Free markets vs. Capitalism and Mercantilism


The Free Market Rebellion is on!
I'm seeing more and more articles that I would file under Free Market. And it's dawning on me that this political struggle and this financial crisis is defined by who's going to control the economy.

Free market advocates like me will tell you that the solution is less law and less regulation and a very restrained government.

Everyone will tell you that government should be more involved, either by direct control or by "encouraging" the right companies at the right time.

But the facts don't support either of those cases.

Detroiters continue to embarrass themselves by placing the auto industry collapse into an us-versus-them framework. In the midst of all the whining and begging for a bailout, the South has been declared the new enemy, along with the foreign-car manufacturers who are producing cars — in Southern plants — that consumers want to buy. The army of politicians and opinion columnists in Michigan who lay the groundwork for resuscitating this fading industry don't bother to acknowledge that it is in the best interests of any public company to maximize quality for its customers and efficiency of production and profits for its shareholders.

Instead, Toyota and Honda are pegged as evil because they are thriving. They are especially evil for building plants that aren't located near Detroit. However, it is important to remember that foreign auto manufacturers are able to build plants where they want to build them, according to what fits best into their strategic plans and potential for profit. The US automakers have UAW officials making those decisions for them for the sole purpose of enriching the union's overpaid officers and dues-paying members.

Moreover, the whole South is considered evil for luring foreign plants into the region. Sure, the massive subsidies granted to foreign automakers to lure them to the South are the quintessence of corporate welfare. But no country, no state, no region, is immune to such politics. Michigan does the same to lure high-tech companies to the state, and most recently, it offered huge incentives to Volkswagen to build a new plant in the state. The game is played the same everywhere.

Here's the real telling paragraph. Emphasis added.

The free-market method would be to allow for a business environment that would be ideal for businesses to thrive (no taxes or stifling regulations); thereby encouraging companies to relocate to low-cost states on a mutually cooperative basis. This would engender competition among states that would drive down all costs everywhere. But that would mean that the people in power — the politicians and government planners — would become less influential and less wealthy; it is for that reason the free market has not prevailed.

I can't stress that enough. Not only is government using this to take YOUR freedom away, but even when things "work" the way that government types say it should, it results in you paying higher prices.

That's BEFORE they pick your pocket to pay for a "bailout."

— NeoWayland

Posted: Wed - December 31, 2008 at 02:23 PM  Tag


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