In 1819, a new law was passed in the British Parliament. It was the Cotton Factories Regulation Act, and stipulated that employment of children under the age of nine was banned and that children aged between ten and sixteen had a limit of twelve working hours per day. There was great controversy, as opponents argued that the government was meddling with the free market. After all, if children needed to work and their parents were ok with it, why was the government interfering? It went against the free market principles.
When current restrictions on what can be sold and bought were introduced, the same principle of free market was invoked by opponents. There was a time when it was legal to manufacture and sell medicines with no supervision. It was perfectly legal to buy votes or government jobs.
In fact, our free markets are nothing but. Even in the sanctuary of free trading, the Stock Exchange, you can't just show up with some shares and start selling them. Before a company can be legally traded in the stock exchange, they must comply with strict rules and audits for a number of years. And then only registered brokers can buy or sell them.
A free market is then a market with rules and restrictions that we're just used to comply with. They have been put there, one after the other, in order to curb the natural excesses of markets left to their own devices.
Don't get me wrong. Adam Smith's invisible hand is an efficient mechanism to allocate resources and set prices. It works - up to a point. It is like a force of nature that we can use to the advantage of society as a whole. But it needs to be tamed and controlled, lest it wreaks havoc. Regulation should be a Goldilocks kind of thing: not too much, not too little. It has to be sensible and smart.
You need to understand its power and its dangers, like steam power. There is nothing sacred about it.
When current restrictions on what can be sold and bought were introduced, the same principle of free market was invoked by opponents. There was a time when it was legal to manufacture and sell medicines with no supervision. It was perfectly legal to buy votes or government jobs.
In fact, our free markets are nothing but. Even in the sanctuary of free trading, the Stock Exchange, you can't just show up with some shares and start selling them. Before a company can be legally traded in the stock exchange, they must comply with strict rules and audits for a number of years. And then only registered brokers can buy or sell them.
A free market is then a market with rules and restrictions that we're just used to comply with. They have been put there, one after the other, in order to curb the natural excesses of markets left to their own devices.
Don't get me wrong. Adam Smith's invisible hand is an efficient mechanism to allocate resources and set prices. It works - up to a point. It is like a force of nature that we can use to the advantage of society as a whole. But it needs to be tamed and controlled, lest it wreaks havoc. Regulation should be a Goldilocks kind of thing: not too much, not too little. It has to be sensible and smart.
You need to understand its power and its dangers, like steam power. There is nothing sacred about it.
1 comentario:
Realmente, después de leer tu artículo lo único que puedo añadir es que el mercado libre lo que tiene es un buen naming. Suena mejor que mercado restringido por el consenso de los poderes reales o cualquier otra expresión matizada y reveladora de sus límites.
RAFA POVO
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