>The free market ruthlessly punishes businesses that do not meet consumer demands.
True. But only as ruthlessly as the market approaches the free market ideal (readily available and accurate information on products, other users, choice at time of purchase etc). And we know there are no true free markets and that markets can drift far from the ideal even absent of government interference.
Who is the first to try out a newly released epipen?
>Only through government interference are substandard businesses sustained.
Now THAT is a very strong statement. Information asymmetry that has nothing to do with government is one category of ways a sub-standard business can thrive. Are we to believe that information asymmetry is all rooted in government interference?
> Profits are the signal that a business is doing something right.
Most of the time. An abundance of sustained profits is also a signal that the business is doing something wrong (or taking advantage of a market failure of some kind) or competitors would be jumping in and eating away at them.
> markets can drift far from the ideal even absent of government interference
But only government interference can lock the market in that state in perpetuity, eliminating the corrective forces of price and competition.
> Are we to believe that information asymmetry is all rooted in government interference?
Of course not. But businesses that are able to satisfy more consumers through better transparency are going to win market share and increase profits.
Asymmetry exists in most business situations though. That's the whole point of specialization in the economy: some people have greater knowledge, skill, or training in a certain area and are able to provide more value to the consumer. It is worthwhile for the consumer to trade money in exchange for the specialized service rather than spending years to learn that craft to perform the service herself.
The cornerstone of the free market is satisfying consumer demand. Firms that fail to do so are destroyed quickly and effectively when the consumer stops purchasing their product.
> abundance of sustained profits is also a signal that the business is doing something wrong
>But only government interference can lock the market in that state in perpetuity, eliminating the corrective forces of price and competition.
Again a very strong statement with only faith that government is bad to back it up. Market power can become dominant in such a way that it can lock market distortions in as well. See: monopoly
>But businesses that are able to satisfy more consumers through better transparency are going to win market share and increase profits.
What about businesses that poison the environment in secret? This is also an information asymmetry that can exist that will earn greater profits right up until they are caught, if that day ever comes. I was using information asymmetry as one unavoidable aspect of pure markets that can lead to severe distortions completely apart from any kind of government interference since you asserted that only the government can sustain negative market distortions.
>> abundance of sustained profits is also a signal that the business is doing something wrong
>What? Please explain.
If there is a great profit being made in a theoretical market approaching perfection then theory says competitors will enter that market, chipping away at that enormous profit until it is at a level that is still profitable but only so much as it is not worth it to further competitors to enter that market to capture even more. In other words, in a well functioning market profits tend toward (but never reach) zero.
If this is true then an abundant profit sustained over time is an aberration and evidence that the business is doing something wrong in terms of the health of the market (threatening or buying off potential competitors, for example).
Please. Even in the classic case of Standard Oil, they lost massive amounts of market share even before the government started interfering in their business.
According to Wikipedia:
In 1904, Standard controlled 91 percent of production and
85 percent of final sales. [...] Due to competition from
other firms, their market share had gradually eroded to 70
percent by 1906 which was the year when the antitrust case
was filed against Standard, and down to 64 percent by 1911
when Standard was ordered broken up and at least 147 refining
companies were competing with Standard including Gulf, Texaco,
and Shell. It did not try to monopolize the exploration and
pumping of oil (its share in 1911 was 11 percent).
So when the "white knight" trust busters of government finally got their way, Standard was down to 64% market share. Hardly a monopoly at that point.
> What about businesses that poison the environment in secret?
If we had property in the air and water, then if business harms your property, you have recourse against them. As it stands, the air and water are unowned, which means that they are a permanent tragedy of the commons.
As to your ideas about perfect market competition, etc: real markets are dynamic and vibrant, with new technology disrupting old ways of doing business and new consumer preferences forcing business to adjust. That's fine if some theoretical market theory says in equilibrium, profits tend toward zero, but we live in the real world, so that will never be the case with free markets.
So, the free market where it fits your narrative of the evils of intervention and real markets where your free market narrative breaks down. If you follow your last real market argument a little further, you'll find my positions.
True. But only as ruthlessly as the market approaches the free market ideal (readily available and accurate information on products, other users, choice at time of purchase etc). And we know there are no true free markets and that markets can drift far from the ideal even absent of government interference.
Who is the first to try out a newly released epipen?
>Only through government interference are substandard businesses sustained.
Now THAT is a very strong statement. Information asymmetry that has nothing to do with government is one category of ways a sub-standard business can thrive. Are we to believe that information asymmetry is all rooted in government interference?
> Profits are the signal that a business is doing something right.
Most of the time. An abundance of sustained profits is also a signal that the business is doing something wrong (or taking advantage of a market failure of some kind) or competitors would be jumping in and eating away at them.