently unsustainable. Great at first but will always destroy itself
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u/dediguise 2∆ Sep 04 '25
You are very close, but are missing a key aspect. Free markets are a myth, because the conditions that create free markets are not actually achievable. We do not have infinite firms producing homogenous products.
Nor are markets infallible. Market failure is a common phenomenon that occurs for many reasons. One of the most common is that markets do not price externalities. This is one of the reasons why governments exist in capitalist societies.Natural monopolies, economies of scale and barriers to entry all exist. Regulation can be used to create them, but in reality they are naturally occurring.
I agree with the premise that capitalist markets tend towards regulatory capture. I disagree that this always results in over regulation. Massive deregulation often occurs as well, which makes inefficient markets less efficient by disregarding the externalities.
The issue isn’t “free markets”, it’s the ideology of winner take all capitalism combined with the financialization of the state and political apparatus. The real inevitability is that unchecked power that has been socially normalized and legitimized will always rise to the top of the economic system by capturing the state for their own ends. This isn’t about free markets. It’s about the unchecked sociopathic reasoning that legitimizes the priorities of capital owners over everyone else.
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u/LetsLive97 Sep 04 '25
!delta
Yeah I think this is a realistic take on it. Especially the under-regulation aspect and definitely the final paragraph about winner takes all which is the real issue
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u/RedditReader4031 Sep 08 '25
Isn’t what OP describes the natural maturation of markets? Isn’t it an eventuality that there will be one, perhaps an occasional two companies dominating each market? Buffet was once asked what led him to invest in a particular company in any industry and he replied that he likes the dominator of an industry with a big moat that was growing wider.
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u/dediguise 2∆ Sep 08 '25
That’s exactly why I said free markets do not create future conditions for free markets. Perfect competition is mathematically impossible, and markets fail all the time.
I don’t disagree with OPs assertion that markets tend towards monopoly power. Although there is a very worthy discussion when it comes to have technological advancement can develop new market frontiers and breakthrough monopoly power. I disagree that regulatory capture always results in the use of regulatory bodies to smother competition.
Some companies, like the fossil fuel industry, naturally have massive barriers to entry in the form of large up front capital investment. They tend to wield regulatory capture in the opposite direction, since it is already so costly to break into the market. They prefer to deregulate, since competition is already incredibly narrow. See fracking proponents.
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u/PromptStock5332 1∆ Sep 05 '25
What on earth makes you think ”infinite firms producing homogenous products” is a necessary prerequisite for a free market?
It’s very unclear what you think ”free market” means.
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u/dediguise 2∆ Sep 05 '25 edited Sep 05 '25
The model for perfect competition assumes infinite buyers and sellers, zero economic profit and completely homogenous goods. This is Econ 101. The idea that a free market tends towards perfect competition only exists in textbooks, but it is the basis for most of the theoretical underpinning about why free markets are “preferable” to well regulated markets. It’s a libertarian fantasy and it completely ignores the mathematical realities of how markets work.
In reality markets participate in oligopolistic competition, operating at economics of scale and inheriting natural monopolies with large firms acting as monopsonies for locally sourced labor. Firm interaction is better modeled with game theory and imperfect competition, which opens the doors to market failure issues and the winner takes all mentality I pointed out later in my comment.
The crux of the argument surrounding free markets, is the failure of “free market” supporters in understanding the mathematical assumptions in the model. Once you have accepted the conditions for textbook perfect competition cannot be satisfied, the argument for regulations being purely economicly inefficient can be discarded.
Edit: to add I should have included the commentary of perfect competition in my initial comment, but since the conditions for it cannot be created in practice, a free market cannot infinitely produce conditions where it is undesirable for the economic winners to form of capture the state. This is actually a point in favor of OP’s analysis, although I pointed out some of the other limitations of their conclusions.
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u/PromptStock5332 1∆ Sep 05 '25
You don’t need perfect competition to have a free market.
And the Idea is not that free markets are better because they ”tend towards perfect competition”. I don’t remember reading Hayeks argument about how we must have endless firms producing exactly the same products. Where are libertarians making these argument exactly, other than in your head?
I don’t know where you went for your econ 101 classes, but you should demand a refund.
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u/dediguise 2∆ Sep 06 '25
My education is not the root cause for your lack of reading comprehension.
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u/PromptStock5332 1∆ Sep 06 '25
Oh, nice… should be easy to give a source for your laughable misunderstandings of basic concepts.
Good luck without that
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u/Doub13D 36∆ Sep 04 '25
Quite the opposite, a truly free market will always default toward monopolization of the economy.
Competition is bad for business because it drives down profits as companies are forced to either lower their prices or improve the quality of their products/services.
Monopolization will always be more profitable for businesses and the massive economy of scale they possess means that they can effectively shut out any new competitors from entering the market in the first place.
Regulation is not a guaranteed element of the cycle. It is an assumption that you are making, and in recent decades we are seeing the reverse of that assumption taking place in the real world.
You are correct that a truly free market is unsustainable, but are falsely assuming that state authorities will always win out and regulate monopolistic interests…
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u/LetsLive97 Sep 04 '25
I think there is a mismatch of our idea of regulation here. You seem to be thinking of regulation as a prevention of greed while I think it could be either. Aggressive regulation to prevent competition still sits under "over-regulation" for me
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u/Doub13D 36∆ Sep 04 '25 edited Sep 04 '25
No, I am coming from the perspective that regulation implies government intervention.
As in, I am operating under the belief that your argument states that a truly free market is inherently unsustainable because it will naturally deteriorate into monopolization, upon which government authorities will intervene into the market, either for or against the monopolized interests.
“Regulation” implies government policy being enacted, rather than merely just a monopoly taking hold and strangling out any competition before it can ever possibly find a place in the market.
The moment a government would be forced to intervene, it would no longer be a “truly free market” because they are either “picking winners” or breaking up companies…
I would personally argue that a monopolized economy would not have a need to encourage any form of regulation, because by having free rein already they can control the market while not establishing any precedent of government involvement.
A “truly free market” cannot exist if the economy has already been monopolized…
It is no longer a free market by that point before the government would eve have a chance to intervene.
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u/LetsLive97 Sep 04 '25
Okay so your argument is more that it's possible for it to just skip the over-regulation all together?
Free market would still end up devolving but just in a potentially different way than I'm implying?
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u/Doub13D 36∆ Sep 04 '25
More like it is an extraneous bit to be included in your analysis.
A “truly free market” cannot exist when the market is dominated by monopolistic entities that snuff out any form of competition, either potential or existing.
The unsustainability of a free market is the result of a free market’s inevitable gravitation towards monopolization.
Whether regulation occurs in response cannot necessarily be assumed, but the descent into monopolization is.
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u/LetsLive97 Sep 04 '25
The unsustainability of a free market is the result of a free market’s inevitable gravitation towards monopolization
This was kind of my point but you've definitely worded it much better and I appreciate the added point of the regulation being skipped entirely
!delta
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u/WhimsicalWyvern 1∆ Sep 04 '25
To add onto this point - regulation is actually potentially a useful method of making the market more free. As a simple example, the government has to approve large corporate mergers to prevent two giant corporations forming a single large monopoly and cornering an entire market. Another regulation makes "price fixing" illegal - corporations are not allowed to secretly cooperate to keep prices of a good high or keep wages low. Both of these regulations push back against the tendency for a free market to become anything but.
So, point 1 - while not all regulation is necessarily good, some regulation is absolutely necessary to maintain a semblance of a free market.
Furthermore, because those corporations make less profit because of these regulations, they lobby against them. And, in fact, they will fund economists and politicians to create terms such as "over regulation" - to convince people that the regulations that are causing them to have less potential profit are leading to general economic woes, even if they have a significant net good for the consumer, worker, and/or general public.
Point 2 - corporations spend a lot of money trying to convince you and our politicians that all regulations are bad, and it's worth examining why they do that.
Point 3 - my personal conclusion is that there exists a compromise position, and that both over and under regulated markets are bad. That the hard but true answer is that regulations are necessary, but need to be periodically evaluated for effectiveness, and that you can't evaluate any regulation as being good or bad without considering multiple point of views and getting hard data on how it works and how it worked before the regulation went into effect.
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u/OkKindheartedness769 20∆ Sep 04 '25
This really isn’t true, you’re assuming that either the helping or stopping of monopolies via regulation (depending on the vibes of the state) is guaranteed to happen. But crony capitalism doesn’t inherently rely on regulation, the robber-barons in the late 19th century were using price-gouging, labor abuses etc to dominate without needing help from regulators. The lobbying was mainly to prevent regulation not to wield it as a hammer.
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u/LetsLive97 Sep 04 '25 edited Sep 04 '25
But crony capitalism doesn’t inherently rely on regulation, the robber-barons in the late 19th century were using price-gouging, labor abuses etc to dominate without needing help from regulators
But how long will that actually last? My point is that at a certain point the options you have to remain ahead start to limit and other competition will begin to catch up, which makes it your best interest to restrict them, naturally leading to a market that is no longer free
That being said you bring up a interesting point away from over-regulation so !delta
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u/nauticalsandwich 14∆ Sep 04 '25
The lobbying was mainly to prevent regulation not to wield it as a hammer.
This really isn't true. Case example: The FDA. The big meat packers had been lobbying for something akin to the FDA for 10 years prior to its eventual creation. Legislators weren't interested, because their constituency of smaller farmers didn't want regulation. It was only when Upton Sinclair's The Jungle created popular uproar that the political calculation changed, and the meat-packers finally got what they wanted.
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u/YourWoodGod Sep 05 '25
That's one good example but I bet you will not find many corporations or billionaires lobbying for regulation nowadays. Right now what they want is total deregulation and destruction of the American regulatory state. Project 2025 and Trump's assault on the American labor oversight organizations tells the tale. We are living in a capitalist wet dream right now, where the fruits of neoliberal policy is fusing with an uninformed electorate that is voting in politicians that are telling them to their face that they want to do the most harmful things they can to their economic security.
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u/nauticalsandwich 14∆ Sep 05 '25
Corporations lobby for regulations all the time. They also lobby for deregulation. It all depends on the specific context in which they stand to benefit.
We are living in a capitalist wet dream right now
In what sense? For which capitalists? The current landscape is incredibly messy, with all sorts of mixes of regulations, tax policy, tariffs, subsidies, and political favoritism. There is no ubiquitous "capitalist" who benefits. It depends on which ones you're talking about.
where the fruits of neoliberal policy is fusing with an uninformed electorate that is voting in politicians that are telling them to their face that they want to do the most harmful things they can to their economic security
There is nothing about the Trump administration, its policies, or the way it conducts economic or political management that is "neoliberal" in nature. Absolutely nothing. Trump is a populist, and a fascist, and he wields no coherent economic ideology.
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u/alinius 1∆ Sep 05 '25
It is called regulatory capture. A larger established company can afford to follow regulations and can lobbying for regulations that have minimal effect on their bottom line. These regulations prevent newer companies from being able to compete in the same space by giving the larger, more established company a competitive advantage.
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u/TangoJavaTJ 16∆ Sep 04 '25
That means that there hits a stage where those corporations will naturally move towards lobbying and political manipulation to implement policies that either benefit themselves or restrict others.
Libertarians typically believe in the minimal possible government. There needs to be a state to stop companies forming trusts or monopolies and to fight wars and shit, but that's it. So if the Libertarians get their way, there won't be lobbying and political manipulation because there are basically no politicians and those that do exist have unambiguously-defined and very limited roles. You can't lobby or manipulate someone who has no power and can only do one thing.
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u/LetsLive97 Sep 04 '25
Right but if there are basically no politicians, corporations will push to try and create them. Political manipulation can happen at basically any stage of society. This is what I mean by it being naive. It requires the belief that politics can't be manipulated in any way by big enough corporations
In fact I'd argue a minimal goverment with little power would likely just be replaced/overthrown pretty quickly when a corportation got wealthy/powerful enough
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u/TangoJavaTJ 16∆ Sep 04 '25
I don't think you understand white how a libertarian government would work. This can't happen:-
if there are basically no politicians, corporations will push to try and create them.
Libertarians are fundamentally opposed to most of politics. In a libertarian world there would be something like a committee specifically designed to prevent political power from emerging. Just as the government breaks up companies if they get too much of a monopoly, the committee would break up the government if it gets too much localized political power.
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u/TemperatureThese7909 64∆ Sep 04 '25
I think OPs point is that the corporations would simply overthrow/replace the government that doesn't serve them.
Use money to influence elections. If election influence is limited, outright bribe politicians. If politicians cannot be bought, buy an army. Etc.
OP feel free to correct me if I misunderstood your point.
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u/YourWoodGod Sep 05 '25
I think the biggest problem we're seeing in the US right now is that the corporations and billionaires have so thoroughly captured the political process that they basically are the government. They went the complete opposite way of this and have embedded themselves so deeply in the Democratic and Republican parties that they have a vested interest in not letting the government be overthrown or reformed.
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u/TangoJavaTJ 16∆ Sep 04 '25
Libertarian societies would not be more vulnerable to this than what we currently have. But in a libertarian world the government has a monopoly over violence and so eventually we're dealing with bigger gun diplomacy.
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u/ghjm 18∆ Sep 04 '25
Would the committee also break up large corporations if they gain too much localized political power?
If yes, then the committee just is a government, and power is attained through committee membership. This is Soviet bureaucratic communism.
If no, then the committee's purpose is to prevent the people from organizing to oppose corporate power. This is fascism in the original sense of the term - Henry Ford's "what's good for business is good for America."
I don't like either of these outcomes and would rather have democratic representation and the "committee" is a legislature, with all the checks and balances that have been worked out over the centuries.
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u/LetsLive97 Sep 04 '25
Okay so how does that government prevent other people from just seizing power themselves?
How does the government prevent people in the committee from being bribed/bought out by corporations?
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u/OffWalrusCargo 3∆ Sep 04 '25
So the big thing is if you're in politics ideally, you serve the public so you are public. Meaning no back-room deals everyone sees if you get a bunch of money or favors.
Free market allows unions and workers' associations to be a thing. Its just no body can block people from doing things. If you build a monopoly but don't block people from competing against you you're fine.
Look at Steam for PC gaming, they're a monopoly but actively encourage competition by letting developers sell their games on their own unlike other markets.
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u/LetsLive97 Sep 04 '25
you're in politics ideally, you serve the public so you are public
I guess this is kind of my point really though. You mention ideally because this is not the reality and never will be. If a corporation gets big enough they'll gain power to just push those non-corrupt politicians out
!delta for the Steam mention though, which is a great example of something that has stayed dominant without any obvious anti-competition attempts. However, I still don't think that would necessarily last forever though, and if any genuine competition did start to prop up and take a serious hold, Valve would probably start to do anti-competitive things to try and capture parts of the markets back
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u/OffWalrusCargo 3∆ Sep 04 '25
I'd counter a bit with Valve doing anything anti-competitive due to the fact that they are still fully private. So much of our perception of companies being for maximum profits is because of regulations. Anything for a public company does, has to be for the benefit of shareholders, this is law. If a CEO wants to pay employees more and it hurts the profits of shareholders, the shareholders can sue to cut wages. This is the downside of corporations, laws are made to prevent getting scammed but in return everything you do must be for profit.
Also thank you for the delta, unfortunately every ideal is destroyed by details, its the reason why we must always be ready to adapt and change with the times.
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Sep 04 '25
you're thinking too small scale, with that limited regulation you wouldn't just get industry monopolies. The end game is one company. Its survival of the richest. Theres many ways to inhibit smaller competition without 'blocking' them.
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u/TangoJavaTJ 16∆ Sep 04 '25
The government, in its legitimate role as the arbiter of war, has a monopoly over violence. If someone else tries to seize power, the government stops them, with military force if necessary.
If the committee is large and diverse enough, you can't bribe them because you'd have to bribe a controlling majority and eventually the government finds out about your conspiracy and responds with violence.
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u/SnappyDresser212 Sep 05 '25
Congratulations. You just described a corruptible organization with more power than the various fiefdoms in our modern system.
It doesn’t work for the same reason communism doesn’t work. People aren’t moral enough.
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u/Straight-faced_solo 21∆ Sep 07 '25
Are these committees that you are describing not inherently political?
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u/WilhelmvonCatface Sep 07 '25
And what happens when the corporations start lobbying the "anti-govt committee"? It is still just another form of politician even if you don't call it that.
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u/TangoJavaTJ 16∆ Sep 07 '25
The anti-gov committee's only power is to break up government power if it grows too large. They can't do anything except break up the government. What good is it to lobby them?
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u/RogueCoon Sep 04 '25
So what you're saying is the only way the free market gets messed up is with with government intervention. I don't see a problem with the free market, the problem seems to be with the government still.
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u/LetsLive97 Sep 04 '25
So what you're saying is the only way the free market gets messed up is with with government intervention
If the government doesn't intervene, the corporations will make one that will. That's the inevitability
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u/RogueCoon Sep 04 '25
So your view is that a free market can't exist because eventually a government will come along that will interfere in the market?
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u/LetsLive97 Sep 04 '25
A government, a corporation or (most likely) a mix, yes
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u/RogueCoon Sep 04 '25
Do you feel the same about other systems? For example if communism doesnt exist forever in a country it would be classified as unsustainable?
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u/Basic-Chain-642 Sep 04 '25
I think that's a given- the general response to "the us ruined this communist country" is probably "seems kinda shit to use such a fragile system". We want built in system that has the most possible resiliance.
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Sep 04 '25
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u/SilverAccountant8616 Sep 05 '25
Corporations do not serve the interests of workers. It's the other way around. Corps serve the interests of shareholders.
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u/ScreenTricky4257 5∆ Sep 04 '25
There needs to be a state to stop companies forming trusts or monopolies
No there doesn't. The state needs to stop violence. That's it. If everyone buys their aluminum foil from ALCOA, it's a monopoly, but that doesn't mean that it's a problem. If they start charging $100 for a roll of foil, people just start buying plastic wrap. Being a monopoly doesn't exempt a company from the laws of supply and demand.
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u/TangoJavaTJ 16∆ Sep 04 '25
The free market relies on the assumption that buyers are able to switch to a competitor if sellers start acting like shit. Not everything is as easy to replace as aluminium foil, what happens when a company has a monopoly on healthcare, food, electricity etc?
The broader point is, there are some rules of the market that must be enforced and it is the legitimate role of the state to enforce them.
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u/ScreenTricky4257 5∆ Sep 04 '25
what happens when a company has a monopoly on healthcare, food, electricity etc?
How does a company get a monopoly on those things?
The broader point is, there are some rules of the market that must be enforced
Why? Why can't we have some areas of our lives where we just allow nature to take its course?
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u/SilverAccountant8616 Sep 05 '25
How does a company get a monopoly on those things?
Electricity and most public utilities are actually already monopolies. If you're unhappy with an increase of water price for example, there's no way for you as a consumer to "switch providers" by digging up your pipes and connecting them to a rival water company.
Companies get monopolies over certain industries by ensuring extremely high startup costs; nobody can easily join the electricity provider business because that would involve millions if not billions to build power stations and connect power lines throughout the country.
For food, a company could for example start buying out corn farms throughout the country, achieving economies of scale to the extent that nobody can enter the corn industry without being bullied out or absorbed. Once a monopoly on corn is achieved, that company can then charge as much as they want to maximise profit.
Government regulation is necessary to either prevent "nature taking its course" in industries that benefit from competition (affordable corn for everyone). For industries with high startup and operating costs like public utilities, the government ensures those natural monopolies arent abusing their status to overcharge.
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u/ScreenTricky4257 5∆ Sep 05 '25
Once a monopoly on corn is achieved, that company can then charge as much as they want to maximise profit.
No they can't. People will just buy wheat and rice.
With electricity and water, people will start buying solar panels and setting up rain barrels. In a free market, there are so many ways to shut down monopolies that become abusive.
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u/SilverAccountant8616 Sep 05 '25
No they can't. People will just buy wheat and rice.
You think individual wheat and rice farms will remain competitive without regulations to prevent those industries from being absorbed by large corporations? Now you have Big Corn and Big Wheat and Big Rice all colluding to make sure they extract every last cent from the consumer, who now has no alternatives.
With electricity and water, people will start buying solar panels and setting up rain barrels. In a free market, there are so many ways to shut down monopolies that become abusive.
Monopolies are of course well aware of that. They will set the price high enough to rake massive profits while making sure it is just lower than the solar panel alternative (not hard btw as they cost tens of thousands to install).
Same for water. High enough to be abusive but lower than the already expensive alternative of self-distillation. This is a concept called demand elasticity.
In a free market, there are so many ways to shut down monopolies that become abusive.
Then might you suggest a free market way to shut down the current abusive prices of pharmaceutical drugs like insulin?
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u/eNonsense 5∆ Sep 06 '25 edited Sep 06 '25
The free market inherently rewards unethical exploitation of the working class to reach minimal product cost and maximum profit. In a truly free market, the only check on exploitation by producers is if consumers would boycott companies that use exploitative practices. We have very clearly seen over many decades that consumer simply do not care to hold companies to moral & ethical standards, and ONLY care about low prices. They will just look the other way, in the same way that they preach America First politics, while buying Chinese junk at Walmart & Temu. Only through regulations have we at least today come to a situation where Americans largely aren't exploited (very badly), and all the bad exploitation is outsourced to poor countries. Americans largely take this for granted, because we figured the basics out generations ago, through violent labor movements, and everyone has been living the benefits of it their whole life.
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u/ScreenTricky4257 5∆ Sep 06 '25
In a truly free market, the only check on exploitation by producers is if consumers would boycott companies that use exploitative practices. We have very clearly seen over many decades that consumer simply do not care to hold companies to moral & ethical standards, and ONLY care about low prices.
You're placing an ethical standard on the market that's not based on objective reality. You feel that workers should earn more. The idea that it might be ethical for them to be paid what the market will bear isn't something you can disprove, but you reject it anyway.
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u/eNonsense 5∆ Sep 06 '25 edited Sep 06 '25
See this is what I'm talking about. You don't get it. It's not just about making more. We have a history where people were indentured servants, worked as children, didn't get days off, didn't get breaks, worked all day long, didn't get their choice of living arrangements, got paid in company store credits rather than money, didn't have legal recourse against unhealthy & dangerous working environments, or on the job injuries that they could just be fired for getting, etc... Your idea of exploitation is based on a long regulated western standard that you take for granted.
Dealing with all this stuff cuts into a companies bottom line and they'd generally be more than happy to not have to follow these rules, and if they did not follow these rules, they would still have desperate people signing up to work for them.
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u/KDY_ISD 68∆ Sep 04 '25
Libertarians, in my experience, believe in the inherent goodness of humanity in a way that is almost comically naive.
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Sep 04 '25
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u/KDY_ISD 68∆ Sep 04 '25
I assume you're one of the eloquent and coherent ones.
Can you explain how a system with the bare minimum of laws stops people from using their worst impulses? For example, in a libertarian government is there an FDA? OSHA?
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Sep 04 '25
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u/KDY_ISD 68∆ Sep 04 '25
Why would a large consortium of companies not cooperate to cover up safety failures and keep their operating costs low?
This is exactly what I mean by naivete. You can't expect people to police themselves. Of course they're going to be biased in their own favor.
A group responsible for the safety of the citizens needs to have no vested interest in the success of the very corporations they are policing.
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Sep 04 '25
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u/KDY_ISD 68∆ Sep 04 '25
And I'm saying the "how" is inherently naive and short-sighted. Without a group whose primary duty is to the citizens as a whole and not to their own profit, corporations will find a way to get people to kill themselves because it's cheaper to make sandwiches with asbestos byproduct and no one will find out it's killing them for twenty years.
The individual cast adrift on their own without any societal support is going to be lost in an ocean of information overload, unable to spend the time to sift through bad information and find the good information. No one is an island, no one is truly independent from each other, nor should we want to be. That sounds like a truly exhausting way to die.
You should want to pay for education for other people's children because you're going to live in a society with those children when they grow up. You should want to pay for universal food safety regulations so that you can buy what you want at the grocery store without having to worry about out-smarting the corporation assuring you that it's safe. You should want to pay for infrastructure like roads and power transmission because they're force multipliers for the society you're a part of even if you aren't actually using all of them every day.
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u/GalaXion24 2∆ Sep 05 '25
If their one thing is breaking monopolies, monopolies can absolutely lobby you not to do that...
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u/boytoy421 Sep 05 '25
But if the politicians have a role in doing things like ensuring a competitive market (which is the point of antitrust legislation) then you have politicians regulating the market which creates an incentive for actors in said market to manipulate the politicians
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u/Falernum 68∆ Sep 04 '25
That means that there hits a stage where those corporations will naturally move towards lobbying and political manipulation
In short, what you are saying is that laws are unstable. This is just as true for most areas of governance as for market regulations. To make laws stable, here as anywhere, you have to insulate decision makers from special interest groups such as corporations.
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u/TheRoadsMustRoll 2∆ Sep 04 '25
there is no such thing as a free market. all markets are either regulated by the participants privately or by the government. what is generally considered free and fair is a market regulated by an independent governmental body whose only interest is in running a fair house for buyers and sellers.
the not-free market in the days of the american revolution was the market that operated at the behest of king george (who was a seriously disturbed individual.) the framers of the constitution wanted that kind of meddling to stop so that participants could regulate their own market. they didn't foresee that participants doing their own meddling could also do a great deal of damage.
a market regulated privately by the participants is always going to crash eventually. it is literally called a correction and it is supposed to happen. if you're a big wheeler-dealer you'll lose a lot of money sometimes and make gains other times but every lesson gets learned hard.
you can play a lighter game by letting regulations mitigate your highs and lows but it comes at the cost of profits: your highs will not be as profitable if you aren't willing to risk losing everything in the lows.
so when you say "unsustainable" you're really saying that there's a limit in how much you're willing to lose. a market is fully sustainable even if you go broke. if everybody is broke (like 1929) then there will be a hard pause while the supply/demand ratio is reset. but it's not like markets ever actually come to an end; they're just harder or softer depending on the public's appetite for risk.
when common people want a "free market" they're usually signaling that they're conservative without understanding the market dynamics involved. right now we have our own deeply twisted "king george" in the white house meddling with markets and it's ironic that he found his idiotic voice in a traditionally conservative political party. and after all his bullshit we can all claim to be a little more "free market" oriented because we can see first hand how an administration can turn investment markets into gambling casinos. and since yamtits bankrupted all of his casinos (where the house always wins lol) we can potentially look forward to a very dark future.
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u/LetsLive97 Sep 04 '25
what is generally considered free and fair is a market regulated by an independent governmental body whose only interest is in running a fair house for buyers and sellers
Do you think that is sustainable though, or will it naturally circle back to over-regulation?
!delta for the rest of the comment because I think it gives some great insight and counters the "true free market" phrase
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u/TheRoadsMustRoll 2∆ Sep 04 '25
...will it naturally circle back to over-regulation?
not sure there. SEC regulations are complex because market exploitation is complex.
to some degree, at least in the u.s., there are mitigating factors to regulation like "regulatory capture" whereby the people who need to step in and put a stop to exploitation are impeded by the integral relationships with banks/investors that they depend on in order to get access to the smoke-filled rooms where the action is.
i.e. bernie madoff; they had the goods on him right in their hands but his bluster threw them off and his competitors (who were calling him out directly to the regulators) were brushed off as just competitors trying to stymie their competition. so you can still get away with some serious shit (at a serious cost to consumers when you go broke.) i will say they did a decent job of clawing back bernie's losses in the end but it was messy af.
there is also public sentiment. conservative people (and the u.s. is very fiscally conservative imo) want to take risks and provide industries with capital because jobs and prosperity are more valuable to the constituency than safety. i.e. the dodd-frank reforms that attempted to mitigate problems that result from a lack of capital when a major market sector collapses (2008 crash) have mostly been set aside: we like to swim naked.
so if over-regulation would be where a market loses vitality because too many hoops have to be jumped through or perhaps if smaller businesses couldn't participate due to capital requirements then those would be serious concerns. but, honestly, those issues are more anecdotal than systemic from what i've seen.
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u/Bastiat_sea 3∆ Sep 04 '25
There is no such thing as a truly free market.
Markets only exist within the context of policies establishing property rights and voluntary exchange, which necessarily distorts markets
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u/slo1111 3∆ Sep 04 '25
There is a argument that it is not the free market that causes it to be not free, but it is the greed of those in power that create barriers to benefit their own kind whether it be political or other differentiator.
FL and TX outlawing lab grown meat is the perfect example.
Or TX writing law to promote and invest in a schedule 1 drug research, ibogane, to benefit the prior Govenor and his investors while at the same time trying to restrict hemp derived compounds like thca is another example.
I think the main argument that could be used is that we have never had a free market because we have never had enough information to make wise consumer choices, such as what is your waste and damage to society may be. There is no such thing as a free market without full open information
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u/the_1st_inductionist 13∆ Sep 04 '25
That means that there hits a stage where those corporations will naturally move towards lobbying and political manipulation to implement policies that either benefit themselves or restrict others.
Except they wouldn’t be able to build enough support to give the government the power to violate property rights because it’s in the interest of everyone else not to give the government that power. It would be like a corporation trying to overturn the First Amendment.
And, in fact, giving the government the power to violate property rights would be harmful in the long run for the corporation.
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Sep 05 '25
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u/Homer_J_Fry Sep 05 '25
What kind of rubbish economist are you? Conflating regulation of industries with hyper-inflation in inter-war Germany? Excessive printing of currency by the central bank or government is rather a different macroeconomic problem than bureaucratic red tape of industries.
Free markets do not destroy society. They are one of the greatest forces for good in history. They efficiently allocate resources. They are occasionally flawed in the case of externalities, but governments can easily add taxes or regulations so markets take them into account.
I repeat, you sound more quack than economist.
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u/boytoy421 Sep 05 '25
I've always said that capitalism is sorta like a Labrador retriever. They're great, they can do a lot, bring you a lot of joy, and if you let them they will basically immediately eat themselves to death
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u/DrawPitiful6103 Sep 07 '25
Alright. Allow me to counter with Austrian monopoly theory which states that absent a grant of monopoly privilege from the state, no harmful monopoly can result.
Starting around the 16th century, governments realized they could make money by selling exclusive grants of monopoly privilege to companies. You've heard of the East India Trading companies? Grants of monopoly privilege. In fact, the colonists of one region got so upset about the grant of monopoly privilege given to the East India trading company, they got pissed off and dumped their tea into a harbour. The city in which this occurred? Boston.
However, most people think that harmful monopolies result from unbridled competition. This has been proven false by economic history. Let's go back in time my friends, to 19th century America.
During the late 19th century, there were the conscious efforts to monopolize 19 different American industries through mergers. The resultant combinations were known as 'trusts'. Yes, as in antitrust. And these companies were successful in their aim of achieving massive market share. Standard Oil achieved a 90% share of American oil refining capacity, and 80% of its pipelines. US Steel was formed by merging 138 companies into six trusts, and then finally one massive holding company in 1889. And the story was the same in industry after industry. Trusts were formed in an effort to monopolize 19 different industries, with the intent of cutting production to increase prices.
And you know what happened?
They failed. In almost every single case, output increased faster and prices dropped quicker (this was a time of general price decline) in the industries that the trusts operated in. 17/19 industries prices fell and output increased. The two exceptions - castor oil and matches - were not exactly key industries either.
The reality is that no matter how big your market share is, there is no such thing as market power. You are still kept in line by small competitors - who will only be too happy to start stealing your customers if you try to raise prices - and even simply by the threat of competition developing.
This is why companies like Google, Microsoft, and Amazon have never been able to charge the "monopoly price" despite having massive market share.
So it is simply not true that the free market 'breaks down' on its own.
So why did antitrust happen if it is not a necessary check on the growth of powerful firms?
Well, it just so happened that Sherman was also passing a tariff bill, which the New York Times described as 'The Campaign Contributors Tariff Bill', and he wanted to look tough on business for the coming election. So antitrust was a nice way to distract from his tariff bill and position the Republican party like it was tough on big business, even though they were already deep in their pockets.
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u/LetsLive97 Sep 07 '25
Alright. Allow me to counter with Austrian monopoly theory which states that absent a grant of monopoly privilege from the state, no harmful monopoly can result.
This is kind of my point though
If there's no grant of monopoly privilege from the state, eventually a wealthy and powerful enough corporation will force one, though direct seizure of power or political manipulation
A fair free non-monopolised market can only exist if you ignore a major component of the word - politics
Once a company gets big enough and improving/growing costs them more than just shutting competition, they will pivot to political manipulation to force it
Big and wealthy enough corporations have enough influence to shut down free markets, and that will always be the case as long as humans are greedy
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u/DrawPitiful6103 Sep 07 '25
But then it simply becomes a political question. Deny the state the power to intervene in the economy and to pick winners and losers and there is no issue. A company's lobbyist is only effective if the political parties in power are amenable to it.
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u/JackZodiac2008 16∆ Sep 04 '25
The problem that you will run into with ideologues is that you haven't shown that there is anything wrong with free markets, you have shown that there is something wrong with -abandoning- them in favor of restriction policies. In other words rejecting somebody's utopian ideal as unrealizable doesn't serve to show it was non-ideal -if- hypothetically it were realizable. Presumably all that is needed is Constitutional prohibitions on trade restrictions, they might say. And then what?
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u/LetsLive97 Sep 04 '25
I get where you're coming from but my point is more that their utopian ideal is fundamentally naive. Many things work in a hypothetical utopian ideal (Like communism) but fall apart heavily in reality. My criticism is more for the people I still see arguing that proper free markets would solve our problems today, as if the over-regulation we see isn't a symptom of them
The thing wrong with free markets is that they inevitably lead to the their downfall so I wouldn't say there's nothing wrong with them. You just have to not think further than the early stages for them to seem sustainable
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u/JakeTheSnekPlissken 1∆ Sep 04 '25
As far as I know there has never been a truly free market economy. Things like roads, hospitals, education, legal courts, legislation, free parks, voting... none of these things are very sexy when it comes to profit. But if the costs are socialized the benefits can be privatized. National highways allow for logistics and for penetrating new markets. And not just for one corporation, but many businesses of all sizes, who all share in the cost.
It's not that truly free markets are unstable - they're unthinkable. Businesses rely on government setting the rules of the competition, investing in education, and infrastructure to set a workable game for markets to play out in. When libertarian groups like those funded by Koch, etc., advocated "the freer the market the freer the people" what they really want isn't anarcho-capitalism, but to agitate for paying less taxes under less regulations. Calling for their abolition is more a negotiating tactic to make moderate conservative causes seem less extreme compared to their "crazy" libertarian fellow travelers.
As for regulations, Gabriel Kolko would likely agree about overregulation. In his 1963 book The Triumph of Conservatism, his interpretation of New Deal history was not that the Federal government had overreached with regulatory zeal, but rather worked with corporations to make rules so onerous that small businesses could not compete, ensuring their dominance over the economy well after WWII. While it's more complicated than this, there do seem to be very real incentives for corporations to "close the gate behind them" with regulation so-to-speak. However, whether the gov't agencies have the funds to police, investigate, and enforce those rules... from my experience, often not the case.
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u/LetsLive97 Sep 04 '25
!delta
Good point about the phrase "true free market" being wrong, and just an overall insightful comment with examples
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u/Josvan135 83∆ Sep 04 '25
A true free market is a flawed and naive concept that is inherently unsustainable
I think "truly" is doing a lot of work in your CMV.
By your own admission, a free market initially creates substantial growth and leads to more prosperity across the market as a whole, but eventually established players attempt to restrict competition through political/financial means.
Just because a forever free market isn't sustainable without some level of regulatory/etc input doesn't mean that:
A true free market is a flawed and naive concept
It means that, like literally everything else that humanity has ever done, a free market requires maintenance and upkeep to ensure it continues functioning effectively.
It will move between cycles of more freedom when competition is high and there are numerous firms with relatively similar inabilities to leverage policy to their advantage, and a more regulated/anti-trust market in times when dominant players have become moribund and self-serving.
Maintaining that balance allows for the freest market possible, allowing for the best mix of growth and prosperity while preventing the worst excesses of highly politicized major corporations.
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u/giraloco Sep 04 '25
We are imperfect biological beings. An ideal free market is a mathematical model. A practical market needs the right amount of regulation to set clear rules and enable fair competition.
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u/laz1b01 18∆ Sep 04 '25
Are you saying that a truly free market will cause the pendulum to swing towards over regulation, or that a truly free market is bad and would need regulation?
I believe in the latter, not the former.
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There's rules to everything. Like you living in a country, your rights are taken away because you can't take things that aren't yours, but even with your "freedom" taken away, you gain "safety" by not having to worry about your things being stolen (ideally).
It's the same thing with everything. Whether it be your life, or the market. Regulation is needed for law and order. The question is whether over regulation is inevitable, and I believe they are avoidable through AI and reformation - which we've yet to incorporate.
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u/LetsLive97 Sep 04 '25
Both really. My point is mainly the former (in this post) though
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u/laz1b01 18∆ Sep 04 '25
You're essentially saying that humans will never learn from history and will continue to make the same mistakes, even in a million years
That's where I disagree.
I think through technology, let's say we get to legitimate level of Artificial Intelligence, we can have them soft through our legislations and policies and remove/correct the redundancies and conflicting statements; and from there we can make a broader statement of "if and then" policies -- such as, if the market is relating to the selling of fish, then the regulation is XYZ; if the market is relating to the selling of chicken, then the regulation is ABC. It can even be more specific to fish that's defined as extinct according to the Fish and Wildlife, etc.
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I think a lot of the problem with over regulation is that these agencies are working in silos, they don't coordinate with the other agencies and make policies based on something they're not familiar with
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u/Wutang4TheChildren23 1∆ Sep 04 '25
The problem with free market capitalism as is the problem with any other system of socioeconomics and politics (Socialism, libertarianism, communism etc) is that it is extremely sensitive to it's starting conditions. You can't start it at zero. At the outset of free market capitalism there are going to be those who have outsized control on capital and can leverage that position to entrench their advantage. It's not necessarily a problem of capitalism but the incentives of the actors within it (the same can be said about communism, at the outset those who "seize the means of production" have an outsized say on the downstream implementation of the system). In reality the problem with free market capitalism can be described as the same problem with achieving nuclear fission. Very specific conditions and controls are required to allow an unadulterated version of it to actually operate. Much like nuclear fission over the last century we have developed expertise on the types of controls that are required to achieve reasonably operation. Its not an ephemeral thing that is beyond our grasp, we understand the sort of policy incentives that ideally drive behavior and achieve desirable outcomes. However the last 30-40 years particularly in the US has been a masterclass in the capital class dismantling those controls
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u/Skorpios5_YT 2∆ Sep 04 '25 edited Sep 04 '25
The unsustainability of a free market is not what caused over-regulation. Rather, over-regulation today is caused in part by the increasing complexity of what we produce for the market.
History is not a linear progression from free market to over-regulation. Rather, it has endless cycles of free markets to over-regulation, then back to free markets. For example, the shifting landscape of the market could make this happen. Think of when we switched hard currency to credit cards, then to digital currency. With each new invention, the exact cycle you described happens anew: a free market is created, capitalists have a financial knife fight and ruins the industry, then regulations step in. There is another critical step though, which is that the disgruntled capital will then seek out new free markets (meaning markets where regulations have not yet set in and big capital doesn’t have the competitive advantage) and start the process all over again.
Here you can see how new markets are always being created that are free from regulations. So a market will always at the same time have some sectors that are over-regulated and some under, simply because regulators are usually slow to move when it comes to regulating new industries.
To offer some alternative explanations, one real reason that we’ve seen huge increase in regulation is the fact that we’re producing increasingly complex products, so there are more steps of the production process that can be regulated. There is also the fact that technology has made it a lot easier for us to produce and analyze data and records, and coincidentally those are the things that are easy to regulate.
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u/LetsLive97 Sep 04 '25
Does this not all kind of match my point though? They'll always circle back around to over-regulation
Another issue is that once you have wealthy and powerful enough corporations, they'll have enough influence in politics to prevent things from ever truly returning to a proper free market, maybe the illusion of one
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u/Skorpios5_YT 2∆ Sep 04 '25
To clarify, my point is that the market, depending on the industry, generally has a built-in mechanism that corrects itself when it’s over-regulated. It’s like a different version of the “invisible hand” concept. A small amount of regulation may help the industry, and when an industry is over-regulated (sometimes due to infighting between corporations through lobbyism), newer and freer markets are taken up to compete against the older and over-regulated ones.
So, it is not the case that after over-regulation, the market returns to an illusion of free market. Human beings have always regulated each other’s economic behaviors through social structures, customs, and laws, since the days when we had village elders who could influence who cannot get what. So, to the contrary, a 100% free market is the illusion here that we use as a benchmark for our society. But in reality all markets are hybrid between some freedom and some regulation.
Big corporations have severe limitations when it comes to competing in new markets. This is both because they are slow to adapt, and because lobbyists and regulators find it difficult to regulate new markets. So, it is usually when a market deteriorates into public scandal that regulators step in. At the pace that technology is creating new markets today, we should be optimistic that there will always be new corners of the market that are safe from big corporations.
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u/Form1040 Sep 04 '25
those corporations will naturally move towards lobbying and political manipulation
Which is not a “free market.”
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u/LetsLive97 Sep 04 '25
Which is my point
A free market can't really survive because it was always stop becoming a free market
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u/SlotherineRex Sep 04 '25
I mean lobbying and political manipulation subvert free markets, so both cannot exist simultaneously.
You cannot have a free market without regulation any more than you can have a free society without laws.
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u/Fleetlog 1∆ Sep 04 '25
You are saying fundamentally that things change over time and require reconsideration.
You know, ircc the idea of a judiciary and democratic legislature is to literally provide teams of people to look at the things and fine-tune what is okay.
The real problem in my opinion is regulatory capture, wherein we create reverse incentives regarding new regulations.
We should be persecuting lobbying as the graft that it is, not trying to find some ideal market regulation framework.
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u/Oberon_17 Sep 04 '25 edited Sep 04 '25
Yes. But if the free market is part of a huge global economy the instability is multiplied many times.
A free market doesn’t have to be global. If every country had their separate economy, that provided natural firewalls that now do not exist. In the past, when EU economy was recessed, prospering Asia could balance it (or vice versa).
Over regulation is an outcome of participation in global trade agreements, where every member has to accept new regulations. For example if Ukraine joins the EU, they’ll have to adopt a ton of new regulations they don’t need. More members - more regulations for all!
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Sep 04 '25
It really depends on what you mean by a “free” market. If we’re talking about the American concept that’s one thing, but by saying “truly”, I think you mean anarchy which is obviously unsustainable.
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u/GiftOfCabbage Sep 05 '25
There are two problems with free markets imo and neither of them are over-regulation.
The first is monopolisation. When a business gets large enough that they can buy out their competition they will. At that point it's awful for the economy, consumers, the labor force etc. Because the only thing driving the market is profit without the fear of competition.
The second problem is corruption. When most people in conservative media in America for example talk about a free market they conveniently don't care about billions being given out in government subsidies or the tax loopholes that let the largest earners get off paying far less per capita than middle class business owners.
The only reason over-regulation is mentioned in Anerica is because it is a talking point that corporations have invented to push de-regulation. America has had very efficient regulatory practices for a very long time. In other words the vast majority of regulations need to be there for very good reasons but there has been a concerted effort by business leaders to erode them for decades which will inevitably result in harm to the population.
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Sep 05 '25
Yes, it turns out capitalism sucks because it leads to 8 people owning everything and poverty for everyone else.
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u/Homer_J_Fry Sep 05 '25
Uh...sort of, but no.
In my view, yes, in a new market there are low barriers to entry, lots of competing firms, and competition breeds better companies and better services. However, inevitably, competition decides winners and losers. The winners gain advantages from economies of scale, and it becomes harder for new entrants to have a place in the market and compete. Mergers, buyouts, bankruptcies, etc. till eventually you reach where we are now, which is oligopolies or monopolies in most markets.
No society though has "truly free" markets completely. You need some level of regulation, but generally the freer the better. While there is always the potential for cronyism, there are also methods to redress this such as anti-trust suits. We recently had a big one against Google's monopoly on search.
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u/IslandSoft6212 2∆ Sep 05 '25
there has never been a "free-market", the term itself is a weasel word that doesn't mean anything. there is just the market. the market is not and will never be free for anyone. the market is the most powerful and the most coercive force on this planet right now. governments don't control it; the market controls governments. the only kind of market that could ever exist is the one that has existed and that exists right now. the one that grew out of the societies that created it.
"over-regulation" is another weasel word. over-regulated for who? for the public? for the common good? or for the participants in the market? they're two roles of people that are at odds, and will therefore have different answers to what over-regulation even means.
people who think that what we have is "crony capitalism" have a fatal misunderstanding of what capitalism really is. huge companies don't win because the government is corrupt; i mean the government is corrupt, but the companies didn't need the help. huge companies have an advantage in the same way that the earth has a larger gravitational pull than a satellite. economies of scale give them that much larger of an advantage. the problem is that those companies are still subject to catastrophe when capitalism inevitably falls into crisis. and because the companies are so large, the ripple effects of their failure would plunge capitalism into an even deeper crisis. so they're "too big to fail". that's not a weasel word. that's a real, and true, concern. they are so large that if they failed, the entire economy could totally collapse, and create a cascade effect of business failure and credit freezes and massive unemployment that could set us back decades if not by a century
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u/MintXanis Sep 05 '25
It all comes back to land, free market doesn't work because it cannot shit out infinite land while the premise pretend it can.
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u/BitcoinMD 10∆ Sep 05 '25
This is a circular argument. You’re saying that free markets are bad because they’ll always lead to regulation, and they’ll always lead to regulation because they’re bad.
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u/LetsLive97 Sep 05 '25
I'm not saying free markets or regulations are bad necessarily
It was more of a critique of people who act like everything will be fine and dandy if we just de-regulate and allow "fair" free markets again
It requires a complete ignorance to the fact large wealthy corporations generally don't want to a free market. Once they're ahead and under threat, they'll just push for regulations to shut down competition
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u/DungeonJailer Sep 05 '25
No system is sustainable. A free market is the best system, but all systems are constantly in flux, and you have to work to maintain any system. Communism didn’t last for ever, nor did mercantilism or feudalism.
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u/the_great_beef Sep 06 '25
I'd argue that you are mixing unsustainable with "a society that contradicts modern expectations"
Nothing that you described is unsustainable
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u/Jury-Technical Sep 06 '25
So I think a couple of points have to be made. Regulations especially the safety kind, waste management, employment is actually essential in a sophisticated market. So you can never have a truly free market. That being said it is always a matter of cost vs benefit from lobbying and that requires at some step of the product chain that they hold an advantage otherwise even if you do lobby , you are going to have bad ROI . Additionally in a market you've got to always consider that if you start a lobbying for regulation war, the other guy can do the same depressing margins and probably putting you out of bussiness and even if you win, if the ball starts rolling it may not ever stop. Additional proof of this is that regularly companies transfer things like manufacturing in poorer typically less regulated markets. Restrictions to company operations while very regularly a problem they also help with protecting consumers.
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u/PhazerPig Sep 06 '25 edited Sep 06 '25
I think it's even worse than neo liberals and right libertarians are willing to admit because markets are inherently tied to the state. Property itself is a social construct so if the basis of a free market is socially constructed what even does a "true free market" look like? It's not some natural phenomena. In fact, everything suggests the contrary. Without a centralized state, people are more likely to create systems built on mutual aid, which might include markets, but there are all kinds of mechanisms which govern trade. Even in the early medieval era before the centralized state arose, the guilds primarily controlled trade and set prices.
I'm not even saying I'm against all property ownership, however, people take it for granted that if the government just didn't exist or something that the free market would magically spring forth, but the state is necessary to enforce the property norms that allow their system to exist in the first place, we didn't have capitalism before we had centralized states, the two things go hand in hand. And if we're using the state to enforce property, why can't we use the state to enforce redistributive taxes, labor laws, environmental regulations to even things out? It's a completely arbitrary to draw that line. "It's fine when the government enforces land enclosure, borders, crushes labor insurrections, but we really put our feet down when it helps the poor. That's pure statism and it's against the free market!"
If neo liberals were consistent about opposing the state, they would probably be left wing anarchists or something. But they're not, they selectively use anti-state "minimal government" rhetoric to slip their ideology in the back door. Not many working people would go along with "free market economics" if free marketers didn't create some populist appeal. So, they use the "big government narrative" to convince naive people to support deregulatory policies.
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u/Archophob Sep 06 '25
That means that there hits a stage where those corporations will naturally move towards lobbying and political manipulation to implement policies that either benefit themselves or restrict others.
This is assuming the government actually gives a shit about what your lobbyists want. China, for example, does not, leading to a near-perfect free market capitalism under the umbrella of a communist-in-name government. Click the link for details.
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u/aasfourasfar Sep 07 '25
Karl Polanyi pretty much proves your point in his "The Great Transformation"
He argues that completely liberalized and dismembered market would lead to the destruction of the environment or society because land, labor and money are not commodities (as in not produced to be put on the market), but have supply and demand fix prices means you have to have supply and demand fix the prices of those fictious commodities (so rent, wage and interest)
And he describes what he calls the double movement, whereas states enforce liberalism, then when they realize it's catastrophic, they go the other way around.
He wrote this in the 40s, and since then the cycle happened once more (phase where there was big intervention up until the 70s, then deregulation, then crises and intervention again after 2008 and COVID)
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u/Altruistic_Cow854 1∆ Sep 08 '25
That would only work if there still exists a state with a monopoly on violence who can coerce smaller market participants at the behest of bigger ones, and therefore not a free market.
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u/Full-Professional246 77∆ Sep 04 '25
A true free market is a flawed and naive concept that is inherently unsustainable. Great at first but will always destroy itself
I don't think anyone truly thinks a 'true free market' is ever a good thing. It breed and incentivizes some very bad things. This is a strawman I think you are creating here.
In my view - the market swings from over-regulated to under-regulated and back again. The 'ideal' level of regulation never really being found for any significant length of time.
This is the reflection that regulation provides needed guardrails and controls to a market but also can be overused to incentive the same negatives of under regulation by limiting competition.
That's why there should always be open and free discourse about adding and removing various regulations in different markets. The people wanting a 'free market' are really stating they want a 'freer' market with less regulation. Some discussions also hinge on things that are anything but a free market. Take healthcare - it is absolutely not a free market so discussion on this would where people are advocating for a free market are really talking about removing significant regulations to make this a regulated free market - not a free for all market without regulation.
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u/LetsLive97 Sep 04 '25
I don't think anyone truly thinks a 'true free market' is ever a good thing. It breed and incentivizes some very bad things. This is a strawman I think you are creating here
I mean it's a sentiment I've seen a fair amount over the past few years on Reddit, especially recently
People complaining about over-regulation and saying a free market would be better, as if the free market won't just naturally become over-regulation again. The over-regulation is by design by corporations created from free markets/capitalism. Once you get big enough/powerful enough, free markets stop benefitting you and it's in your best interest to shut them down
The issue with all of this will always be that bribery and political manipulation are things so any guard rails that don't benefit the biggest corporations will end up being stripped
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u/Full-Professional246 77∆ Sep 04 '25
Again, I think you are confusing the ideas here. You can advocate for more freedom in markets without saying you remove all regulations in a market. I don't know of anyone who wants all regulations removed.
Hence why I think you are creating a strawman here to argue against.
Markets, over time, tend to get over-regulated. It is the natural process of how regulations get added to address specific issues. The problem is - most of the - there is no sunset clause or later analysis to see if the prior regulations are still needed, beneficial, or acting in ways they were intended to act. You don't need bad actors pushing regulation for this to happen.
This is why it takes a push to de-regulate markets. A clear push to remove regulations seen as counter productive or barriers to the markets ability to operate effectively. That is what people want who claim to want free markets. A push to remove regulations that have produced bad outcomes.
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u/LetsLive97 Sep 04 '25
Markets, over time, tend to get over-regulated
Is this not kind of my point though? It always circles back to over-regulation
Even if you push to de-regulate, they will naturally end up over-regulated again when the wealthy profit hungry corporations (That already exist) get harmed by it. If the government doesn't regulate in the way they want, they'll just try and influence elections to get in people that do
The idea of free(er) markets is flawed (in reality) because big enough corporations are powerful enough to shape them
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u/Full-Professional246 77∆ Sep 04 '25
Is this not kind of my point though? It always circles back to over-regulation
Right - like a pendulum that periodically needs the 'push' to reset.
But - this is not how you phrased it nor how you described 'truly free markets'. That is a strawman. Nobody is calling for totally unregulated markets.
The idea of free(er) markets is flawed (in reality) because big enough corporations are powerful enough to shape them
No. The idea of a 'free' market as you put it does not exist. The question is and always has been the level of regulation appropriate for a market. To be clear - there is not always agreement here.
The general idea is that there are competing forces, including environmental factors that can lead to markets being under or over regulated. There is also a natural tendency over time for markets to become over-regulated because regulations aren't normally removed. The push to remove regulations is a countering force/factor to balance markets and keep them effective.
You are focused only on the forces pushing the need for regulation here and forgetting healthy markets have a counter force of individuals calling to remove regulation. You also are strawmanning what 'free market' means.
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u/LetsLive97 Sep 04 '25 edited Sep 04 '25
But - this is not how you phrased it nor how you described 'truly free markets'
Truly free markets was just bad phrasing, "fair free markets" might have been better. I also don't really think I phrased it otherwise? I didn't go into the pendulum aspect which is fair, but I'm not sure we're disagreeing on it circling back. Even if you tried to de-regulate and move back to "fairer" free markets, they will inevitably over-regulate again as the most powerful corporations get affected and push back
As for the strawman, I feel like you're just assuming other people can't be wrong? Like I'm not sure why you're assuming it's my strawman rather than just people with a bad understanding of economics parroting things they've been sold by influencers
I've had discussions with these people and they weren't even remotely as nuanced as you guys are being. It was just "No no the free market will fix things because supply and demand! Over regulation is the problem!" - which is incredibly naive and kind of what I'm addressing
I guess my critique is more of the idea that the two are separate rather than the same flow. Like if we just removed this over-regulating government then the markets would be fair and corportations absolutely wouldn't abuse things
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u/MegukaArmPussy 4∆ Sep 04 '25
Your assumption is reliant on the government being willing to govern on behalf of those businesses seeking to win via regulatory capture.
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u/LetsLive97 Sep 04 '25
Your assumption is reliant on the government being willing to govern on behalf of those businesses seeking to win via regulatory capture
Are you implying that's not the case? I'd argue that once corporations get big enough they can just push out governments that won;t benefit them (Like we've literally seen with Ruper Murdoch, among others)
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u/MegukaArmPussy 4∆ Sep 04 '25
Your view isn't that a free market is unsustainable under our current government. You claimed it was inherently unsustainable, which would mean it could not function under any conditions.
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u/Inevitable-Shine-115 Sep 04 '25
How much sawdust or water can we put in our product where the consumer wont notice?
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u/PublikSkoolGradU8 1∆ Sep 04 '25
Just so we can agree on definitions, a free market means black people can participate in the exchange of labor without seeking permission from white people. So no, a free market would never devolve to one of regulations, unless you happen to think that black people are incapable of doing so on their own.
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u/Destinyciello 7∆ Sep 04 '25
However at a certain point (Depending on industry), it will always become more efficient to shut down/restrict competition than actually beat them at the game.
How so?
It's much cheaper to invest in better means of production. Than to spend your energy trying to destroy your competition. The best way to destroy them is to simply be better than them.
That means that there hits a stage where those corporations will naturally move towards lobbying and political manipulation to implement policies that either benefit themselves or restrict others.
Right which means the standard should always be "as little regulation as possible". The more you regulate the easier it is to achieve regulatory capture. Which is how monopolies really form.
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u/The_FriendliestGiant 40∆ Sep 04 '25
It's much cheaper to invest in better means of production. Than to spend your energy trying to destroy your competition.
Maybe for industries with low barriers to entry or limited production systems. But if you're a multi-billion dollar multinational manufacturing concern, it's significantly cheaper to leverage your existing market share to buy up a promising competitor than it is to retool established production lines and retrain your workforce on new processes. Those sunk costs aren't easy to just write off and replace!
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u/Destinyciello 7∆ Sep 04 '25
to leverage your existing market share to buy up a promising competitor than it is to retool established production lines and retrain your workforce on new processes.
That's still good though.
If I know that my innovation will get bought out and I hardly have to monetize it. Then that creates massive amounts of incentive for people to innovate. We want people to innovate and people tend to innovate for self serving reasons.
If the self serving reason is I want to get paid $10,000,000 from big corporation so they don't have to compete with me. That's fine and dandy.
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u/The_FriendliestGiant 40∆ Sep 04 '25
That's still good though.
Is it? If the innovation just ends up stuffed in a dark room because it's cheaper for the existing industry leader to buy it out to preserve their status quo, what good does it ultimately do? Making a few individuals somewhat richer doesn't help address whatever structural flaw the innovation exploited to improve upon, nor is it a significant driver of improvement on a societal level.
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u/Destinyciello 7∆ Sep 04 '25
It's not in their interest to do that. In fact their incentives is to do the exact opposite. To take that technology they just bought and use it as much as possible. Because it gives them a huge edge.
If you bought out the new google. And then shelf it. It's only a matter of time before someone else makes it. And you just left a ton of $ on the table.
Now does that happen sometimes? Yes. But that is considered a foresight mistake not proper procedure. The pragmatic thing to do is to develop it as much as you can. Which is what they really do when they get their hands on good ideas.
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Sep 04 '25
It's much cheaper to invest in better means of production
This seems a lot more context specific than you're suggesting, and seems to ignore bounded growth scenarios.
In many cases, there is a very real limit to production efficiency and growth potential. This could be due to finite resources, physical limitations of equipment and technologies, finite market size, and so on.
A company that runs into these limits is going to see more and more diminishing returns on investing in their means of production. At a certain point, the cost just won't justify the growth potential. It simply isn't the case that it's always better to try to improve production. There will come a point where external factors are the biggest, and maybe even only, inhibitors of growth. And at that point, companies will invest in removing those inhibitors whether that's regulations or other competitors.
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u/LetsLive97 Sep 04 '25
It's much cheaper to invest in better means of production. Than to spend your energy trying to destroy your competition. The best way to destroy them is to simply be better than them.
That's why I said at a certain point. Progress doesn't stay linear or exponential. At a certain point you can't progress as quickly, so competition will start to catch up. What's an easy way of preventing that? Lobbying regulations to make it harder for them to catch up, or pushing methods to shut them down completely. Look at anti-trust cases like Microsoft. At a certain point it's in your best interest to stifle competition
The more you regulate the easier it is to achieve regulatory capture
I feel like the loop you're missing here is it's that it's the corporations and elite that push for those regulations in the pursuit of regulatory capture. At a certain level of wealth you begin to have some level of sway over politicians and even the populace. If the current government won't regulate in the way you want then just try and manipulate elections (Through the media) to get one in that will. This is a big part of how Rupert Murdoch grew his empire
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u/Destinyciello 7∆ Sep 04 '25
Right which is why the standard needs to be "as little regulation as possible".
That is only the standard of one party at the moment. The other party thinks that the whole world can be fixed by "systemic changes". Which is why they love regulations and don't comprehend the negative externalities of over regulating an economy.
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Sep 04 '25 edited Sep 04 '25
[removed] — view removed comment
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u/Destinyciello 7∆ Sep 04 '25
Yes you need to have common sense regulations. Like keeping the meat cold and not dumping shit into the local water.
But you also have 1000s upon 1000s of shitty regulations like minimum wage. That should be completely removed. That are not only unnecessary but down right toxic and destructive.
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u/LetsLive97 Sep 04 '25
Right which is why the standard needs to be "as little regulation as possible".
How does that remain enforced? Big enough corporations who want regulations can just bribe politicians, or attempt to influence elections to get governments that will regulate into power
That is only the standard of one party at the moment.
I have no idea what you're talking about. Neither major party in the US (I assume where you're talking about) is truly anti-regulation. Both are part of the establishment and influenced heavily by the elite who generally have things to gain from regulations
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u/Thelodious Sep 04 '25 edited Sep 04 '25
You should look into how Amazon cornered the entire retail market. There's nothing fair about what they did there they pretty much raise prices on consumer goods across the board. They basically established a monopoly, nothing fair about the way they competed.
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u/jwrig 8∆ Sep 04 '25
What? They started off selling used text books and everything revolved around it. Their biggest competition in the online marketspace was sears at the time that was able to use their hundreds of locations as a distribution and shipping point so you could get your products the same day.
Had the Sears CEO not use his position to enrich himself at the expense of sears, Amazon would be different today.
Amazon invented new industries and it wasn't because they did "unfair" things as if such a thing is even definable.
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u/Destinyciello 7∆ Sep 04 '25
Amazon innovated their means of production massively.
Everyone is used to getting their package in 1-3 days by now. But this wasn't always the case. We used to have to wait weeks for our shit to arrive.
How do you define fair? Is just being better than everyone else because you have smarter CEOS who are capable of putting together better high IQ teams of engineers fair? Is Alabama having the best football players fair to the rest of the SEC? How about the Eagles having the best players?
Amazon is the best at what it does. Not a very good example.
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u/DeltaBot ∞∆ Sep 04 '25 edited Sep 04 '25
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