Can the free market regulate itself?

Can the free market regulate itself?

no because as competitors in an industry consolidate and get larger they will either form informal cartels to artificially fix prices or they will use their economic power to drive off or buy up smaller competitors to ensure the highest possible profit margins. also, they'd cut all sorts of corners in the production and waste disposal process to keep costs down, and use all sorts of tactics to keep the workforce compoliant and paid as little as possible.

in fact, our current regulatory environment exists precisely because companies did exactly these sorts of things.

can you imagine the nightmare scenarios which would occur because guys with spreadsheets and bonuses dependent on demonstrating how they decreased costs and/or increased profits as no regulatory oversight?

If all in the free market refuse all control methods then yes.

However that is not the case as men will abuse control methods and become the regulators of the free market, henceforth making the market a slave of that man or group of men. A free market is like a slave awaiting a master, the morally upright say he is free and leave him be, the enterprising take him for themselves.

b-but muh invisible hand...the market is always right isn't it?

The market is an entity made up of people, their wants, and their needs. It is an entity not seperated by anything more than name from the people who make it up.

The invisible hand is a meme.

No. A 100% free market will always tend towards a monopoly or cartel, unless competition is artificially maintained. It's in societies best interest that competition between companies is maintained, but competition is not in companies best interest. They will attempt to create a monopoly or cartel were they can artificially inflate prices and control the market. Over a function of time, some of them are determined to succeed.

>The invisible hand is a meme.

That's like saying evolution is a meme.

Yes. Due to market forces people would favor reputable businesses and use services that solve the problems mentions. If they didn't then apparently a simple marketplace where peasants come to sell their produce would become horrendously corrupt and collapse in a few hours, this doesn't happen in real life.

The state can't control the elite. Democracy gives ordinary people some power, but the elite will always have the advantage in politics through bribery and corruption. The free market on the other hand is effectively neutral, it can't tax the rich, but the rich can't force you to do anything either, you can start a business to undercut the cartel or start a union (a labor cartel) without interference, you can get anything you want on the black market and evade the taxes big businesses pay at the small risk of being defrauded (unlikely if the business runs on repeat trades with many customers), this is why they are eager to stop it.

theoretically yes. It doesn't tho.
3 year olds can theoretically manage themselves too

there is a theory that this can only happen if big business has contact to the law makers whcih can implement barriers for new competitors. with these barriers in charge new businesses cant be implemented without tremendous costs... this only holds for industries which aren´t natural monopols.

> A 100% free market will always tend towards a monopoly or cartel
citation needed

yes it could, but as long as a state exists, business people will try to influnence law makers to get additional rents..
inb4 muh anarcho capitalist
buuuut without a state there would be no capitalism and no free market,
theeeerefore no the free market can´t regulatre itself because people are greedy, but with some sort of robot government which cant be influences by people it could work..
maybe a robot dictator or something like that

Its like you dont understand the Identity Crisis and assume all things named different are different and seperated in nature

b-b-but muh government needed stimulus....

No, the free market has some self-regulating tendencies, making it useful, but it not fully self-regulating. People who argue people will vote with their dollar are being silly, and don't understand the tactic of divide and conquer. Voting with your dollar only works when you collectivize and shift the balance of power.

Off the top of my head

Imperfect knowledge. This one is obvious, but people can be lied to or misled. People are finite and limited.

Externalities, some proponents of a free market might say that externalities make a market not free as a matter of semantics, but then voice an opinion that would defang any attempt to regulate externalities. They'll resort to silly ideas like it violates contractual consent or NAP.

Capital tends to accumulate and concentrate. Some people might argue about creative destruction, but it's not always the case that the effect is enough to keep capital from accumulating in one place. If you can diversify enough, or buy out upstarts, you can absorb their growth potential or not be damaged by them. When it comes to pure finance institutions, rather than a factory of widget, they are much more insulated from creative destruction. The poorest people often have no means of accumulating capital either, to spur on competition and creative destruction.

Market manipulation, this is always the government. Private entities have many tools at their disposal to manipulate both supply and demand sides. Common examples are taking losses to bankrupt competition and marketing.

Mergers, you don't even need to play game theory if an industry is optimized for a small number of firms with large economies of scale. A merger is a win-win for both firms if it means a monopoly because they'll get monopoly profits, but a loss for consumers. And the problem is any potential competitor who might step in to compete won't see those monopoly profits, they'll only see competitive profits. Competitive profits may have a below average ROI.

The market is mostly self-regulating. What it cannot deal with however is environmental destruction and the tragedy of the commons.

cont.

There's also the general effect of barriers, which can sometimes be artificial. Things simply aren't that fungible and able to compete. There are things that prevent people from competing. The larger the barriers, the less people have to compete.

There's also the issue of perverse incentives. The market working well works on the fact that people are rewarded for giving people what they want. But reality often plays out differently. People are often rewarded for screwing people over, and no, that's not because of government regulation and what not. Reputation doesn't work if you convince the people you screw over that you're actually helping them. We've all seen idiots who were scammed, but they still think whatever they bought into is the best thing ever.

Yes, of course it can but the product of that probably wouldn't be a good place to live ie. Corporate Feudalism.

Yes, through death, violence and turmoil.

yes

you know your post contributes nothing, right?

yes

A 100% free market is as much of a fantasy as a perfect utopian Communist society.

In theory, it works. In reality, capitalism breaks itself.