Re: free-vs-competitive please reply!!
A free market can be defined as a market without direct government intervention. A competitive market is more difficult to define but economists usually have in mind some definition based upon outcomes - something like price tending towards marginal costs and zero profits on average. I think most economists would agree that a free market is a necessary condition for markets to be competitive but there are big differences over the degree of sufficiency. Some economists in the Austrian tradition, particularly Rothbard, either ignore competition or define it so that free markets are always competitive. Neo-classicals partial to laissez-faire, such as Milton Friedman, recognize the distinction but argue in practice that free markets are almost always tolerably competitive when they appear not to be competitive it is usually due to government intervention (such as tariffs) and that government intervention even if sound in theory will usually make things worse in practice. Good economists with a liberal leaning (e.g. Paul Krugman, Bradford DeLong) think that most free markets are competitive (if the rules of the game are clearly defined by governments) but that important exceptions exist for which we need antitrust law and other occasional government interventions. Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED]
Re: free-vs-competitive please reply!!
--- Bryan D Caplan <[EMAIL PROTECTED]> wrote: "What exactly is 'rectifying a conception'?" It sounds like the punchline to a very, very bad joke. Begging your forgiveness, what I am trying to ask, poorly, is what is the "free market," how does it differ from the competitive market as defined in economic parlance, why do economists and economically educated people speak of the free market rather than the competitive market, and how is the free market superior to the competitive market? My inelegant phrase was intended to ask that one "put right" the apparent discrepency between two "concepts:" free vs. competitive markets. It seems that the spirit of the free market requires us to cheer, "Bully for Enron! Too bad it didn't work out!" Whereas, the spirit of the competitive market would counsel us to enforce more rigorous accounting and disclosure standards. I suggest that we do a disservice when in public we praise the former and ignore the latter. With that mess hopefully cleared up, I respectfully re-submit my question. Best to you and yours, -jsh __ Do You Yahoo!? Yahoo! Health - Feel better, live better http://health.yahoo.com
Re: free-vs-competitive please reply!!
john hull wrote: > Please, please, please!!! Will the advocates of the > "free" market, and those uninterested who have an > opinion, please rectify their conception of the free > market with the competitive market so that it doesn't > offend "The Road To Serfdom." What exactly is "rectifying a conception"? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] "He lives in deadly terror of agreeing; 'Twould make him seem an ordinary being. Indeed, he's so in love with contradiction, He'll turn against his most profound conviction And with a furious eloquence deplore it, If only someone else is speaking for it." Moliere, *The Misanthrope*
free-vs-competitive please reply!!
Howdy: Here's my justification for this question: Milton Friedman declared on C-span that "The Road to Serfdom" was the book that inspired him to become a libertarian. So please consider the following: In the Road to Serfdom, Hayek takes great pains to distinguish between free vs. competitive markets. The first are considered to be very contrary to, let's say, American values, while the latter are considered to be in line with said values. Free markets are bad, according to Hayek, e.g. the monopolist should be the "economic whipping boy" to such an extent that any monopolist will welcome competition rather than continue to be a monopolist and suffer the regulation/abuse of government. Additionally, Hayek makes clear extensive oppornuties for government intervention to ensure a competitive market rather than a free market. Please, please, please!!! Will the advocates of the "free" market, and those uninterested who have an opinion, please rectify their conception of the free market with the competitive market so that it doesn't offend "The Road To Serfdom." Begging enlightment, jsh __ Do You Yahoo!? Yahoo! Health - Feel better, live better http://health.yahoo.com
