Dec
07

Q&A: How do you monitor the “Free Market” to contain fraud?

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Question by Big Brodie: How do you monitor the “Free Market” to contain fraud?
The conservative argument is to dismantle the federal and state governments so that they don’t have to pay taxes or be held accountable for wrongful acts.

Let’s get hypothetical, and give them what they want a pure unregulated free market economic system. No Federal Reserve Bank, no Securities Exchange Commission, no bank examiners, no farm subsidies, no Small Business Administration with government backed grants and loans, no Federal Trade Commission or other government consumer protection agencies.

How do you keep larger corporations from crushing small businesses and family farms? Eventually there would be one super corporation controlling each major industry. More importantly that super corporation may not be an American company. Is it a “free market” when there are only four or five conglomerates that control all commerce?

How do you hold corporations responsible for their employees and the communities where they reside. Should we applaud these companies when they cast aside American workers, including middle and upper level professionals, in favor of foreign workers that are better educated and will work for far less? Remember there’s no government to interfere by created laws forcing them to hire American workers or impose pecuniary penalties to dissuade them from hiring foreign workers.

Consider this, slave labor means more profit so the walls, trenches, and moats on the border with Mexico have to come down.

Here is probably the most important issue what protection would consumers have if corporations or individuals, in a fit of greed, preyed upon those consumers fraudulently or commit environmental damage destroying the health of a community. As in the case of EMRON or the Love Canal in Western, NY. There would be no EPA to champion the cause of those who would be injured by environmental damage.

Another issue is what about indebtedness? Theoretically in a free market goods and services go for a certain price and if the consumer cannot afford it those goods and services will not sell until the price drops to a point where the consumer is willing to buy. Credit allows consumers to purchase goods and services at the inflated prices until the debt is eventually called and when the consumer can’t pay it you have a collapse of the whole house of cards. At that point the consumer can’t purchase at any price until the debt is satisfied.

Given these factors is a pure free market realistic? Intelligent answers instead of rants would be appreciated.

Best answer:

Answer by Roger M
wow way too long to read

Free markets work. Regulated markets don’t.

You will agree once you grow up and make more than $ 20 an hour.

What do you think? Answer below!

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Comments

  1. Captain Awesome [Backup] says:

    You punish fraud, but you don’t regulate.

  2. Uncle Pennybags says:

    I would make a correction to your thought train here. You ignore the role of contracts, lawsuits and the courts. Courts are government entities and can hold corporations responsible for damages done. Both for employee contract violations and for actual damages done like pollution.

    And why would corporations be immune from fraud charges? Free Market doesn’t mean that the corps can commit crimes at their whim and get away scot free.

    As for outsourcing of labor or importing of cheap labor, we have that now in our very heavily regulated environment, as well as illegal immigration. Can the free market do any worse?

    Truth be known, I think it is appropriate for business to outsource. Why pay some guy who never graduated high school $ 25 per hour + benefits to stamp out some part on an assembly line, when some Chinese guy will do it for $ 2 per hour with no benefits? It is up to us Americans to make sure we bring a higher value and thus earn those higher wages.

    Free Market has nothing to do with deciding immigration policy. In a pure free market, gov’t and business are separate, thus no interference by business to coax gov’t to allow illegal immigration.

    As for debt, with no hope of government bailouts nor pressure from the gov’t to lend to deadbeats, one would hope that creditors would extend credit to only those who are credit worthy. Those that make risky loans would either build large reserves to hedge that, or eventually pay the price by going under.

  3. DAR says:

    There is a lot there, too much to answer at one lump, however, most monopolies have governmental preferences, such as oil subsidies, and agricultural subsidies that go to agribusiness at the COST of family farms, or regulatory barriers to entry to competitors. Family farms can’t afford to comply on their profit margin with the masses of regulation. They create monopoly for those large enough that they can. Those who grow large by actually building a better mousetrap shouldn’t be punished, but they are really rare.

    Fraud would be monitored by the individuals involved and by states. People would bring action or make complaints based on violation of law and contract, and fraud. Enron, for all its huge scandal was prosecuted on common law state fraud claims. That is how it should be.

    EPA doesn’t champion anyone. Get government out of the way of private property owners getting true damages for polution from polluters, and you will see much less pollution.

    Foreign workers are being hired abroad because of NAFTA< CAFTA and other MANAGED trade agreements. Those reserve all profit to multinational special interests and away from individuals and small business which have no hope of competing. Get rid of them. Free trade doesn't require tens of thousands of pages of regulations. It only requires low tarrifs. Then WE can trade, as well.

  4. StoneCold says:

    By doing what some old German pensioners did. Only don’t get caught.

    Pensioners torture financial adviser

    “A financial adviser has barely escaped with his life after being beaten and held hostage for four days by a gang of old-age pensioners.

    American James Amburn was beaten until his ribs broke, burnt with cigarettes and hit with a Zimmer frame by the gang of five pensioners furious that he’d lost their £2 million ($ 4.1 million) savings.

    Living in Germany, Mr Amburn was ambushed as he left a cafe and driven in the boot of an Audi to a house, where he was dumped in a cellar.

    “I was jumped from the rear and struck,” he told UK tabloid The Sun.

    “Then they bound me like a mummy with masking tape. It took them quite a while because they ran out of breath.”

    In four days, the pensioners fed him just two bowls of soup, burned him with cigarettes and threatened to kill him “again and again”, angry that he had invested their money in a failed Florida property scheme.

    He escaped once but was recaptured and beaten until his ribs broke.

    Mr Amburn was eventually rescued after convincing his captors to let him fax a Swiss bank in an attempt to get their money.

    He left a note for police at the bottom of the fax and armed cops stormed the house in Bavaria on Saturday.

    The “Furious Five” as they have been dubbed, face 15-year sentences for hostage-taking and torture.”

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