The Free Market, Regulation, and Societal Virtue
Episode Stats
Words per Minute
136.66014
Summary
This is a continuation of the post-Net neutrality rant I did on the topic of the free market, and how it can be improved. I talk about the problems we have in the current financial markets, and why a return to a gold standard is not the answer.
Transcript
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All right guys, thank you so much for listening today.
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Now, this is going to be a follow-up to my last video on net neutrality,
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and how the FCC regulating our freedom for us is no sort of victory for anybody except the ISPs.
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Now, a lot of the comments I got on that video were suggesting that I had some sort of undue faith in the free market,
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or that this was somehow necessary to protect consumers.
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And all of this, I think it speaks to a terrible ignorance of how the free market actually operates,
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why it is that people advocate free market solutions rather than government expansions,
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and also misses the core issue of all of this, which really is morality.
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And to try and explain what I mean by that, there's a video posted by Anne Bardhart a couple of years ago.
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And to describe this woman, if there is a single paladin left on the planet, it is her.
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She was discussing the current issues that we're having in financial markets,
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and particularly targeting the gold bugs, the libertarians who want to return to a gold standard.
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Now, while I'm not the biggest fan of fractional reserve lending,
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she correctly points out that a gold standard is not going to correct all the problems we have in the current marketplace.
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We've had gold standards in the past, and when the governments wanted to behave immorally,
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and wanted to start playing fast and loose with the way money works,
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back then, instead of printing dollars, all they did was add less valuable metal to the coins.
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You know, minting coins that weren't 100% silver or gold.
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A lot of the gold out there is nothing but gold leaf around a tungsten core.
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As she points out, all of this is about morality.
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All of this is about 1 plus 1 equals 2, about not playing shell games with the way money works.
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And the exact same thing goes for excesses and abuses of the free market.
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Now, the free market has two big ways that it tends to go wrong.
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These are the things that get the most criticism.
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You see, the thing about the free market is that you enter the free market with the assumption
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Every company wants to charge the most they can,
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while providing the least that they can get away with.
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And one of the best ways to do that is to achieve a monopoly.
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Now, every business, to a certain degree, is a monopoly.
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For instance, if you go to a convenience store, they have a local monopoly.
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Nobody else can come into that convenience store and try and sell Gatorade at a lower price than them.
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You'd have to walk two blocks out of your way to go to a cheaper convenience store,
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Now, the problem with monopoly run excessively,
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the sort of monopoly that upsets people, that people complain about,
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is when one particular company captures the entire market,
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because there's no longer any competition keeping them in check.
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bad for the consumer, and bad for the society as a whole,
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and it just helps a bunch of fat cats get even fatter.
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The other big problem with the free market is externalities.
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anything that isn't accounted for in the balance books.
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And the typical example given is a company that pollutes a whole lot,
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You know, they take all of their toxic waste and just dump it in the river,
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and it's the people downstream that have to deal with it.
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So the company makes all the profit without paying for the cleanup.
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You know, both just absolutely terrible things.
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Well, the current solution is bring in government regulation.
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So we have antitrust laws to break up large corporations and say,
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no, you can't do that, you're limiting competition,
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we're going to chop you up and prevent you from doing that,
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and find you money to ensure that the consumer is protected.
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The other solution is regulation for environmentalism, etc.,
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to make sure there are no negative externalities.
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And don't these seem like great things on the surface?
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You know, any time some fat cat, some wealthy multi-billionaire
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gets out of line and starts telling us, the consumer, what we have to buy,
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we're going to get the government to protect us.
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You know, and hey, I'm the first one to say it.
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The free market is full of people that just want your money.
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They want to charge as much as they can and provide as little as possible.
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But what happens when we start asking the government to protect us from these people?
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Well, the first thing is that the government expands.
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or the ones enforcing environmental regulations,
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See, the government is really just in the business of power.
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When you expand the government as much as we have now,
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suddenly there's a lot of power being held by these government ministers.
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And so, these very organizations that were supposed to protect you
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that the corporations now hire lobbyists to go address.
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which is far less accountable than the free market.
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Well, that's because there's no accountability mechanism
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You see, private corporations ultimately have a bottom line.
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Private corporations have an incentive to trim the fat.
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does not have any checks or balances, ultimately.
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The votes are largely determined by demographics,
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For instance, if you live anywhere in the Midwest,
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both sides, both the Democrats and Republicans,
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And it's completely messing with the price of food
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It's certainly not good for your average American,
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But some people are making a lot of money off of it,
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The same thing goes for all these regulatory agencies.