There is no true free market in the world. One of the defining characteristics of a free market is perfect information. This is one of the downsides of market imperfections.
Ergo, it is a downside of all unregulated markets.
I would avoid the term "imperfection" for something that is fundamental to markets. The information on conditions of production usually has to come from the seller and there is usually little incentive for them to provide it unless compelled to.
It is fundamental to all markets in the real world. It is also a defining trait of the platonic ideal of a free market, and one of the reasons why the platonic ideal absolute free market is unrealisable. Markets can be more or less free, but never entirely so. Regulation by non-market forces is one way that markets are made less free. Such regulation is often intended to counteract or offset other things that make the market in question less free.
Didn't say that. Poor information on the conditions and effects of production is fundamental to unregulated markets. Much like externalities, they are not mere "imperfections" or footnotes which is usually how they are presented in pro-free-market Econ 101 texts. They are fundamental; e.g. much of the environmental threat the planet faces can be contributed to externalities and poor info. Nevermind the poor animal-poop slaves.
Regulations and activism (such as this type of journalism) are some of the non-market forces that can compensate.
Why do you think that a free market requires perfect information? Do you think the situation is the same for a democracy? Does it also require perfect information?
The linked commentary argues for the abolition of medical licensing. I could probably rest my case right there.
We actually had a lengthy experiment with that earlier in America, pre-regulation. It's where the term "snake oil salesman" originated. The establishment of medical licensing led to a dramatic improvement in public health.
If there's one characteristic of deregulation advocates that you can count on, it's that they have a complete disregard for history.
As for democracy, many attempts have been utterly subverted by voter fraud -- e.g. myriad dictators that win >90% of the "vote" in their countries. It is only through strict regulation that we've come to trust the accuracy of our polls to the degree that we have in the U.S. Having said that, what passes for democracy here is still utterly dominated by money, in that the best-funded candidate usually wins. Again, regulation of money in politics would be one way to improve on that defect.
Elections in the US are very poorly regulated - political appointees are Election Officers, gerrymandering of political districts is wholesales and your election turnouts are very low by international standards. The best funded candidate wins because your political parties are very weak. One of the core reasons behind this is that in 1948 you nationalised your political parties. In no other country in the world is the internal 'elections' of a political party - the way you select your candidates/primaries - run by the state. In only 8 of the states (I think!) are candidates selected by members of the parties only. Membership has no meaning - which means parties have no meaning - no collective existence. This lets private money rule the day in all your parties. When I was selected as an SNP parliamentary candidate in Scotland I was forbidden to spend ANY MONEY on my selection campaign. Only paid members of the party can select a candidate - and the only way to get selected is to be known the members personally and to do the work.
I'm all for regulating money out of politics. But point of clarification (since we're being all parliamentary).. I was comparing the U.S. to countries with even weaker election controls.
Before resting your case regarding the licensing of individuals to practice medicine, would you please comment on whether individuals who write software used in medical devices should also be licensed?
Your response and the URL of your link refer to free markets, and they by definition require perfect information. The info at your link talks about something else.
In particular, perfect information is required in order for the free market to allocate resources efficiently; if obtaining information has a cost, there are all sorts of fun ways to abuse that in order to break competition and misallocate resources. You can see this in the US cellphone industry - by increasing the complexity of their plans, cellphone providers have made it more expensive to comparison shop, meaning that customers (rationally) go with the first option rather than the lowest-cost one.
You can also see this with some of the smaller-scale Ponzis and investment scams - so long as the amount of money each investor has invested is much smaller than the amount it'd cost to investigate the investment, it's not rational for them to do so. One of the recent US Ponzis, Perma-Pave, actually failed because they got greedy and took on a large investor with reason to investigate what had happened to their money.
The same reason integrals require continuous functions, which also can't meaningfully exist: it's a mathematical model. Just because it can't possibly exist in the real world does not mean it's useless or even "wrong" per se.
The link you posted is on shaky ground and is quite unrigorous. The whole "democracy" example is poorly thought out. and then oddly enough we have a "regulated" democracy in the form of representatives and checks and balances ... to just add insult to injury to your argument.
>One of the defining characteristics of a free market is perfect information.
'Perfect information' is an unrealistic assumption used in neoclassical models which treat knowledge as just another input, on a par with raw ore, pork bellies or gasoline. In the real world it just doesn't work like that.
The defining characteristic of the free market is that it is a creative process of discovery. It creates knowledge where none existed before. There can be no such thing in principle as 'perfect information'. Information tends to exist in the state of being inherently dispersed among the actors, often tacit to the point of being inexpressible. The market facilitates the use of such knowledge, and the the discovery of new knowledge.
I would avoid the term "imperfection" for something that is fundamental to markets. The information on conditions of production usually has to come from the seller and there is usually little incentive for them to provide it unless compelled to.