Tuesday, April 27, 2010

No free markets

[Here's another of my posts in this thread]

I think, even in the absence of government regulation (and corrupt politicians), large scale markets can never be free from manipulation and exploitation. If the big dogs in the market can't leverage laws and politicians to gain advantages they will use elements from other systems in the overall framework.

I'd like to point out I don't think this is a problem unique to markets. Most (all?) large systems can be manipulated by the powerful players in the system to gain unfair advantage over others by exploiting the overlaps between that system and other systems in the overall framework. This can lead to corrupted governments or corrupted religious organization or corrupted labor groups or corrupted markets, corrupted banking systems, etc, and combination of all of the above.

If each system in the framework can be corrupted by powerful players, what can be done? Another why to think about this problem is to ask: Which system in the framework is the best choice to limit the corruptibility of the other systems? I would argue that a government that is accountable to its citizens is the best choice, provided the citizens participate in and monitor the political processes.

Of course, if all the above is true, but expecting people to participate in and monitor the political processes is unrealistic and will never happen in the real world, then I have no idea what is the best system to keep a check on the others.

No comments:

Post a Comment