Monday, December 31, 2007

#70 - Corporatism vs. Free Markets

In a comment on my newest video blog someone asked me to dismiss the myth that Corporatism and the Free Market are one and the same. People make this association feeling that a free market will create lower wages and poverty when it's quite the opposite. Right now what's hurting our country is Corporatism not a Free Market, the US hasn't seen a Free Market in almost a century at least.

We see Corporatism when legislation gets passed that benefits the Lobbyists, or Regulations that reduce competition to these large corporations in the name of protecting the consumer such as the FDA and the FCC. These undermine the most important aspects of a free market, low barriers to entry and competition which is what drives all the positive effects of a free market, leaving only the negative when Corporatism arrives.

A free market with low/no barriers to entry doesn't have the issue of Corporations with to much power, cause it's easy for everyone to create a competing firm. While one competing firm creates no threat, many will wear away at the larger corporations which prevent things like monopolys from happening while creating jobs. Monopolys only happen when the barriers to entry are raised which can only happen from government intervention. The other effect is when this competition comes into play it brings down prices and higher quality and naturally raises wages.

To restore of a free market we need to do the following:

- Abolish the welfare state (minimum wage)
- Get rid of regulatory bodies/laws (FDA, FCC)
- remove/reduce tariffs on imports/exports
- reduce taxes across the board so firms can compete, and the middle class can create new firms
- Strengthen the dollar
- Shrink the government

Even if you against a free market