I’ve done a post similar to this before, but I wanted to rehash some of my fundamental beliefs concerning the free market. I did a previous post called Foundations of a Free Market, but I wanted to state things in another way.
Basically, I believe that the economy should be based upon mutual exchanges between two individuals or parties. I think the price set should be discussed between those two people/groups, not regulated by a third party. That means that I believe wages and prices should be set between those two groups. I think that when wages and prices are regulated, it can hurt the weaker party as often as it hurts the stronger party. What if I cannot find a job for the minimum wage? Shouldn’t I have the freedom to bargain for a lower wage if it is worth it to me? Why do we allow unpaid interns, but not interns making less than minimum wage?
Also, I don’t think the person receiving the service should set the terms, but the person providing the product. For instance, it is unfair for me to demand that Apple provide their iTunes songs in any format I wish. It is there stuff. Who am I to say, “I want it like this.” Apple doesn’t even have to sell me anything. What if they didn’t exist at all. Should I say that I am better off getting nothing from them, than getting something from them, but not in the format I like. The same goes for smoking bars and restaurants. The restaurant doesn’t have to exist in the first place. Who am I to set the rules of their establishment? I’m not entitled to a non-smoking restaurant.
Furthermore, people should not be heavily restricted in being able to start a business. The government should not regulate the number of a particular business. For instance, if there are already plenty of insurance companies or taxi companies in a city, it is not the role of the city to say “No More!” Let the market determine how many of a business their should be.
Along with this, I don’t think government should regulate excessively concerning the quality of certain companies. Now, this is a gray area. I can understand the government getting involved somewhat when safety or health is concerned, and that is an area in my mind that I am still trying to figure out. What I refer to is more quality apart from the safety aspect. In short, I don’t think a professional should have to be licensed by the state or city, unless the license only includes issues such as safety and health. I don’t think someone should have to go through extensive training to hold a job, as long as it is understood that they won’t kill anyone. I believe the quality aspect will mostly be controlled by the market.
Oh yeah, and I do not believe in business subsidies, except for emergency cases (destruction of crops, airline closures due to terrorist threats.)
I would like to revisit the issue of negotiation of prices/wages. There are two reasonable criticisms I would expect from anyone of any persuasion.
1) Some people have much more power than others when it comes to negotiations. Corporations are a glaring example.
2) People may not receive their basic needs with a free market.
Concerning criticism 1. Yes, some have more power than others. But I do not believe this power balance is stagnant. People can attain more bargaining power as they go, primarily through work experience, and through education. A free market rewards those who work hard. Those who are just starting out have little bargaining power, but those who work over time gain bargaining power in their wages. I think it is just that one’s wages match their accomplishments, education, and ingenuity.
Concerning criticism 2, I think this is an area for other institutions to get involved. I would prefer private charity, but remember, I don’t call for the abolition of welfare. I prefer welfare to help those who help themselves. But if I had my choice, I would prefer a larger welfare system over a more regulated market. I think a less regulated market helps prices, so less welfare would be needed. Also, I think it makes sense philosophically. Things cost what they cost, and people’s work is what it is worth. No amount of regulation will change that. I would rather someone receive a little financial help to buy a house, than regulate the price of the house. I would rather welfare give someone a little push, than making him work for a wage that is higher than what his current skills are worth.
There are other issues, no doubt. For instance, the morality of what can be sold, i.e. adult movies, drugs, etc… Also, another huge issue is the environment. But when I refer to the importance of a free market, I mostly refer to the negotiation of prices/wages, the freedom of someone to start a business, and the customer not dictating the terms of the negotiation.