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From: orb@whuxl.UUCP (SEVENER)
Newsgroups: net.politics
Subject: Re: Inflation in a Free Economy?  (Nota bene, Baba!)
Message-ID: <443@whuxl.UUCP>
Date: Tue, 22-Jan-85 13:00:21 EST
Article-I.D.: whuxl.443
Posted: Tue Jan 22 13:00:21 1985
Date-Received: Wed, 23-Jan-85 07:34:25 EST
References: <756@ratex.UUCP>
Distribution: net
Organization: Bell Labs
Lines: 45

> From the magician economist:
> 
>      I wrote the above in response to the mocking disbelief with which some
> met the claim that there would be no inflation in a Libertarian country.  These
> people displayed their wholesale ignorance of economics.  It is incredible that
> such people pontificate about something of which they know almost nothing.  And
> it's incredible that they choose to be ignorant in the first place, for two
> reasons.  First, some understanding of economics is important for an
> understanding of the world around us.  Secondly, these people undoubtably vote,
> which is to say, they sit in judgment of the individuals and institutions which
> make up the economy. 
> 
>                                         Daniel Kian Mc Kiernan

It is hardly new to claim that in the theoretically perfect conditions of
a totally free market, that all would be wonderful.  So the question is
1)how come it's not?
2)how does Mr. Mc Kiernan intend to achieve a totally free market economy,
  one with no distortions of industrial monopoly power, local monopoly
  power, etc.?
3)is such a condition consistent with the current large concentrations of
  wealth in the hands of a few? For example, earlier I pointed out that
  economists who study development have concluded that a successful
  agricultural system is more likely with many small independent farmers.
  This of course promotes the underlying conditions which are necessary for
  free market efficiency (many small producers, no one of which can
  greatly affect either price or supply)
  But then how does one bring this condition about in a country like
  Nicaragua under Somoza in which one family owns 70% of the land?
  Does one hold property rights absolutely inviolate or does one
  redistribute such economic control?
Could persistent inflation and unemployment have anything to do with
the fact that our current economy is dominated by relatively few
oligopolistic corporations?  Under conditions of oligopoly the assumption
that prices are related to "true" value (whatever that is anyway?????)
is no longer valid.  The government did nothing to make sure that there
were only 4 major auto companies in the US.  They accomplish such
market control all by themselves.  How did that happen? And why?
Such conditions in which 3 or 4 firms control a majority of the market is
true in many industries in the US.  And the number controlled in this
way grows every day.  
 
I praise Mr. Mc Kiernan's lucid exposition of monetarism and laissez faire.
However, this is the real world in which oligopoly power grows daily....
   tim sevener   whuxl!orb