[MD] Capitalism and "the free market" was: (redux ad nauseum)

[Stella Lindblom]

Den 2006-10-24 00:05:01 skrev Platt Holden <pholden at davtv.com>:

>> What I would be
>> interested in, is to deepen the analysis and together with witted minds
>> examine this field.
>
> Let us examine the field together.

Ok. This field is huge, so I want to start examining the gate. "Free  
market". Definitions. I think we'll slam dunk into the ditch immediately  
if we don't start with the definitions. If we can agree on those, there is  
a chance that this might turn into a fruitful discussion.

>> English isn't my native language,
>
> Your English seems perfect. Not to worry.

But I DO worry. From experience. Be adviced that we are NOT equals in  
this. Language-wise at least.

I have read extensively about different ways to look at Economics. Not by  
a school curriculum, but privately. Even so, a few years ago I met a  
professor who was engulfed in a three year university program called  
Ecological Economics. After a lunch of talks I asked him if he thought  
that this program was something for me, and he responded that the only  
role he could see for me was as a lecturer there. So, I entertain a view  
about myself that I am not totally uninformed.

Definitions. "Free market". I have this idea that I shall go back to all  
the roots; Smith, Ricardo, Chydenius etc. A few years ago, at a university  
course in Political science, I had the opportunity to read Adam Smith's  
Wealth of Nations and write a paper about it. It was... educational. You  
know, "the invisible hand". That is perceived throughout most of economics  
litterature as Smith's foremost thesis - "the free market as guided by an  
invisible hand". It was not his main thesis. At all. It was put in as a  
kind of a clarification somewhere on page 376. His main thesis was  
something very different from what he is remembered for. Tantamount to the  
direct opposite from what he is remembered for...

So, to start at the beginning; the free market as defined by Adam Smith in  
1776, was a place where all individuals had access. All individuals were  
living in the small town where the market was, or in the close vicinity.  
The central idea being that everybody had access to information about the  
retailers, their goods and their moral behaviour. As a buyer, I could make  
an informed decision. Smith described the over-seas trade as an  
abomination because the rich people owning the ships to go to China and  
Indonesia etc, didn't trade on equal terms. Their trading was a kind of  
raging and roguing, argued Smith, and something that was merely ok because  
it was so marginal to the trade at home. For Smith, business and trade  
didn't function well without a palpable degree of Moral. Smith even  
claims, quite frankly and on several occasions, that it is immoral to make  
money out of money. His description of a future economic hell looks very  
much like the situation we have today. Even so, he is used as a kind of a  
holy saint in the economics sphere today, and I'm sure he's turning at  
several mph in his grave.

The definitions of a free market in many books today (there isn't one  
Definition, but it differs slightly from author to author) still has the  
same base as Smith's free market, but when scrutinizing the definition,  
it's interesting to see on how many points the "market" today veers off  
 from the definition and how the lack of closeness in business  
relationships makes it very hard to maintain the "well informed-ness" and  
"accessibility" to the market. We have 1) definitions of a free market,  
then we have 2) the live thing we call the free market, and then 3) there  
are several economic theories and practices, one of which is called  
Capitalism. That is the picture that has painted itself before mine eyes  
during the last 15 years. I bet that isn't how any of you perceive it,  
though.

And that's more or less all I'm going to say on this subject so far.

Just a very short digression to Pirsig. (I left his definition of the free  
market below.) How deep did Pirsig delve in his thought to come to this  
conclusion? From my perspective the free market is a part of something we  
call Economics. And Economics is just one way of dealing with values, but  
far from the only, or the most inclusive way. Values are something that  
has to do with what we perceive as Quality, so in this respect "the free  
market" could be explained from all of Pirsigs levels, even though he  
himself didn't do it, at least not in this excerpt from Lila. As a next  
thing to examine, it would be interesting to go in the other dirction;  
what is NOT values and Quality, and why do we use a symbolic (static)  
pattern (Economics) to value some things, but not others? I will not say  
anything more of it now, just leave it as some kind of sign of where I  
would like the discussion to lead, eventually.

I hope for decent and balanced answers, something that Arlo said I could  
as well forget from the start, so please, help me prove him wrong on this  
one, heh. I want to further my knowledge, not convince anybody that I  
happen to be correct, if there is a "correct" answer to be had at all. If  
this thread turns into yelling and name-calling, I'm out of here because I  
will not put time and effort into defending myself or what I believe in.

Sincerely,
Stella


> "A free market is a Dynamic institution. What people buy and what people
> sell, in other words what people value, can never be contained by any
> intellectual formula. What makes the marketplace work is Dynamic Quality.
> The market is always changing and the direction of that change can never
> be predetermined. The Metaphysics of Quality says the free market makes
> everybody richer by preventing static economic patterns from setting in
> and stagnating economic growth. That is the reason the major capitalist
> economies of the world have done so much better since World War II than
> the major socialist economies. It is not that Victorian social economic
> patterns are more moral than socialist intellectual economic patterns.
> Quite the opposite. They are less moral as static patterns go. What makes
> the free-enterprise system superior is that the socialists, reasoning
> intelligently and objectively, have inadvertently closed the door to
> Dynamic Quality in the buying and selling of things. They closed it
> because the metaphysical structure of their objectivity never told them
> Dynamic Quality exists." (Lila, Chap. 17)