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by xg15
3786 days ago
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> Even playing field means homogenization, which is completely antithetical to a market as a vehicle for coordinating entrepreneurial plans, necessarily implying imperfections and heterogeneity. There is a difference between random variations and the extreme differences in capital and power we have right now. The benefit that a free market is expected to give to society is, as far as I know, that it will cause a "survival of the fittest" scenario in which the best solutions for a problem gain widespread acceptance and bad solutions die out. But that of course only works if there is actual competition - which in many fields isn't the case in our current situation. > Otherwise, how will they tilt the playing field?
For example by becoming powerful enough that you can control certain market segments instead of just being a player. This power can be reached by becoming a de-facto monopoly in another related segment.
One example of this are smartphones and the "app economy". Apple and Google provide OSes of the vast majority of smartphones on the planet - this gives then the power to create their own controlled markets for apps. No government interference necessary, yet if Google decides tomorrow to block your app to protect their own competing product, you couldn't do anything about it. Similar thinks can happen with large-scale accumulation of property. You agree tgat property enforcement is necessary - but if one entity owns enough property, then even the simple enforcement can be a tool to stifle competition. (See the problems with patents and intellectual property) |
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Not at all the case. You're injecting Social Darwinist assumptions. The benefit of a free market is in having individuals coordinate their plans most efficiently based on their subjective preferences and valuations, with prices as an epistemic vehicle for conveying notions of scarcity, opportunity for arbitrage or other criteria. It is thus a continuous and dynamic disequilibrium process that one cannot anticipate through outside observation, as optimal outcomes are by definition always being revised, renewed and discovered endogenously.
But that of course only works if there is actual competition - which in many fields isn't the case in our current situation.
Competitiveness is one aspect, but a much more important one is constestability. Free markets are by definition ones allowing for the greatest degree of it. And I absolutely agree that our current situation is far from optimal. We are not discussing our current situation, however. Monopolies are a multifaceted subject, many of them based on rents obtained from IP law and hardly "natural".
Similar thinks can happen with large-scale accumulation of property.
There are things called diseconomies of scale that put upper bounds on the profitability and viability of being too big. Economic calculation issues set in, principal-agent inefficiencies, coordination problems and so forth. It is only through the subsidy of an exogenous body such as government that one can hobble along in inefficacy for exorbitantly long times.