Let me tell you about Chelsea.

My roommate Ed and I were scrounging an Austin alleyway back in 1971 looking for the wooden fruit crates the supermarket had been throwing out in volume recently. I heard a whimper from behind a dumpster.

There was a young female fox terrier lying unmoving in obviously very poor shape. We wanted to save her and took her home. Ed phoned an old girlfriend who worked for a vet. She got a significant discount on vet costs, like half.

She phoned back with the prognosis. It wasn’t good. Sepsis had set in thanks to the litter of stillborn pups still in her, pregnant despite being only 11 months old. That and she had three types of parasitic worms—heart, gut and liver as I recall. Worse, the necessary drugs would interact complexly and might kill her. The vet had strongly recommended putting her down. If she wanted to proceed, he had told her he would charge only $500.

GULP! $500 then is $3,775 now!! It was literally four-months’ rent on our house not far from campus.

We said proceed.

A couple of weeks later, she brought Chelsea back to us, but what a wreck! She was afraid of her own shadow. Ed would lean over her and say, CHEL-SEA, and she would roll on her back and send up a geyser of pee. We started a confidence-building program, the heart of which was “kitty patrol,” having her ride shotgun in our pickups (we were carpenters as well as college students) and siccing her on any cats we saw roaming. She would not have hurt them, but she slowly got better and better at treeing them.

About a year later I was taking a T-corner in my truck and saw the cat in the yard ahead just as I saw Chelsea’s tail disappear out the passenger window. She rolled about eight times, hit the curb and came up running. That cat wanted no part of this dog and was instantly up the nearest tree. Chelsea turned and trotted jauntily back to the truck. She was completely cured!

We were also taking her to campus with us, with whoever left first by 10-speed. As much running as she did, she was sleek and strong. We noticed that even when she left with Ed, she might show up at one of my classes when it was over (and vice-versa). How in the world did she know?

Back in these hippy days, there’d be as many as two-dozen dogs on campus, and Chelsea would get them all going playing chase with her always “it.” Even though the chase team often included a whippet and always comprised dogs much speedier than her, her ability to dash under benches and navigate obstacles made her hard to catch.

Sometimes when I’d call her name and she’d come running, a fellow student nearby would inquire, “Oh, do you know Chelsea?”

“Yes, she’s my dog.”

“Really? I heard she belonged to _________,” And the name would always be the student body president, a popular professor or some other familiar figure.

In the 1974 Cactus yearbook, there were 17 pictures of Chelsea, including a full-page mezzotint section divider and 0 of me. It just goes to show that if you go to the trouble to kill the parasites, eliminate the infection, get rid of the interconnected complicating factors and resolve the complexities, life can be amazing!

I don’t think so, but the time to address that question is when we have gotten rid of the obviously perverse, evil and destructive violence against innocents. Once we’ve addressed secret and militarized police, mass incarceration, torture and assassination, illegitimate police violence, foreign military adventures, the war on drugs, mass spying, bombing faraway innocent civilians in hopes of encouraging political change and a few other things, we can discuss whether some much smaller level of violence against innocents is necessary to maintain your preferred society.

Worrying about whether a perfectly libertarian society is possible shouldn’t get in the way of eliminating the clearly bad oppression that in no way helps regulate society.

There is no carbon credit market without government intervention to create that market in the first place.

There is no market for intellectual property without government intervention to create that market in the first place.
Without a capitalist government that issues the patents and trademarks and copyrights, and recognizes them, and enforces them, going around persecuting people who share, calling them pirates and so on…
That whole market, with its royalties and licensing deals and so on, would just not exist.

Even seeking to earn rent from land, depends on government issued titles over that land, cadastral registries and maps, government backed evictions, and so on.

Corporations and trusts and limited liability companies and all that, also depend on governments to exist and legitimize them, turning these fictional entities into legal ones.

Having a national currency, and laws about prices that have to be displayed, and labelling laws, and so on? Also all government intervention.

Even black markets are not free from government intervention, they rely on government intervention to take out most of the competition, thus keeping prices high.

There is no such thing as a market free from government intervention, somehow existing outside the law. It’s a complete fantasy.

You hire contractors to build a house. They build the house, but you do not think they did a good enough job to justify their pay and get into a dispute with them. Your attempts at resolving this dispute fail and you cannot agree on a remedy.

What happens now?

It’s hard to see how free markets are possible in large economies without governments enforcing contracts and resolving disputes. The only place I can think of where government’s don’t play this role is in black markets. However, black markets are filled with criminal elements that make implicit and explicit threats to keep out competitors, so it’s hard to claim they are “free”.

Free markets and governments are both imperfect—There are market failures and government failures. However, when functioning properly, governments can help make free markets possible by enforcing contracts and resolving disputes.

No, and it shouldn’t even be a goal.

People should EARN income. Do you want your doctor to be paid the same as your waitress or janitor? Do you think Patrick Mahomes should be paid the same as the guy who never gets on the field? Or the guy who doesn’t even make the team?

If you work 80 hours next week, should you get the same amount of money as someone who worked 20 hours? Or no hours at all?

The goal SHOULD be that there is equal opportunity for everyone to make money. Access to education, training, and job opportunities. Access to invest one’s money in a business. it is up to you and me to take advantage of those opportunities.

Markets handle complex economic problems every day so often that you can ask this question without realizing that the answer is obvious.

And it lets socialists blame markets for not arranging everything just as they would prefer.

Say you go to the convenience store to buy a soda.

Markets handled the extremely complex problem of making sodas and soda containers so they are durable, cheap, and desirable. Markets handled distributing those sodas to places where people were most likely to want to buy them (and be able to buy them), all for a pittance. And markets took care of making sure a handy depot was near you stocked with all sorts of things you might want urgently (the convenience store).

Think about how most every product you use is created and distributed. No one understands all those processes. No one person coordinates all that production. Markets handle those extremely complex problems, allowing us all to cooperate in an amazingly complex system of production and distribution of goods and services.

Standardization of weights and measures, along with regulation requiring them and inspections to make them work.

Investments in highways, along with rules to make them work.

Fraud laws. Laws against theft. Contract laws. A police and court system to investigate and judge wrongdoers.

The SEC, which regulates the stock market. Without which people would be less willing to invest and would go somewhere else.

Anti-pollution laws, which improve the standard of living of everyone.

Safety and Health laws, which improve the health and lives of workers.

Required unemployment insurance, which helps maximize productivity.

And so on.

The list is long.

Shortages, business cycles, artificially increased inequality, people losing their means to make a living to civil asset forfeiture and eminent domain, wars, high unemployment, inflation, stagnating real wages, homelessness, high housing prices, lack of affordable housing of the type that low income workers need, jail overcrowding, more victimless laws leading to increased police engagement with citizens creating more opportunities for police brutality, including mistaken no-knock raids where innocent people get shot, decay of people’s work ethic, dependency…

The housing bubble and 2008 financial crisis are a great example. We had the Federal Reserve lower its Funds rate starting in 2001 and ending at 1% in 2003, flooding the economy with a lot of new money, and government policies specifically funneling most of that new money into the housing mortgage market.

Funny how it is mostly people who participated in doing that who blamed it all on laissez-faire capitalism.

The government doesn’t actually manage the economy, the free market already takes care of it, by and large.

The Fed tends to take steps to keep us out of recessions or even inflation by tinkering with interest rates. And a few other things. The crash of 1929 and The Great Depression taught us that you can’t imagine that financial markets are going to self-regulate. They will ride the economy to the bottom as long as they make a buck off of it. Truth.

Another truth is that, without regulations, we will have arsenic in our drinking water and drugs, substandard food. Public health crises far beyond what we have now - which isn’t much, thanks to the Gummint.

I lived in Houston when the ship channel caught on fire, now and then. Back in the day.

If you don’t tell people not to dump garbage in the public water supply people will dump garbage in the public water supply. History has taught us that this is so.

Most problems requiring coordinated action, that has a high cost individually but only produces a benefit if everyone goes along.

For example the leader of a business may believe that all businesses would have more customers if wages were higher, but if they pay higher wages it’s not enough to make an positive impact and it threatens their business.

Another case is irrational thought patterns that give people the temporary ability to overpay for something, while ending up with less in the end. If they can, competition dictates that soon they will.

A lender may believe the financial system would be more stable if loan requirements were stricter, but if they enforce that rule they lose profits while others continue to destabilize the system.

Investors buying companies may find that the typical transactions at the time put too much debt on the company and make it hard to operate well, but if they don’t do that they are outbid by others who do.

Startups that overspend may be able to tell a good story and attract big investments that let them keep overspending. This can prevent more sustainable startups from entering the market.

Some economic agents may have undue influence

A large company was once a leader in its industry. It has stopped innovating, but when competitors come up it tells retailers they will be cut off from selling its (essential) products if they give those competitors a chance to sell theirs. It uses the profits from past innovation to prevent future innovation.

Finally hidden failures can easily distort a free market

You never see ads for mutual funds that have done a lot worse than everyone else. Fund companies frequently create a lot of new funds. If they don’t do well the fund is either closed quietly or merged into one that has done better. This always gives them the opportunity to advertise funds that have a good track record, even if it was only through pure luck. Now imagine the same thing happening with airline safety.

Note that in all of these cases there are benefits in terms of wealth creation, products and services provided, and innovation. They just may not be the optimal benefits. The logic of competition, combined with our flawed psychology, makes it impossible to reach those optimal benefits until we get to a breaking point.

It’s also not a given that someone could dictate the ideal course of action ahead of time even if they had absolute power. They could very easily be wrong (see: flawed psychology) and lead to a worse outcome.

Thus it is worth intervening in the worst cases, once we know that they are a real problem. And it is worth being cautious to avoid intervening in cases that are better left alone.

The question is loaded with two implicit value judgements:

1. What is a “problem”?
2. What is “sufficient”?

In a free market more people want a Tesla than can afford one. Is that a problem?

More people might also want a life-saving drug than can afford it. Is that a problem? And is it a different kind of problem or just a variation on the Tesla problem?

Problems of this sort are gaps of some sort, gaps between some ideal vision a person has about how the economy ought to be — what products are produced, at what prices, what wage levels, etc. — and what is actually produced, or would be expected to be produced according to some theoretical model.

Economists have some skill in the second part of the above — measuring what actually happens in the economy, or creating models that predict what would happen under given circumstances. But economics alone does not answer the first part of the question — how ought the world to be? That question is answered in other disciplines, as a moral or political question. Even when economists point to theoretical models like Pareto efficiency, there is an implicit value judgement there, that the world ought to be Pareto efficient. Those assumptions are not at all self-evident. They are debatable.

So depending on your political or moral framework, there are many kinds of “problems” that a free market cannot handle “sufficiently”:

• How do you develop nuclear weapons while keeping your people in starvation? North Korea amply demonstrates that this can only be done in a non-free market.
• How can you subsidize wealthy industrial concerns with taxpayer money? In a free market there would be “insufficient” support for this, and the “problem” would not be solved.
• How can you wage an unpopular war that an “insufficient” number of people would support if they had a choice? The Vietnam War shows that a free market approach to military recruitment for unpopular wars would not solve that “problem.”

Arguably 100% of truly bad ideas are “problems” that cannot be “handled” in a “sufficient” way in a free market.

Government has a role in a free market. It defines and enforces private property rights. It investigates and prosecutes crimes such as fraud. It is available to step in when two honest people have a disagreement over what a contract actually obliges them to. It even has a role in those few places when harm is done where both those harming and those harmed cannot be sorted out in any reasonable way - things like air pollution where almost everyone contributes to it and almost everyone is harmed by it. But that’s pretty close to the very narrow gray zone between property rights and improper regulation and, as used today, often crosses well over that line.

The problems mentioned were caused by government policies and regulations, not free markets.

The land know as “the commons” were areas where free-markets - private ownership and free transfers of ownership - were not permitted either by social custom or government prohibition.

Poverty was vanishing in the U.S. at about 30% per generation until the War On Poverty, a series of government programs, was established; since then the poverty rate has had ups and downs but is generally unchanged for three generations.

The poor were productive, and working themselves out of poverty until government programs and minimum wage laws forced them to be unproductive.

Government programs caused those problems and many people were hired to deal with the problems. Not solve or end the problems but deal with them. It is not possible to deal with a problem that has been solved so, to ensure continued employment, the problems continue.

A market involves buyers, sellers, goods and services, money , contracts etc.

All the entities and the process are covered by basic laws.

If a government imposes any restrictions specifically for trade in the market then it isn't free market.

While sellers can choose not to sell and buyers can choose not to buy. Any malpractices are covered by Monopolies and Restrictive Trade Laws. This is basic law.

However, if a government imposes high taxes or ban on trade on vice products like narcotics, tobacco, alcohol or gambling it is not free market. This is a ban Or levy specifically on a type of product. Taxes are imposed to collect revenue to run a government. Unequal taxes is trying to control the demand behaviour of buyers.

A free market only means that if two or more individuals agree on an exchange, it will happen.

That does not require any relation among the individuals, not citizenship or anything else. When different societies come into contact, it’s the traders who make the first inroads. They trade without know each other’s language or culture. They quickly figure out mutually acceptable arrangements.

In fact, traders have always evaded trade restrictions based on citizenship. That’s why there are smugglers, blockade runners and black markets. There is a powerful human need to trade with all willing counterparties, and even the most ruthless governments have not succeeded in suppressing it completely.

The big word here is profit. There is no profit in curing cancer. There is no profit in basic research. There is no profit in space travel without the government paying for basic research.

And that is the crux. An unregulated market is also a static one. Yeah. You may find someone that wants no waste or to use every part of the deer, but that requires research and development costs, and that means risk. Markets are by nature risk averse. If there is no profit in it, it is cheaper to take the meat and trash the rest.

And now look at Tesla. A once great company now suffering. Why? Because of the market. Oil companies want to continue to sell oil. So, they effectively produce a bunch of anti-ev material, and anti-green energy propaganda instead of doing research into making green energy as efficient, and cleaner to produce. It is cheaper to simply spoil green energy.

That is how the market really works. Efficiency is about retaining profit, not moving the world to new realms. A free market is a good thing, but it requires some regulation to keep it from also stagnating. The question we should be asking is where does the line exist to promote competition, avoid monopolies, and encourage the market to turn it's ability to be efficient towards basic research.

No system is obligated to account for the differences in ability and need. These differences arise for a number of reasons that spring from physical disability to personal preference.

I worked as a consultant to medical firms for a number of years because I had the mistaken impression that if medical practices were run more like a "business" they would be more successful. However, I learned that practitioners who had meager or failing practices had assumptions and "values" that almost entirely explained the problem in achieving "success" from an economic standpoint. They defined "success" differently. How do you account for that!

Human suffering is a fact. It is a necessity. It is the indicator that we must do something. If we are hungry, we must find food and eat or we die. That niggle of hunger is your body saying, I NEED FUEL. These are control signals. You can't shut them down or you will forget to eat and then you die. Same with Thirst, Warmth, and the availability of air to breath. These are motivators. But, so are our emotions, and values and ideals. They all impact our outcomes.

People who are profoundly handicapped live lives of material success and some can barely live. The institutions of providing for the needs of those who cannot provide for themselves are as old as the Bible. The teaching is that there is an obligation to provide for people who cannot work in a completely self-sufficient way to still work in what ever way that they are able to survive. So, the farmer is to leave the corners of the field unharvested so that the widow and the orphan can harvest this themselves. They get the hand up of the field being plowed, tended and the grain being there, but they still must pick it or starve.

This is tough love. It is a foreign concept. Family, Church and Community work together to fill the roles of providing for the people who are distressed, and unable to cope. Family and Church insist that one try not to be a burden if at all possible, and the ideas of the Socialist state had to turn this maxim on its head making provision of sustenance a right, to create long term dependency and thus functional slavery for all who would accept it. For, no matter who is your benefactor, family, church or state, you will bow to receive their blessings, or you will be asked to leave their care. So, "abandon all dignity he who enters here."

When it is life and death, or it is not possible to live without help, this trade of dignity for an opportunity to live another day, is morally acceptable for the receiver, but it is morally reprehensible of the donor if it is continued one moment longer than is necessary to assist that individual to proceed on their own.

From the point of view of those who favor open society (in the Karl Popper (Stanford Encyclopedia of Philosophy) conception) the only "problem" is that they are a messy human affair. Vigilance is necessary, however, primarily to guard against the predations of those who favor closed society (ie, in Popper's concept of society run on the belief that those in authority obtain sufficient knowledge to run things well).

From the point of view of those who favor closed society, the problem with free markets is that they give free rein to imagination/innovation, which is disruptive. To open-society types it is welcome disruption meaning we are ever optimizing. To closed-society types it represents threats to entrenched interest. Their response then takes the form of monopolies, cartels, regulation, professional associations, lobbying and so on. No bureaucracy ever rewarded imagination. Markets do.

Someone here mentioned that medicine was an example of a sector that should not use a free-market approach. No sector is more in need of a return to using a free-market approach. I'll use medicine then to illustrate.

I recently, for a history book, got to interview a lot of physicians. All give lip service to the pride of working in a cutting-edge, rapidly evolving field. Then they start telling their war stories: "When beta-blockers came along, I lost my gastric surgeries, a third of my practice. I almost went out of business." "Colonoscopy wiped out my exploratory bowel surgeries. I had a very rough year."

In a different vein, one med-school prof told me of taking a group of med students to a free clinic where they encountered a woman whose 2-week-old newborn was failing to put on weight. Lacking any proper tools, they resorted to several clever workarounds to arrive, in ten minutes, at the conclusion that the baby had the wrong formula. The can was fetched from her car and, sure enough, she'd been given formula for one-year-olds. A follow-up later showed the baby was prospering.

The prof's final comment, "Do you know what that workup would've cost in hospital?... at least $2000."

Based on that, I started asking my interviewees whether they could conceive of clinics that paid the poor to come for regular check-ups but nevertheless turned a profit or at least broke even. Well, doctors are very here-and-now focused, but I got a few to indulge me in the exercise, and all three came to the same conclusion--by one means and another, it was doable... *theoretically*... but highly problematic. As one put it, "Do you realize how many laws you would have to change?"

"Do you realize how many laws you would have to change" to bring easily affordable healthcare to the poor? And someone claims that medicine is a field not amenable to a free-market approach!?

Charles Tips's answer to What makes the US healthcare system so expensive?

Let’s say you want to efficiently provide thousands and thousands of different goods to hundreds of millions of people with varying tastes and desires.

Say you have a choice of a few dozen or maybe a few hundred people in Washington DC making decisions on how to spend these people’s money, picking which types of cars they should own, what characteristics are desirable for their dishwashers, what type of stoves the people should buy… alternatively you could allow tens of millions of people to each develop products that will compete for the attention of the citizens, who can choose the products that most effectively and efficiently meet their varying desires and tastes… what’s going to provide the best outcome?

The role of the government is to protect society from outside threats, and to protect the lives, liberty and property of everyone in the society. A State is not necessary.

Protecting property involves several activities including prevention of theft by stealth, force, fraud, or failure to fulfill contracts. It also includes prevention of unauthorized use (such as trespass) and prevention of damage by others (pollution, destruction by fire, vandalism, etc.)

All this was explained 3 centuries ago by John Locke and some others. It is a scandal that this is not taught in government schools.

When the government limits itself to those functions (which are essential and the government must have sufficient power to perform them) a free market is what emerges.

Governments do things well that are politically profitable to do well. In a representative Republic, the politicians seek votes, and often fund projects that would otherwise not be of interest, and in some cases are useless, if and only if these politicians will get more votes because of it. There are a number of things, like education, that are done poorly by political allocation, but are continued because of strong support by factions within politics, like Teachers Unions.

There are a few things that politicians find more votes from that are also good for the nation. Defense from actual threats is one thing, and funding Armies is how Nation States evolved, because they are better at it than tribal groups, and other forms of social organization.

The first thing to consider is the effect this would have on businesses. Do you think they will give up using contracts?

There is a library at the Toronto Stock Exchange (which is normal for an exchange) and it is filled with nothing but the rules and regulations of the exchange (i.e., the legal rules). It’s not a big library but it is filled with nothing but the rules of the “free market”.

What the “free market” advocates forget to mention is that their “free markets” will exist only amongst those who cannot afford a lawyer (or even a rudimentary education in law).

PS: And it isn’t the state that “forces” exchanges to legally incorporate as entities with enormous contracts (because it’s their own idea).