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Nope. It doesn't in any way. A free market is one where prices are set based on supply and demand without restrictions on competition due to monopolistic power
by ucaetano 7y ago
Nope. It doesn't in any way.
A free market is one where prices are set based on supply and demand without restrictions on competition due to monopolistic powers, market reserve regulations, etc.
There are always limits to competition, some due to scale, some due to market size, some due to availability of resources. None of those prevent a market from being free.
Even antitrust regulation doesn't necessarily prevent a market from being free.
- joshuamorton 7y agoTo add, Adam Smith's original postulation of a free market was an explicitly regulated market (for example to prevent monopoly influence). There are all sorts of ways we aren't in that world (for example a free market requires a fully informed set of buyers, which practically speaking never exists).
- ucaetano 7y agoExactly! Free market != laissez faire. But a market where exorbitant costs of regulation drive up the minimum efficient scale to the point that no new entrants are possible is also not a free market.
- tehjoker 7y agoI don't think the dictionary definition is useful here. A market can be "free" while granting inordinate decision making power over the population to a few people - the opposite of a democracy. The prices can be here or there, but the relationship between people is what matters. Who has power and who decides how to use it?