6 Myths of the Free Market
- Myth: An unregulated free market will produce the best product at the best price. Reality: The specialty of free market systems is to produce maximum profits for those merchants selling there. It only maximizes value for the consumer if there is healthy competition. If a merchant (corporation) becomes big enough that they can control anything but their own prices and product, this model fails to protect the consumer.
- Myth: Regulations inhibit the ability of a free market to provide the products people want at a price they want. Reality: Sure, regulations could theoretically be used in any number of ways to inhibit products and prices. However, regulations can be (and usually are) used in positive ways to encourage healthier competition, protect consumers' interests, and keep prices low, among other things.
- Myth: Nothing good comes from regulations. Reality: Here are a few good things brought about by regulation: nutritional information on food, absence of price-gouging as the rule in a time of crisis, minimal safety standards for cars, near absence of many previously fatal/serious diseases such as polio, small pox, measles, etc.
- Myth: Consumers know what they want. Reality: You can't make an informed decision without information. Most useful information a consumer is interested in when making a large/important purchase is only available because of regulations.
- Myth: We have enough regulations. Reality: When there is profit to be made by finding a loophole in existing regulations, it will be found and exploited. Whenever new technology comes along it frequently opens new loopholes. As long as we have technological progress, we will need regulation to keep up with the technology.
- Myth: The free market is democratic. Reality: The free market is capitalist. The difference between capitalism and democracy is that the worth of your "vote" is in direct proportion to your bankroll. Sure, anyone can vote with their wallet, but the market only listens to the people with the biggest ones.
In today's world, most Fortune 500 companies are fully capable of manipulating their market to a great degree, with many of them having power over many different markets. Due to the state of politics in this country, regulations are far behind technology, and these corporations would like to keep it that way, and even expand the gap. If you're that big already, any softening of regulation (or advance in technology) allows you to take a few more pennies out of your customers' or employees' wallets and use them to pad the wallets of your executives and shareholders.
Anti-regulation is anti-democratic.