"Yet we are also completely justified in regulating at least some aspects of a free market in order to avoid the worst outcomes (as we are already doing). The question is how often, in what circumstances, and to what extent."
Great article Philip, comparing the market with nature's system of natural selection. I am planning on article on this very topic! As for your question, to what extent should the market be regulated, I follow two overarching principles. First, the market cannot create the conditions that sustain it. That is, some regulation/ law is required; a free-for-all is not possible. Second, those regulations should be as minimally forceful and intrusive as possible, but not less. Finding that balance is difficult and probably requires making it easier for governments to undo non-functional laws and regulations.
The inherent problem with capitalism isn’t a problem unique to capitalism: it tends to augment power imbalances.
While it’s true that the market has given us so much, it has also increased the power differentials. Without going into detail at this point, that’s why even homeless people have mobile phones.
We produce more stuff, but the profits of selling that stuff allow the richest to buy up assets. The sheer amount of money chasing assets, particularly land, is such that housing is less and less affordable, while products are more affordable.
In the West, we profited from the arbitrage of globalisation while the houses we lived in got snapped up by landlords. That arbitrage is balancing out now.
Fewer people own assets now and that trend can only continue. As the increasing monopolisation of housing increases, people will only spend more and more of their income on rent.
I’m not sure there’s a policy out there that can buck this trend. It will reach a point where we all become peasants in a feudalistic world, or overthrow the whole thing. I’m not advocating for either outcome; just making a prediction.
I've been researching this same subject and I'm so relieved to see you cover it so well. Whether or not something should be more free or more regulated depends highly on what it is. Some things need to be more regulated, somethings need to be less. There is no magic wand that can apply these settings across the board.
I find evolutionary thinking to be useful in almost all domains of social science.
Matt Ridley's "The Evolution of Everything: How Ideas Emerge" makes a strong case for it.
"Yet we are also completely justified in regulating at least some aspects of a free market in order to avoid the worst outcomes (as we are already doing). The question is how often, in what circumstances, and to what extent."
Great article Philip, comparing the market with nature's system of natural selection. I am planning on article on this very topic! As for your question, to what extent should the market be regulated, I follow two overarching principles. First, the market cannot create the conditions that sustain it. That is, some regulation/ law is required; a free-for-all is not possible. Second, those regulations should be as minimally forceful and intrusive as possible, but not less. Finding that balance is difficult and probably requires making it easier for governments to undo non-functional laws and regulations.
The inherent problem with capitalism isn’t a problem unique to capitalism: it tends to augment power imbalances.
While it’s true that the market has given us so much, it has also increased the power differentials. Without going into detail at this point, that’s why even homeless people have mobile phones.
We produce more stuff, but the profits of selling that stuff allow the richest to buy up assets. The sheer amount of money chasing assets, particularly land, is such that housing is less and less affordable, while products are more affordable.
In the West, we profited from the arbitrage of globalisation while the houses we lived in got snapped up by landlords. That arbitrage is balancing out now.
Fewer people own assets now and that trend can only continue. As the increasing monopolisation of housing increases, people will only spend more and more of their income on rent.
I’m not sure there’s a policy out there that can buck this trend. It will reach a point where we all become peasants in a feudalistic world, or overthrow the whole thing. I’m not advocating for either outcome; just making a prediction.
I've been researching this same subject and I'm so relieved to see you cover it so well. Whether or not something should be more free or more regulated depends highly on what it is. Some things need to be more regulated, somethings need to be less. There is no magic wand that can apply these settings across the board.