The BASIS of free market principles is to do what is best for yourself and when everyone acts that way without artificially imposed impediments everyone prospers. So China as a country is embracing free-market principles by doing what's best for themselves. Your perspective on the free market is completely wrong. I suggest you subscribe to the email newsletter from www.mises.org The free-market is a natural fact of life, not an abstract theory. BTW, Thanks to gortaur & GlobalFinancier for bringing some first-hand knowledge to the debate.
Hmm... not really. In economics and politics, a free market is a controversial concept of an idealised economic system and political environment wherein exchanges are "free" of coercive measures such as tariffs, excess taxation, regulations, and restrictions âparticularly in regard to rectifying differences in labour laws. Critics of the term refer to the "free market" as an impractical ideal (ie. a "fantasy") or a political meme (ie. rhetorical device) which, disguised as 'freedom' and 'anti-protectionism', serves the purpose of politically attacking legal labor laws and other protections of the public and working classes. Critics charge that in such an environment aristocratic classes would simply leverage their wealth to impose greater economic risk upon lower classes, while being insulated from such risk by the political and economic advantages that such wealth affords. http://en.wikipedia.org/wiki/Free_market
What Is the Free Market? by Murray Rothbard The Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a news dealer for fifty cents, the news dealer and I exchange two commodities: I give up fifty cents, and the news dealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager (an agent) with the authority to hire. Both parties undertake the exchange because each expects to gain from it. Also, each will repeat the exchange next time (or refuse to) because his expectation has proved correct (or incorrect) in the recent past. Trade, or exchange, is engaged in precisely because both parties benefit; if they did not expect to gain, they would not agree to the exchange. I guess I have some editing to do on wikipedia It really is a simple concept but if you have a closed mind you'll never consider anything different from your current beliefs.
Your definition is not conceptually different from wikipedia's, they are certainly not mutually exclusive, both have nothing to do with the situation in China and the critics' point of view that it's a fantasy benefiting the rich only is also valid in both cases. PS Don't edit wikipedia please, you're too young and inexperienced for this.
I think I'll stick with the definition by an expert over a poorly written article by an anonymous high school student...or maybe you're the author and don't want anyone soiling your brilliant masterpiece. The statement that the free-market only helps the rich is pure rhetoric. Any and all "problems" in society can always be traced back to government intervention in any example you care to give. That was the main point of the original article I posted. Feel free to post here or start a new thread if you have an example of a true free-market failure. There are no completely free-market systems in existence on this planet but there are systems that more or less free. On one end you have government monopolies that represent a pure central planning market and on the other end you have highly free market systems such as the futures exchanges. The more free the market the better for everyone involved, owners, employees, & customers.
"American officials apply "Whether it's consistent with the free market" test to theirs" They do? That is news to me actually. Well when I think about it maybe you are right. The US government is a champion of free market reforms like the institution of the FED, income taxes(wich by the way are unconstitutional), social security,medicar/aid, welfare for the poor, affirmative action and other completely free market programs. Face it the US government is engaged in kyenisian socialist redistributive policies wich would banlrupt the nation. The US politicians have no idea how free market operates you could just watch how congress is grilling the oil men for the high price of gasoline. "American companies fire thousands of american workers and move to China and yet they sell their products in the US. The chinese government will never let a chinese business fire chinese, move to another country and yet continue selling their products in China. The owner of the company will probably end up in jail on treason charges" In fact many chinese factories outsource production in counries like Vietnam and yes continue to sell their products in China. If you care to look at the numbers you will see most of the FDI in the world is emerging markets to emerging markets. Probably you would prefer your T-shirt to be manugactured by an overunionized highly paid(15$/hr +) redneck. Things of course are not perfect and rosy but a complete transition from a communist economy to a capitalist one for a country with a total population of 1.3+billions would take time. Blaming free market for the mess in South America is unjust since most of the mess in the region is a result of monetary mismanagement (AKA as hyperinflation). Despite the so called free markets reforms countries like Argentina continued to borrow heavily and spend wich led to their ultimate demise. Despite this fact the countries in the region with the most open free market economies have the highest GDP per capita on the continent (Chile & Panama). While countries that once enjoyed high per capita income as free market economies saw their economic fiber desintegrate in an orgy of redistribution through taxation and inflation. The example of India(although in Asia) is very indicative of this process. After gaining its independance the country engaged in keynsian economic policies and stagnated for 30 years until the 90s when the radj and red taped began to disappear that is the moment when the economy took off. I have yet to see any example of country that has made a move toward socialism without a relative decline in its living standards.
You already asked this question and had it answered by Hydroblunt just a couple of days ago, why are you asking again. http://www.elitetrader.com/vb/showthread.php?s=&postid=981329&highlight=1910#post981329 Of course you refuse to study history, look at the imperialism age of Europe and study USA during the 1890-around 1910 as Hidroblunt recommended so no answer is going to convince you. You're going to keep repeating "government is always bad, free market is always flawless" simplistic nonsense for the rest of your life. And when the free market fails like it failed in Europe and the US 100-200 years ago or like it has just failed in South America you're going to blame anything or anybody but the free market. And when a country with virtually no economic freedom and huge government involvement in the economy like China suceeds you're still going to attribute its success to the free market. Good luck and don't forget to keep it simple - "government bad, free market good". No ifs, buts, facts or nuances, when it's really really really simple - it must be correct and must be the right solution for absolutely every nation, culture, age and situation.
"Any and all "problems" in society can always be traced back to government intervention in any example you care to give" Lets actually bother to give an example.Lets look at US economic history of the 20th century in a chronological way. 1907 banking panics. Solution institute the Fed. The Fed injects liquidity in the 20s to stop the pound from depreciating, creating the roaring twenties. 1928 the new fed chairman reins in the liquidity and starts raizing rates 1929-45 the Great Depression. The government tries to combat the depression with frenetic activity the country sinks even lower (unemplyment rate around 1941 was about 15%) while the goverment is getting bigger with programs like New Deal and social security. In the 60-70 massive monetary inflation to support the guns(vietnam & nuclear race) & butter (affirmative action, the great society etc) bankrupt the country while the currency looses most of its value. The arrival of Paul Volker at the Fed saves the day. This brings us to the 90s Fed injected liquidity in the early nineties to combat the RE asset depreciation ends up in emerging markets-> 1st peso crisis the government bails out the mexicans and speculators. Everybody assumes that the US government and the fed adopt a bail out policy-> disregard for the risk massive investments in emerging markets-> Asian crisis Russian default the Fed injects liquidity to save the day which leads to the most massive stock bubble in history. Interest rates pop up the stock bubble the result of which is a recession. Not willing to let the recession correct the malinvestments of 90s Alan Greenspan injects massive amountts of liquidity into the system and slashes interest rates to 1% creating the bigest global housing bubble in world history. Americans feeling rich go on an orgy of consumption through home equity extraction buying mostly imported cheap asian goods. Asian countries are willing to engage in vendor finance and accumulate $ reserves never to be dependant again on the IMF. 2006 the implsoion of the housing market beguins sending the economy in a recession. 2007-2008 Ben "helicopter"Bernanke calls the US air force seizing all choppers availble for a massive orchestrated money drop to prevent deflation while politicians aplaud (the US is a nation of borrowers not lenders). 2008 asians sell their $ reserves. 2009 you can buy a candy at WalMart for 20000 with the brand new 20000$ bill with Alan Greenspan on it.
"American officials apply "Whether it's consistent with the free market" test to theirs" They do? A majority of them of course. Virtually all republican and a large number of democratic politicians, Greenspan, Bernanke, Clinton, Bush, Kerry and others are free marketeers/free traders. The programs you mentioned were implemented 30-80 years ago, many free market politicians (primarily republicans) would love to cancel them all but they can't - an overwhelming majority of the country who are not libertarians believe the programs are very good and important for the nation. Probably you would prefer your T-shirt to be manugactured by an overunionized highly paid(15$/hr +) redneck. Actually I would. Whatever happened to "buy american" concept? I am sure the t-shirt would be a tad more expensive but average american wages/salaries would be significatly higher too. That's how it works, a rising tide lifts all boats, what we have now is a race to the bottom. Despite this fact the countries in the region with the most open free market economies have the highest GDP per capita on the continent (Chile & Panama). Not true, Argentina has the highest GDP per capita even though it's way behind in terms of economic freedom. http://www.heritage.org/research/features/index/countries.cfm I have yet to see any example of country that has made a move toward socialism without a relative decline in its living standards. Me neither. I have not seen any example of a country that has successfully implemented the free market model either. I've seen lots of extremely successful countries with mixed economies though. The US comes to mind.
First of all, keep reading that link doodoo. I already responded to hydroblunt. Imperialism was promoted by nation-states and has nothing to do with free-market principles. How does europeans slaughtering indigenous people and stealing their land equate to a free-market transaction? http://www2.sunysuffolk.edu/westn/imperialism.html Do you have a better source describing the free-market imperialism you speak of? And I agreed that the US before the income tax was a good example of a limited government capitalist system. However, as hydroblunt pointed out, there was rampant corruption in even the limited government that existed. Whenever you have politicians wielding unlimited power you have distortions. In any case how would you describe the 19th century US as a free-market failure? Gortaur & GlobalFinancier have already commented on the economic freedom in China with firsthand experience. I'm still waiting for a real example of a free market failure. Since you believe it doesn't work you must have at least one example.