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Markets Are for Me

By       Message Gregory Gull       (Page 1 of 2 pages)     Permalink

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Is the free market the best means to efficiency and effectiveness? Let's critically think this through.

What is "the market"? The market is essentially a quid pro quo exchange, a transaction. A transaction is not an actor but a procedure involving two or more people acting in service to their own interests. It is an exchange of goods and/or services for something else, presumably an equitable exchange. (Relative to the presumption, how many of us have been on the short end of an exchange?)

Essentially, the market is a transaction between buyer and seller--an economic exchange between two actors or agents each seeking maximum gain in the transaction. So, is there a need to regulate such exchanges? Many argue that markets are self-regulating. If markets are transactions, not actors, then just who is the "self" doing the self-regulating? There is no self, so no one is responsible for what happens next. But, without regulation, how can stability of the larger system, within which the transactions take place, be otherwise ensured?

The market has no built-in control center to receive, review and interpret feedback, thus enabling adjustment within a rule-bound framework to maintain homeostasis of the system of exchanges or transactions. There is no control center guaranteeing or ensuring free access to full and timely information by participants (especially the least advantaged) throughout the period before, during and after transaction. In fact, the rationality of self-interest maximization suggests it is in the seller's self-interest to not be fully transparent; it would be foolish to reveal one's hand when competing for gain. After all, the saying goes: let the buyer beware! So, just who is really free and safe?

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If self-interest maximization is the guiding principle in the market, how, then, is the need for equity/stability through exchange realized? What is the counterbalancing rule to the principle of self-interest maximization--maximize what's-in-it-for-me--that will ensure the larger system's (e.g. social, economic) viability is sustained?

Since, in the United States there doesn't exist a compelling collective vision about "we," there isn't a shared sense of what's-best-for-we principle to guide individual action in exchange. Oh, there is individualism and an us-versus-them feeling that arises in times of military action against a foe or natural disasters, but we mustn't confuse this circle the wagons and fight dynamic with a commitment to advancing the well being of the collective we.

With what's-in-it-for-me being the defining principle, it seems clear why there is no "we" coming together to solve our common problems. Hence, we don't have clarifying and productive dialogue to come to terms with dilemmas among shared values toward improving society and its (public) services; instead all there is is unending conflict among self-interest. Perhaps, this is why the U.S. is the only industrialized nation without universal healthcare for its citizenry.

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Accordingly, advocating for free markets for public services (e.g. healthcare, education) is to essentially ignore the need for equity and stability through exchange, particularly for those without leverage. It seems free market advocates believe the fact that the market is free is all that is needed--that freedom plus market transactions afford effectiveness and efficiency of the larger systems (i.e. economy and society). Just how does freedom to buy and sell whatever you want ensure equity and stability of the system?

Free To Do What?

What does free mean? Free from planned action, especially from a central authority like the government? But, don't corporations plan? Don't corporations exercise authority by deciding what to offer, whom to offer it to, where to offer it, when to offer it and for how much?

Does free mean free from constraint, and, thus, free to act or transact as one pleases? If so, then we should rid ourselves of formal/legal contracts, since they only limit freedom to act--trust the market fully. But, in an interdependent world, unconstrained individualistic action is not reasonable or responsible! In an interdependent world, freedom to act is always constrained action: our freedom to act is necessarily constrained by our responsibility to not infringe upon the rights of others, unless of course you ignore your "I-We" responsibility of stewardship . Perhaps contracts are necessary, since following the principle of what's-in-it-for-me, many act solely in service to self-interest.

Where, then, does the needed guidance of fundamental principles or standards upon which to make adjustments come from for maintaining the system's stability and viability? If it is open to the desires of the participants--or more likely to the participant with greater leverage--how, then, is equity and fairness in exchange ensured? Who is concerned about and asks: what happens after what happens next, and what are the (short- and long-term, local and global) consequences of the proposed action? It seems free market advocates say "the invisible hands" will take care of it. Oh, please! Why not the tooth fairy?

It's Just Business, Nothing Personal

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The business of business is profit: This reflects one of the underlying precepts of the egotistic capitalistic system, that we ought not allow concern for the other to interfere with our pursuit of gain--it is not personal it is business. As stated by Adam Smith, "It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from the regard to their own interest." This is reflected in the widely accepted practice that the conduct of business requires pragmatic, impersonal interactions to ensure efficient profitable economic exchange. Why else would a corporation's stock realize an upward bump following the announcement of a decision to layoff thousands of people?

That is to say, the regulation of relationships is the responsibility of the market, and such relationships, in pure business terms, are free of any purely-human concerns and sentiments. The market cares not about you as a person; you are merely a source of revenue until, that is, you begin to detract from profit. It is survival of the economic fiercest, and it is surely not for those in touch with their humanness.

Therefore, with the market in charge, we need not concern ourselves with each other as human beings, or our true self, for that matter. There is no place for human sentiment of any sort getting in the way; it just makes for inefficiency and ineffectiveness--where effectiveness is measured by profit. We might say that one's freedom to decide would be inhibited by such concerns. But, aren't these very concerns aligned with long-term interest and representative of a caring society of people?

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My educational background includes a Ph.D. in Organizational Studies, an M.A in Statistics and a B.S. in Mathematics/Education. My experience in business and industry is as extensive as it is diverse, having held positions across the full range of (more...)
 

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