cross-posted from: https://lemmy.ml/post/19046336
“Free market” ideology is based on nonsense, they’ve proven this over and over.
The theoretical model of the free market relies on perfectly rational actors acting on perfect information. If those are given, then resource allocation indeed is perfect.
Those conditions of course don’t exist in the real world, best we can do is to regulate away market failures to approach the theoretical ideal. That’s the kind of thing ordoliberalism argues for, and it can indeed work very well in practice. Random example: You want companies to use packaging with less environmental impact. You could have a packaging ministry that decides which company uses what packaging for what, creating tons of state bureaucracy – or you could say “producers, you’re now paying for the disposal of packaging yourself”. What previously was an externality for those companies suddenly appears on their balance sheet and they self-regulate to use way more cardboard, easily recyclable plastics, whatnot.
or you could say “producers, you’re now paying for the disposal of packaging yourself”
Definitely wouldn’t solve the problem as they’d just find the cheapest method of disposal to match the letter of the law and go about their day.
Corporations don’t self-regulate. They regulate the regulators. They work and then later buy the refs.
Definitely wouldn’t solve the problem as they’d just find the cheapest method of disposal to match the letter of the law and go about their day.
Those are illegal. Already were before. I’m not talking about a hypothetical, here, the policy is over 30 years old.
Corporations don’t self-regulate. They regulate the regulators. They work and then later buy the refs.
Yeah if they do that were you are then maybe elect better politicians. They sure as hell try it over here but it’s not nearly as much as an issue as e.g. in the US.
I dunno if I were in Germany I wouldn’t be so smug about electing politicians that prevent a slide into fascism.
The theoretical model of the free market relies on perfectly rational actors acting on perfect information. If those are given, then resource allocation indeed is perfect.
That’s not even remotely true. Natural monopolies exist because of how natural resources work, and oligopolies or undercutting of prices to destroy weak competition can happen with perfect knowledge by sellers and buyers.
weak competition can happen with perfect knowledge by sellers and buyers.
It can’t happen given perfect rationality as it’s not in the rational interest of the majority to allow a minority their monopolies.
It’s a fucking theoretical model. The maths check out, that’s not the issue the issue is that it’s theory, with very glaring limitations.
