[mjburgess]

err.. no, free markets are state constructions.

By default, an unregulated market becomes non-free essentially immediately, as cartels form (indeed, as cartels of cartels form, hence states).

As Hobbes observed, in the state of nature there is no motivation to remain as an individual, so you form groups in order for self-protection. In an "anarchical market" you end up with incredible levels of monopolisation (etc.).

A free market is a state construction whereby cartels, scams, fraud, (murder, theft, etc.) is prohibited so that limited liability collectives (another state construction) called "businesses" can freely compete for labour and profit.

[vundercind]

FWIW, to bystanders without context for this area of study, the parent is basically the orthodox take on the role of the state in modern economies and “free markets”: in short, you can’t have one (certainly not a highly-productive one that makes life not-suck) that lasts for any length of time without a state, and the “shape” it takes and whom it serves and to what degree is meaningfully determined by same state.

[mjburgess]

There is an irony that capitalism is claimed by the anarcho-libertarian lot. As capitalism is the most collectivised system in human history (consider, only, the scale of Microsoft) -- and also the most anti-capitalist system (ie., it forces capitalists to compete and hence dramatically diminishes their power relative to other systems).

Perhaps one day we might see capitalism as an "iterated socialism" (ie., socialism as thought about if you include time in your imagination).

And communism, libertarianism, anarchism, etc. as all products of a time-free form of reasoning where you can just pause the world and imagine that all people will "run the same program".

[vundercind]

Yeah, last I checked the “story” of capitalism and strong market economies is generally regarded as essentially having the emergence of the proto-nation-state (as in e.g. Spain under the “Catholic Monarchs”) as a prerequisite, as far as being something that can exist on an all-encompassing scale rather than in the margins, in tiny states navigating the “waters” between larger polities with other economic systems.

Stability and guarantees from a strong central state really grease the wheels of commerce.

[kelseyfrog]

That's essentially my understanding too. The legal construction of property, and rule and commodification of law are all necessary functions of market economies.

[samatman]

Cartels are a feature of free markets.

I would argue that it's good for the state to take some sort of interest in regulating them, one of several ways that I'm not a free-market fundamentalist.

But arguing that the formation of cartels makes a market non-free is backward. Cartels emerge through free association in trade. Regulating them might make for a more functional market, a more efficient market (or it might not) but it makes for a less free market, always.

I will add that I consider the very idea of "absence of the state" to be badly-formed, states vary considerably in their constitution but there's always something serving that role, even if it's a few elders in a village.

[asadotzler]

If a cartel sets the price, rather than supply and demand, is it really a free market? Of course the answer is no and that's obvious to anyone giving it any thought at all.

[mjburgess]

A market isn't free if prices aren't set by supply and demand operating under the guarantees of free exchange given by states (ie., property rights, and the rest).

A cartel sets prices, and is one of the many ways markets are unfree.

There's a ton of confusion created by libertarian sorts who fail to distinguish between government regulation which sets prices, and regulation necessary for the operation of the market itself. Basically delusional ideologues have denied the latter exists, by just ignoring it.

If a government acts to set prices it makes a market non-free, just as much as if a cartel does so. "Free" cannot plausibly mean that a mafia is fine but a police force isnt.. and the claim that it does is just libertarian propaganda.

Governments which regulate markets so as to prevent cartels are acting to prevent the very sort of price-setting which "free" denotes does not occur

[ludwigDual]

> A cartel sets prices, and is one of the many ways markets are unfree.

That's true, but cartels can't enforce this. New or external firms can compete with the cartel. If a cartel reduces production or raises prices then it incentivizes competitors to meet the market demand with lower prices. The only way the cartel can exclude new firms is by controlling the entirety of some resource or enforcing the cartel usually in the form of lobbying for regulations.

[wahnfrieden]

In Ontario, the "dairy cartel" invaded the big name convenience stores and groceries and forcibly replaced product on the shelf with their own without repercussion

[ludwigDual]

I wonder what factors prevented competition with the "dairy cartel" in Ontario as would happen in a free market. Most likely there are restrictions on what products can be sold to willing customers that are costly for smaller firms to comply with. There may also be subsidies that have criteria that entrenched firms benefit from, but impose additional restrictions on how new firms can function.

[mjburgess]

Why would it be worthwhile to compete with a dairy cartel? Of all the things one can do with capital, why go to war with a cartel over relatively small margins?

You're assuming also that the cartel is operating only "economically", not also, eg., bribing, blackmailing, (stealing, murdering, ...), ...potential competitors. Why not just invite any competitor into the cartel? Why not buy them out? Why not "make life difficult" for them?

The underlying assumption that "things wash out" requires supposing that an extremely simplistic newtonian model of an economy where politics doesnt really occur. But people are foremost political, ie., engaged in tribal behaviour, collectivising, using force, and so on. This doesnt "wash out".

[wahnfrieden]

graeber/wengrow would disagree

[samatman]

Neither of those people are a good source on the common definition of free markets. "Free market" is just two words, they can mean whatever an author wants. But it's useful to have a common vocabulary, and respectful to stick with the definition used by whomever introduces a term.

[wahnfrieden]

> I will add that I consider the very idea of "absence of the state" to be badly-formed, states vary considerably in their constitution but there's always something serving that role, even if it's a few elders in a village.

[phpisthebest]

well now we will get in a Hobbes vs Locke, I am more Lockean

I disagree, and history has shown that free markets absent government control doe not instantly become monopolized, and infact through out most of history monopolize form when the government regulates the most

Look at todays market as an example, the most competition is present in markets where the government has the least influence, where markets like energy, healthcare, etc which are the most regulated are also the most monopolized

[mjburgess]

I know of no example in all of human history of a free market without a state, at least one of more than a short period -- so my position is very weak here, if you can show only one, i'd have to at least modify it. Yet, I bet you cannot.

Neutrally, using the term "anarchical market", i'd say that these markets are empheral. Everyone them has to act against rules which are not in their self-interest, it's highly unclear why a subgroup of market participants wouldnt immediately collectivise and outcompete everyone else.

Collectivisation is human's superpower, and the obvious an immediate thing basically everyone does (hence: mafia, warlords, cartels, etc.). It would be remarkable to see this anarchical market of yours remain free for very long, so I'd gladly hear of one case.

The main mechanism against collectivisation is that some biggest baddest collective decides to prohibit it (hence the state). There may be others, but I can think of none that would operate under anarchical conditions.

[tremon]

[an] example in all of human history of a free market without a state

The Hanseatic League. This was basically its own trade association across North Europe, based on maritime trade. It had considerable market/economic power, but no legislative power; most participants were city-states so they were self-reliant to a degree, but none of them had jurisdiction or power over the entire group.

[mjburgess]

I can't speak to the example other than skimming wikipedia, but:

> Hanseatic Cities gradually developed common trade regulations.

> That year, the merchants of the Hansa in Cologne convinced King Henry II of England to exempt them from all tolls in London[26] and to grant protection to merchants and goods throughout England.[27]: 14–17

> etc.

> By the mid-16th century, these weak connections left the Hanseatic League vulnerable, and it gradually unraveled as members became consolidated into other realms or departed, ultimately disintegrating in 1669.

So it looks like the league was parasitic on the relevant states involved being able to implement regulations, so, basically exactly the point i'm making.

And secondarily, insofar as the legague itself lacked a mechanism to enforce transnational agreeement, it was weak and collpased.

So QED: insofar as participating states had viable regulating mechanisms the system work; insofar as challenges arose which requrired transnational mechanisms, it fell apart.

[mcv]

Markets do not instantly become monopolized, but they do tend that way, and will also eagerly form cartels unless stopped by regulation.

Of course it matters what kind of regulation; it's also possible to regulate markets in a way that protects monopolies, and some governments do that. So it's important to have a government that understands the importance of a free market.

To give you some examples, the Dutch markets for health insurance and energy are entirely privatised but heavily regulated, and quite competitive. It's easy to switch from one provider to another, and so they compete hard on price. Although perhaps more so in the early days after privatisation than more recently.

On the other hand, the market for software is not very regulated, it's heavily monopolised. Sometimes the EU makes moves to increase competition, but that's only piecemeal and not always terribly effective; Microsoft still rules the desktop, except in those areas where Apple now rules it.

[ludwigDual]

> Markets do not instantly become monopolized, but they do tend that way, and will also eagerly form cartels unless stopped by regulation.

Monopolization requires control of land or resources. This is because any cartel's attempt to set artificially high prices can be undercut by new entrants to the market who aren't in the cartel.

> On the other hand, the market for software is not very regulated, it's heavily monopolised.

Software is monopolized primarily through regulated monopolies on software (re)production i.e. copyright.

[mcv]

There's plenty of pirated Windows around, but everybody still has to use Windows. Linux got into the gaming market only by supporting the Windows apis, and that support is still not quite perfect.

It's not copyright that monopolises software, but api support. The need to reverse engineer other people's work. A lack of open standards. There would be more competition possible in software if regulation mandated open standards and open apis.

So no, you don't need control of land to enable monopolization. You don't need IP law either. There are a million different factors that can drive monopolization, and many of those factors do require some degree of regulation to mitigate them.

Although you could argue that corporations themselves are a government-created construct, and removing those would remove the problem. That could be true, but that's a very big step.

[ludwigDual]

> There's plenty of pirated Windows around, but everybody still has to use Windows.

The threat of jail time for people sharing pirated copies or circumventing copyright protected measures changes the pros/cons people weigh whether or not some people copy or reverse engineer despite those risks. There would be a lot more competition if pirates weren't incurring all these additional risks and were able to compete fairly without state backed copyright monopolies.

> There are a million different factors that can drive monopolization

The primary driver is restricting competition. If your competition is unrestricted then why would they join your cartel when they can outcompete you? Someone will always see that they can get a larger piece of the pie by outcompeting the cartel. Monopolies always use force to prevent winning in fair competition.

[mcv]

One thing that they have often done in the past, is to temporarily drop their prices to outcompete newcomers, making it impossible for newcomers to outcompete them, and raising their prices back up once the newcomer is gone. The established monopolists always have deeper pockets than the newcomers. I'd love to see how you stop that without regulation.