Monday, December 29, 2008
Quote of Note: Tom Friedman
There is no such thing as a free market, no more than there is a farm or a garden that grows without fertilizer, without proper plowing, without intelligence brought into it. Markets are shaped by rules, incentives and disincentives . . .Tom "Flat, Hot and Crowded" Friedman in Scientific American, December 2008 [source].
Technorati Tags: Markets
Comments:
It pains me greatly to see you repeat crackpot economic statements like "There is no such thing as a free market". GREATLY. Really, David, only cranks and loons say things like that. Economists know that free markets need rules -- and that they'll develop their own if none are imposed on them. Non-economists think that a "free market" is a free-for-all, but that's just not the case. Yes, I realize that Tom Friedman is a respected journalist, but anybody -- no matter how smart or expert in their field -- is liable to saying silly things when they get out of their field of expertise.
You don't have to believe me. Go ask any economist which is more important to the study of economics: absolute values or relative values. Every one of them will tell you that it's relative values. So what matters is not whether a market has any rules or not, but whether the participants in a market do better if there are more rules or fewer rules, or whether rules are created within the market or imposed from outside the market.
It's not the absolute level of freedom in a market that matters. It's whether people do better with more or less free markets.
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You don't have to believe me. Go ask any economist which is more important to the study of economics: absolute values or relative values. Every one of them will tell you that it's relative values. So what matters is not whether a market has any rules or not, but whether the participants in a market do better if there are more rules or fewer rules, or whether rules are created within the market or imposed from outside the market.
It's not the absolute level of freedom in a market that matters. It's whether people do better with more or less free markets.
