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Free-market economics is the removal of restriction and regulation by government entities relating to mainstream enterprise and business. In free-market economics, the distribution of goods and service is based almost entirely on demand – that is to say that the higher demand, the greater production and thus lower prices, whereas current economics allows business to charge infinite fold in comparison to the actual production cost.
Free-market economics may fall in to two political ideologies in the United Kingdom: Socialist or right winged Conservative. In general, each ideology will view free-market economics as either good or bad, depending on the then political climate, and economic stability. Both sides will also have separate base-line philosophies over the principle purpose of free-markets.
For example, many socialists view free-market economics as the removal of large, multinational corporations in favour of diverse, small business. In free-market economics, employees are not property of their employers, and are given wages which directly reflect the wealth generation of the business or enterprise they are employed by. It is currently used in companies such as John Lewis, where employees are given shares and have bonuses calculated at a percentage of the total wealth.
Socialists would view this as prosperous for employees; however Conservative principles would see it in favour of business owners, or those wishing to set up business. In free-market economics, there are no regulations preventing businesses from buying out competition, nor are there often strict regulations on the sourcing of materials to make a project (although, often is the case in traditional capitalism). Such a lack of competition laws not only allows successful companies to increase in value from the amalgamation of failing or small business, but also motivates business to be more successful and sensible with the output of fiscal – when sharks surround a vessel, not often will divers jump into the jaws.
My argument for free-market economics extends to private consumed goods; regulation of items which are not essential to life would be removed, with items indispensable to survival remaining regulated on the basis of public safety – basic water, food and health care supplies/medication; goods created for the military or police services, and items used by emergency services.
Capitalism has been incredibly successful for three hundred years, particularly to this Island which used currency as a method of encouraging innovation; greed is an extremely powerful motivational tool.
The fundamental dilemma with capitalism is that where wealth should be in continuous motion, business and individuals have reached the point where their income has reached stagnation. They cannot possible enter their profits back into society or their business quick enough. Some of the top earners are simply greedy, with no care for the needs of society.
If the top 100 earners on Earth invested their stagnated earnings back into the world, then world poverty would have been ended several times over; we’d have enough finance to end cancer and much disease, and we’d be having arguments over politics on Mars!
I see free-market economics as a way of preventing this from occurring. When customers and employees have so much power of business, it is fair to say that business will do the right thing, even if it is for the wrong reason. Starbucks is the prime example; the people of Britain simply stopped buying over-priced coffee from their shops. What happened? Did they leave the country? Did they close down? No, they got to their knees and begged forgiveness despite fears that taxation would drive business away. In reality, Britain is a consumer nation – our currency is a paradise to multinational business for being ahead of both the Euro and the Dollar. We need to take advantage of this more.
Regulation frightens many businesses and increases their costs – many lawyers and legal experts are employed by the largest of companies just to avoid regulation; avoiding tax and escaping through loopholes.
We shouldn’t make it harder to trade in this country than it already is, and so long the citizens have true power of the markets (not the government, but the people) then regulations aren’t required.
Under socialistic free-market economies, all the wealth, all the money, all the resources of individuals who allow them to sit in bank accounts for tens of years, with no intentions of investment, are forced to share the profits of their fruit.
Common myths debunked
- A common argument is that markets would not provide high quality goods or services to consumers.
Why is this false?
Imagine you are a customer, and you buy, for example, a laptop computer from company A. That computer breaks within a week; your partner has also bought a mobile phone from company A; the mobile phone lasts for 2 weeks, to the despair of the family. John Smith, your next door neighbour has also bought from company A; his items have malfunctioned within a week also. You all complain to company A, but no help is offered.
You, your neighbours, and fellow dissatisfied customers join to spread the word that company A produces poor quality items. Company B offers the same range of product for a smaller introductory price; these items are of far higher standard and soon company A is out of business due to poor business ethics.
In free-market economics, the consumer is forced to be as active in the process of transaction as the manufacturer. This is nothing new to any society – for hundreds of years, this is the essential workings of business. If a craftsman produced poor items, his local community would apply pressure to him until improvements were made. In modern consumerism, very rarely do customers take the time to actively make their dissatisfaction known. It was ‘too impolite’; the people of the nation have often had attempts to brainwash and indoctrinate via ‘politeness’, though happily this has failed, especially in Scotland where we still use curse words to greet our best friends. Free-market economics hands power directly back to the consumer; business is submissive to their clients for the very sake of survival.
- Free-Markets create slave culture by removing set-wage regulations
Prior to national minimum wage, the standard of pay was significantly higher; the problematic nature of national minimum wage is not the morality of the idea behind the system, rather the inability of the system to cope with variations In the economic climate. A system of pay forced by law gives excuse to business to pay no higher than they are legally obliged to. In older days, wages were negotiated by unions and the workers directly, and would often be increased with inflation.
Free-market economics in a socialist sense treats the employee as having a share in the company, as an alternative to being a drone to production.
- Free-market economics leads to the destruction of unions and workers’ rights
Historically this myth is unfounded. The majority of trade unions were introduced, created and succeeded in free-market Britain prior to the 1970s and the Thatcher genocide of working class dignity. For example, the Labour Party has its roots in Glasgow, Newcastle, Manchester and other Industrial towns where workers were abused. In the 1800s, the first organised strikes occurred against owners – despite the lack of any regulation to simply fire employees, the owners were forced to listen to demand as the workers had blockaded the factories and brought production – therefore profit – to a complete stop.
The essential basis of this myth forms from Thatcherite economics, masquerading as free-market economics. Free-market economics could be closely related to Marxism socialism, which I am most certain Margaret Thatcher would not have approved of. Thatcher too away the power of the working man; socialist free-markets return them in extensive amounts.
- Last but not least – free-market economics allows business to skip tax and sell apple juice as flu medicine
No! No! No!
Our tax system is broke, regulation and legislation opens up more loop holes than it closes. Count the number of companies that have avoided tax. Go on. When you return, I doubt very much you will a) find less than a handful b) not have used the services of atleast one.
When there are no regulation bodies to refer to, business can no longer fall back onto the coined phrase of ‘please refer complaints to X organisation’. You, the citizen, the consumer are in control of regulation, even if it is not written into law. Removing regulation removes the reliance on government to police business.
I do agree that several industries require regulation, pharmaceutical being one. I’ll touch on this below. Briefly, pharmaceutical industry use the same business model as any other industry – they require their product to be received well by consumes (the sick) therefore it’s in their best interest that people don’t drop dead from flu drops, and that their product actually heals.
Industries that need regulation
There are some industries that do require regulation over production, I will list them and allow you to make your own mind up:
Pharmaceutics and medical production – regulation to protect the consumer and NHS interests; prevention of placebo drugs and faulty equipment
Transport (public) – nationalisation, transport is essential to life and the movement of people is paramount to employability and civil freedoms
Mainstream media – regulation to prevent articles without foundation being broadcasted or displayed; media should no longer have such significant power of voters with scare tactics funded by private individuals
Power, gas, essential foods and water – nationalisation; these are all essential to life, and a country such as ours rich in all four commodities should not be allowed to starve
Vehicles – minimum regulation to prevent public health hazards, and to assist in environmental reform
Arms industry for both military and civil security – regulations to ensure quality of equipment for armed services, police and fire services; only government or local authority workers/agents should be charged with the duty of protecting the people, no private firms
Electronics – bare minimum regulation for safety standards
So, in closing, I’d ask you forget everything you have been taught about free-markets, they are often lies created by those too afraid to embrace the power of people over business; governments bow to business, the people do not.