3. A private company faces competition from foreign producers. The “pro-business” solution is to regulate or tax foreign products to make them more costly relative to the domestic product. The “free market” solution says “get better at what you’re doing, or relinquish the resources under your control to those who can better serve consumers.”
I’m not so sure this one fits. There isn’t just one market. This is an example of setting one market against another, and in any case our concern shouldn’t be so much about a “Free Market” as about “Capitalism.”
There is a huge difference.
A “Free Market” is in a sense free, and can move in any direction with any result. But if you recall your grade-school level economics, that’s almost invariably going to lead to monopoly. Eventually someone is going to get an edge over their competition and drive them out. Even if it’s only locally. They can use their increased profit from a local monopoly to subsidize sales elsewhere in the country, eventually driving out competition everywhere.
That’s not capitalism. Capitalism can be summed up in three words, “The Market Decides,” and where you have monopolies you have a market being controlled, dictated to.
As I always say, you have to think of Capitalism like farming. It takes work. It takes effort. A farmer doesn’t just toss out a bunch of seeds in the spring and hope they’ll be a crop come fall.
Capitalism, as any grade school child can tell you, is always in danger of self destruction. Left to it’s own devices, the two inevitable scenarios is that a Capitalist economy will eventually boil down to a single supplier (where even the various monopolies in the different market segments have been gobbled up) or price fixing, where the various suppliers simply agree to charge a set price and not compete.
Now I’ve already explained monopoly, so let me explain the price fixing. See, a monopoly depends on someone eventually gaining the upper hand, finding some advantage over their competition. But what if they don’t? Well, that leads to a scenario where everyone is cutting prices to win over the customers, and eventually nobody can make a profit. So the answer there is “Price Fixing.” Instead of everyone racing to the bottom with their profits, you all agree to a set price, presumably one that allows you to all make a decent living…
In a very real sense, these aren’t theories. We’ve had more than a century of laws & regulations aimed at one thing and one thing only: Keeping Capitalism alive. “Anti Trust” laws, for example. and, oh….
I hate to seriously piss of liberals and conservatives alike, but I’ll give you one of the most flagrant examples of anti Capitalism in America right now:
Oh, I know, you’ve all been trained to react negatively to anything that so much as smells like it’s against illegal aliens. But, labor is a commodity, just like wood, paper or anything else in a capitalist society. It doesn’t have a set value. It’s price can be no higher than the market supports. When you introduce illegal aliens you are artificially increasing the supply.
Come on, people, grade-school level economics here, Supply & Demand:
Supply goes up, demand goes down & price goes down.
Right? This is what you’ve always learned. Right?
In a capitalist society, when an employer has trouble finding employees at a given pay rate, that’s the market’s way of saying “Raise your pay.” In our society, on the other hand, people instead hired illegal aliens, often with the result of LOWER pay rates.
This is true in the top industries affected by illegal aliens: Wages have suffered.