$ \def\Vec#1{\mathbf{#1}} \def\vt#1{\Vec{v}_{#1}(t)} \def\v#1{\Vec{v}_{#1}} \def\vx#1{\Vec{x}_{#1}} \def\av{\bar{\Vec{v}}} \def\vdel{\Vec{\Delta}} $

Harald Kirsch

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How Free is the Free Market

There is lots of theory about the "Free Market" and how it optimizes certain things. What it optimizes exactly can be read in good books about economy. The one thing though, that should be kept in mind is that there is no free market in the theoretical sense and, even more, the "free" should not be overinterpreted.

What does the "free" in "Free Market" mean exactly. Sure the books have good definitions. But often those definitions are not used on public debate. Rather some proponents pretend "free" means that a particular rule or regulation under discussion makes it non-free, the subtext being that any rule is bad.

Consider this for a second: every rule is bad because it makes the market non-free. Ehem, so the rule that you shall not torch your competitors factory or just shoot his top engineer is bad. Seriously? Or is that not a rule for some reason?

On the other end of the spectrum there might be a rule that a cup of coffee, 0.2l, no sugar, no milk has to have 33°C when sold and costs, tax included, 1.33€. No doubt we should have serious doubts whether such a rule make sense at all.

The point is: there are rules and regulations in the market. Whether and when you call it "Free Market" in the public discussion — as opposed to a well defined scientific setting — is completely irrelevant. Each and every rule and regulations needs careful considertation and political and socio-economic discussion. Yet the argument that it makes the market less free or non-free is no argument but just unhelpful garbage.