Free marker, great idea. Free people trading and working with/for each other, doing their best at being excellent, with the invisible hand steering the world towards brighter future. In theory it seems the best way forward, and many advocate lifting restrictions like taxes, tariffs, government subsidies, etc, to make every participant equal in the eyes of the market and allow the market to realize its full potential. It makes sense: taxes are immoral anyway, as we all know :) Tariffs, I see the point of them, but for free global market they are obstacles. Subsidies are mostly wrong. Not sure about all of them, but general idea of "free" means not only free to prosper, but also free to fail completely.
This is all well, but usually "free market" advocates avoid the topic of distinct classes of players and games being involved in the game. See, individual craftsmen, small family-owned companies, local businesses, they are pretty much one class, for whom free market is generally the best environment. Then there are medium-sized companies, spanning entire states or countries. And then there are transnational behemoths. And then there are three basic forces... Disclaimer: I'm not an economist. I merely describe what I see and what I am aware of. Please correct me if I'm wrong.
1. Profit,
2. Competition,
3. Human factor.
Profit, the bottom line. Where is profit, people get paid, can live, company functions, thrives, develops. No profit, no life. Simple.
Competition, this is what keeps companies vigilant. What ensures that prices are not overly high, that quality matches advertisement, etc. It is the key ingredient that makes the invisible hand move its fingers. Competition's job is to ensure that if there is a better way of creating value, it will be found and put to work. It is like, in an ideal world, having an honest friend, or honorable enemy - competition is there to let you know about your weak spots, and to let you become better. And you do the same for them. In our non-ideal world... different story, but that's beside the point for now.
Human factor - that's the odd one. Working against first two. The biggest problem I see with the idea of "free" market is that it has no built-in limits to keep evil in check. Competition can act as a police force in this respect, true, but it would be enough only in an ideal world - here it's not enough. What is needed are either external regulators, like a referees on the playing field. Honesty, integrity, general good will, these are human features. The more human a company is, the better is behaves. But it is up to humans - like in football match, playing field has nothing to do with players playing fair or not. It just doesn't care, like the sun doesn't care whether is shines upon good or bad. And what is then logical, the smaller the player is, the easier it is to be nice and play fair.
Talking about small scale, individual craftsmen, more often then not I met people who valued work in itself, who were proud of doing it well, with quality, and being paid in return - but profit was never their primary concern. Not that they didn't care, but if you are good and it shows, there usually are customers willing to pay more than enough. Competition on the small scale is also not that visible, because craftsmen tend to concentrate on doing good job themselves rather than fighting their colleagues.
Medium scale, things can go either way - there are family businesses, small factories, industry facilities where there isn't enough pressure to bypass, for example, safety norms. There is enough good will and vision to go beyond sheer profit. Usually there are real people driving the company - real entrepreneurs, like for example Richard Branson, who wrote many interesting books and my impression was that this could be my role model if I ever got to the point of having my own business. It is the human factor that makes all the difference, positive as well as negative (although I'm talking about positive aspects only, opposing negative sides of profit seeking and unfair competition). I've seen and worked for small companies that dreamed of being corporations governed by the profit principle, profit defined as one number on computer screen, nothing else. They were already small-scale kingdoms, ruled with iron hand by people who were prime examples of what can become when entrepreneurship is reduced to $$$ and killing (figuratively speaking) everyone considered an obstacle.
And then there is the global scale: the biggest players are corporations, where the top-level human element is somewhat reduced and subjected to the purest form of capitalist type of thinking. You see, global corporations on the same field play different game than smaller companies. Like football vs hockey. Their only interest is making money, and how they make money is pretty much irrelevant. This is capital making more capital - what happens between investment and dividend is driven by the one and only thing: profit. Quality, safety, environment and other negotiable elements of the game are opportunities or obstacles, to be used, circumnavigated, destroyed... Also the rules of the game are regarded as obstacles. When you are big enough you can change playing field itself. Like being too big to fail - that's a good example, and good question - outwardly that was against free market rules. However, free market has no rules, has it? That's the paradox, either free means completely free and "too big to fail" is just a clever trick, to be admired, but not available for lesser players, or "free" has exceptions. And if exceptions are allowed, there must be external controlling force, unless all players play fair by themselves and agree upon certain... well, maybe not rules, but principles - we're free, but we voluntarily agree not to set fire to our opponents. In an ideal world it could work. In our current world it simply does not. Our existing "free" market is like an MMA cage - as long as competitiveness is the main characteristic of the system, big corpos have more to say than small companies and people. It's is neverending struggle, the bigger usually wins, and small player can become big and join the game on highest level, becoming yet another monster, with human factor reduced as being just another obstacle. Human factor is usually incompatible with profit-driven type of business.
It is true though that these days there is more public awareness about where the goods are coming from, what conditions the workers have, what environmental impact there is... but it's not because corporations suddenly became more willing to do good, it's because despite all efforts the public became more vigilant and enforced changes in places that otherwise would happily continue to pursue money without regard to damage they do in the process.
And then, having said all that, I'm not against free market. I can't imagine free men who are unable to create, produce and trade, as I can't imagine freedom without property rights. No such thing can exist. But then again, the free market we have now guarantees that freedom will be limited. Free people create free market which then threatens the freedom that created it in the first place. When everything is for sale, life, health, mind... they become commodities. Foundations of our freedom, if allowed to have measurable value, they stop being foundations.
Train of thoughts to be continued...
Photos taken from:
http://www.picserver.org/f/free-market.html
https://www.flickr.com/photos/teknokool/3729453412
