Reply to post: The death of the free-market

Govt control? Hah! It's IMPOSSIBLE to have a successful command economy

Neil Stansbury

The death of the free-market

The economy - or rather the (idealised) free-market is just a collection of billions of individuals acting in their own self interest. Claiming you can plan an economy is as naive as claiming you can plan the weather, the trillions of interactions in the system are way too complex and their consequences unknowable - certainly to any reasonable degree of accuracy.

That aside, the real reason Communism and it's little brother Socialism don't work is because they assume someone, somewhere knows what's best for everybody all at the same time, and so deny that one individual might have different needs, wants and desires to another. Comrade we are all equal after all.

One of the reasons many people, misunderstand the free-market, is that they believe that there is a "rational" choice to be made by consumers, and that as human beings aren't rational (the counter homo-economicus argument), those decisions must be made on their behalf - and the "free-market" managed.

Aside from the fact Adam Smith never claimed participants were "rational" - he suggested they were "self-interested", human beings actually make "personal value judgements" - that may or may not appear "rational" to a 3rd party. By accepting that decisions in a free market are individual value judgements - not absolute rational choices, the entire counter-homo-economicus argument becomes irrelevant.

My missus owns a pink sports car. She waited longer for delivery, paid more for it, and will probably find it harder to sell and for less money. In my book that is not a "rational" choice. However, as her value judgements are different to mine, the cost/benefit of that decision is something she finds acceptable.

I very much doubt any collection of civil servants centrally managing the economy would ever have created the jet engine, the iPhone, eBay, or pink sports cars.

The sad reality is though, there is no free-market, and in the next major economic downturn, "free-market" principles will get the blame - rather than the interference by politicians and their lackies, not least for magicking swathes of money out of thin air, whilst attempting to arrogantly and benevolently conduct the needs and desires of humanity like some grand orchestra.

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