The free market is a series of exchanges that different entities engage in because they deem those exchanges to be beneficial in some way. Edit: without interference from government or any other entity outside of the exchangers themselves.

In a nutshell an auction. There price and demand are equated instantly. Its not stable for buyers or sellers from a planning perspective, but will set todays exchange of trade. I too await the direction of this thread.

I'm liking the edit.

My definition:

A free market in X is a condition of a society where they buyers and sellers of X are able to publicly trade X without violent interference from 3rd parties.

Note that a government can be helpful in protecting a free market. Say to keep away criminals or prohibitionists who think the trading of X is immoral.

I'm not sure about the violence qualifier. Does non-violent interference make it not a free market? I want to say no, but I'm not sure.

I know where it is going. People who are against concept X generally use concept X as a dumping ground for illogical thoughts and emotions that are not necessarily related to concept X. What I think Boro is trying to do with this exercise is try and clear out all of the fallacies that are related to the free market so people who oppose free market principles will do it less out of mistaken logic and more out of an honest understanding of it.

LMAO




government sure is great at protecting trade in things people deem immoral

A heavily regulated market in which I can buy or sell anything I want, within those regulations..

"Can be" != "Always is"

Abortion market is an example in which the government protects trade (through force if necessary) in things people deem immoral.

That governments can prevent a free market is obvious and not worthy of comment.

That they can protect a free market is worthy of comment I think.

Think of the market for abortions and government efforts to ensure access to abortion clinics.

In my opinion.

Voluntarily.

The point of the thread is I want to understand what the typical lefty who argues against "the free market" actually thinks he is arguing against when he uses that term, particularly negatively. I am pretty amazed that I've only gotten (I think) two straight answers, from iron81 and 13ball (thank you both).

Roderick Long makes a good point about the way the word "capitalism" is loaded, and acts to conflate incompatible things in people's minds. Michael Moore's new movie "Capitalism: A Love Story" is a great example of this. Everything that Michael Moore bitches about in the film as far as I have seen from reviews is not what I would consider capitalism at all. Rather it is "crony capitalism", corporatism, neo-mercantilism, etc. So people have this definition in their heads that "capitalism" means special privileges, protections, corporate welfare for giant corporations. Worse, "capitalism" is almost inextricable tied in the language to "the free market". When most people hear the terms, they think "the free market" = "free market capitalism" = "capitalism" = special privileges, protections, corporate welfare for giant corporations. They may at some level also understand that "the free market" means people voluntarily exchanging with each other, but their definitions can become muddled so that they think something like "'free market capitalsim' is a system whereby people are free to exchange with each other characterized by giant powerful corporations with special priveleges, protections and corporate welfare." Using language like "the form of free market capitalism we have here" is like saying "this here square circle." Special priveleges, protections and corporate welfare are the exact opposite of the free market, in my opinion.

I would say that "the free market" is simply the matrix of all voluntary exchanges. This is neither descriptive* nor prescriptive, it is definitional. In other words, I would say that an involuntary exchange, whether it be through private crime or government intervention is external to the free market by definition.

I still have yet to hear what anyone believes the social implications of a free market are and why.

*As in I am not trying to describe or "model" the actual state of the entire economy as a "free market".

Who cares? If they are selective about which markets they are going to protect, why does it matter that they can do so? They can also demonize entire markets.

OMG THIS

Who cares? Probably the people affected. What's good for you isn't always good for someone else.

I think the purpose of this thread is to think about and work towards a common definition of a free market. The wikipedia definition says that only government can make a market not free. After thinking about it, I think that's not the most useful definition.

free != efficient

we are defining free market. whether you believe a mixed economy is more efficient than a free market doesn't change the definition of a free market.

I'm going to assume you are addressing me.

1. I never claimed anything like a mixed economy is more efficient than a free market. For quite a few posts I think you've been responding to points I didn't make.
2. The definition of a free market is what I'm posting about.

I'm saying this definition is less useful:

This definition is more useful:
I think the definition would be even more useful if "any 3rd party using the threat of force to prevent (or regulate) an exchange of X" was in the definition of "not a free market in X" though.

I was using "you" to mean "one", so wasn't trying to claim anything about your economic views.

I think you are saying that if a government steps in to protect a market, it isn't really a free market anymore? I at first thought you were arguing the opposite, that a government can make a market "freer", by protecting against fraud. To me, that doesn't make the market freer, although it might make it more efficient.

To many people, a free market means a market where people are free to pursue equal economic opportunity with government intervention in the case of market failure. To an economist however, free markets should include plenty of market failure, or at least that is my understanding of the definition.

Hopefully that clears things up?

Oh, and I should also point out that in a free market, there are often market-based solutions to market failure:

http://en.wikipedia.org/wiki/The_Market_for_Lemons <----describes failure in used car market
http://en.wikipedia.org/wiki/Adverse_selection <---general info on the particular type of market failure (also applies to insurance)

http://en.wikipedia.org/wiki/Carfax_%28company%29 <----method of solving asymmetric information problem

Already included.

If I can publicly express my desire to buy/sell X without fear -- that's a free market. If somebody is going to hurt me to prevent/modify the terms of the transaction -- that's not a free market. That somebody might not be the government. It might be the mob guy telling me I need to buy from only him.

I'm all in favor of market failure. I market failure. So I think that's not a very useful definition.

We're getting closer.

I just saw Moore on Lou Dobbs and he basically said that it was ironic how all these big corporations talk about the free market but then when the going gets tough they turn around and actually try to implement communist solutions. He said that big business likes business but likes it when they are the sole provider of that product. Obviously Moore has some idea we dont have a free market so I cant wait to see how the actual movie plays out.

Like the Constitution, the "free market" is living and breathing, and its meaning and interpretation can bend any which way it needs to.

The "free market" is a Ferrari driven by right-wingers with tags reading "STATUSQUO" driving "in excess" of 200mph past huge signs that say "DANGER: BRINK AHEAD" while getting like 2 miles to the gallon even on the highway.

I want more pizza slices its only fair imho

Boro, I live in the UK (almost zero libertarians in this country) and for what it's worth whenever I tell people I am totally in favour of free markets they will immediately say they are bad because they reward greed and are just "dog eat dog" etc. Same with the word 'capitalism' like you said.

Usually when I rephrase it that I don't believe anybody has the moral authority or right to get in between two people making a voluntary exchange they understand my view a lot more, but the words 'free market' and 'capitalism' seem to install instant disgust in most people here that I've talked with.

The problem is that capitalism in its loosest definition encompasses absolutely everything. If you're not allowed to put anything into the definition then it becomes merely a token word for exchange, and then even the most rigorous colossus communist bureaucracy would be capitalistic. That's not very useful.

Is theft capitalism? You forgot the word voluntary. The simplest explanation is "voluntary exchange."