Like unicorns, the 'free market' doesn't exist

What we have is not capitalism, it’s corporatism. Under real capitalism, the free market would prevent the destruction of our environment. All our problems would be solved if we just returned to the good competitive capitalism. There never has been, is not and never will be a capitalist free market economy. 

• Capitalism is meant to pivot around the free market. If the market were rid of government regulation then true competition would reign, with corporations battling it out to provide their goods and services to rational, all knowing consumers. This would provide stable and accurate prices and quality for goods and services as competition would aggregate supply, demand and pricing.
• The success or failure of a company would be directly proportional to its ability to meet the needs of its consumer.
• The recent failures – the bankers bailout, the corporatisation of government, the decline in social mobility – are because we do not have real capitalism. We are in fact in a post capitalist, state capitalist of fascist state. Whatever state we are in, it is as a direct and inevitable result of capitalism. 
• Corporations themselves are rabidly anti-competition.
• In Britain today, 97% of food purchased, is bought in supermarkets, with only four corporations making up 76% of those sales. In the US, 72% of food is purchased in supermarkets. As these figures continue an upward trend, we can see that monopolies are being created in food production.
• If we take a look and test the theory that the consumer would benefit from this process of corporate battles. Since the 1950's, the percentage of the US household budget spent on food dropped from 32% to 7%. In the UK the proportion spent on food has dropped from 33% to 15%. With supermarkets making record profits, and household food budgets down, who is paying the price for our food? The answer is the farmer and the environment. 
• Seventy years ago, there were nearly seven million American farmers, today there are two million. Now 75% of US produce comes from just 50,000 farming operations.
• The free market has seen a few corporations rise to dominate the market, set their own prices and lead to negative social impacts. While some consumers might see a fall in the price of the food they are buying, they cannot be sure that they are comparing apples with apples and while perhaps benefiting as consumers, they are losing out as producers.
• As seen above, it is not in the interest of the corporation to maintain a free market. The corporation has no reason to apply any kind of ethics whatsoever. Adidas employs child and sweatshop labor in the far east because it is cheaper than employing people on a living wage, with decent terms and condition.
• Historically the government, the purported servant of the people has been the enforcer of rules necessary to restrain the ‘market’ from behaviors which from point of view of the corporation would lead to undesirable social outcomes.
• In the US, by 2011 the largest thirty corporations spent more that year on lobbying government than they spent on taxes. 
• In the UK, corporations with outstanding tax issues are currently in working groups with the to redraft the very tax rules they are doing their best to avoid. 
• When corporations break the law, they are either not tried or given a fine which comes nowhere near the profits reaped by breaking the law.
• Recently banks have instituted fraud on a global scale by simply making up the LIBOR rate, the base interest rate, at the cost of savers and pensioners and to the benefit of their traders who specialize in debt, not capital.
• In 1950, corporate taxes made up 30% of federal revenues in the US. By 2012, this had fallen to just 7%. In the UK, Corporation Tax rates were cut from 52% to 35% over just two years between 1984-86 and has continued to be cut until it stands at just 21% today.
• Corporations do not want any rules which stand in the way of making profit. Left unregulated, they would simply operate in ways which maximized their profits regardless of social outcomes. When we introduce a regulator, corporations seek to and succeed in compromising them. The issue is not to blame one or other of the players, but the game of capitalism itself.
• The free market myth is nothing but a nonsense. It is a self serving nonsense propagandized by its beneficiaries.

In conclusion, not only is the market not free, but it never can be. It requires legislation to prevent rational corporate behavior which would undermine it, and any regulator (state or otherwise) will be corrupted by corporations seeking to influence them. The sooner we abandon this madness, the sooner we can answer the bigger question: how do we create a means of economic organisation which has the highest chance of meeting our social goals? We must abandon the myth of the free market, just as we gave up on Santa Claus and Unicorns – it is time to put away childish things so we can become grown up caretakers of ourselves, each other and the planet.

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Morality in a free market

Are the markets moral? Should we expect them to be? Moral according to whom? 
If they’re not moral, are they immoral? Amoral? Or value-neutral?

• Morality describes the codes of conduct put forward by a society. It can refer to a system of conduct to which all rational persons, regardless of culture, would subscribe. Morality deals with our sense of fairness and our sense of responsibility to others. Implicit in morality is the idea that there are right ways and wrong ways to act.
• A market is any structure under which commerce takes place: the purchase of land, stocks, airline tickets, vegetables, sporting events, whatever it may be. These structures begin as neither moral nor immoral. They are indifferent as water. Markets are meant simply to be vehicles for finding the most efficient way to balance supply and demand. The freer the market, the less encumbered by regulation, and the more efficient it should be. 
• From a social standpoint, unfettered markets can lead to situations most of us would consider immoral: vast populations of have-nots, a ruined environment, plutocracies and other dystopian scenarios.
• How can we influence markets so that they can help us build the kind of world we believe we should have?The misalignment between markets and morality -- public good versus individual rights. How markets should be governed is a discussion about capitalism itself. Capitalism has brought so much to so many in so short a time. Is it perfect? No. 
• Even as our free-market system has raised living standards to levels once unimaginable, the backlash against the markets has gotten louder. The Occupy Wall Street movement is the most visible example. Most of the protesters say they aren’t against the markets. They’re against injustice and inequality and that the system is rigged against them. They say it’s criminal for a CEO to make several hundred times the earnings of an average employee. 
• It’s disgusting for a company to shut down a plant, throw workers out on the street, and, destroy a town’s economy for no reason other than that a cheaper source of production has been found elsewhere. Only government can make the markets work in the public interest and not in their own interest.
• Something in our society is out of whack. The stock market is up but people don’t have jobs. The gap between the rich and everyone else is growing. There’s an international super-class traveling the world in private jets, living in a series of penthouse apartments, while the rest of us can only shake our heads, grow embittered, and soothe ourselves with reality programs that exploit some of society’s most pathetic individuals so that we can feel superior to somebody, thereby mitigating our doubts about our own positions in the socio-economic hierarchy. 
• All systems tend to perpetuate themselves, to act in their own self-interest until curbed by some other force. John Ruskin believed that honesty wasn’t just the best policy; it was the only policy that would allow an economy to steer clear of chaos. Many corporations have learned that corporate social responsibility isn’t just charity. It fosters long-term value. Business is the most powerful force in the world, and when approached in a certain way, it promotes both economic and social good.
• Honesty fosters trust, and trust allows markets to function. When trust fails and when no bank would lend money because it didn’t trust the credit-worthiness of any potential counterparty -- markets crash.
• Those with great power and wealth have a responsibility to use it for good. Having accumulated more wealth than several men could use in several lifetimes, Mr. Bill Gates has devoted his fortune to initiatives aimed at eradicating disease and poverty in some of the world’s most backward geographies. 
• In the liberal democracies of the West, the free-enterprise system is not designed to enrich the few at the expense of the many. And the markets, in the purest sense, aren’t listening. They tend to follow mathematics, not morals.You can be as ambitious as you want; you can achieve as much as your abilities allow; but you have to play by the rules. And the rules make the markets more open, more transparent and more fair.
• In the context of larger issues: the individual versus the group; equality of opportunity versus equality of outcome; and the difference between legal and moral, which ones do we place at the top? Ayn Rand would tell that the individual is all. By contrast, a honeybee would tell you that group welfare trumps everything.
• We’re individuals, but we’re part of and we have the ability to affect the group. We do it at the ballot box and we can do it in the markets. In investing we can choose to restrict our investments to companies that exhibit behavior consistent with our own morality.
• Rule breaking is an example of personal wrongdoing, not evidence of a corrupt institution. Can we blame markets for thieves like Bernie Madoff? Do markets create greed, along with motivation?
• Look at Madoff’s sixty-billion-dollar swindle. He caused tremendous damage. He bankrupted successful businesses and charitable organizations. He reduced families to penury. His own son committed suicide. But anyone who considers Madoff a representative money manager is mistaken. He is simply a criminal.
• There are situations in which entire industries have acted immorally.The sub-prime lending crisis of 2007-08. Banks pushed people to borrow more than they needed, more than could really afford, because the banks made the most money that way. Some of the biggest culprits were deemed “too big to fail,” and were granted immunity for their mistakes. 
• A moral society seeks the best opportunity for all its members. It protects the weak while allowing ambition to express itself fully. A corporation seeks to maximize its profits while staying within the law and doing right by its customers, workers and the community in which it undertakes its activities. Some corporations take it as a point of pride to create excellent working conditions, encourage social commitment, and to act as a moral society in miniature.
• Whether markets seek to be moral or not is irrelevant, because they have proved an effective tool for improving lives. As Deng Xiaoping once put it, “It doesn’t matter if the cat is black or white as long as it catches mice.”
• The idea that everything in life can be reduced to supply and demand may not be the most valid way to look at all human interaction. At what point does that premise begin to corrupt the social fabric?
• In New York, Washington DC etc a cottage industry of line-standers has now grown up and you can hire people to stand in line for you in case you have more money than time. It creates a positive good for two people -- the line-stander and the playgoer.
• In Washington DC -- line-standing companies employ homeless people to stand in line for clients who want the limited seats available for Congressional committee hearings and Supreme Court sessions open to the public. Lobbyists and others are often happy to pay for access. From a market standpoint: supply and demand. Socially? It kind of doesn’t smell right.
• At Disney World, people in wheelchairs and their families don’t have to wait in long lines for rides. They’re placed at the front of the queue. That seems morally correct. So some people of means have paid disabled strangers to pose as their family members. This is immoral and dishonest.

As long as we would prefer to pay more for a good that is produced in accordance with our values than pay a lower price for an article that is made by taking advantage of those without the means to redress unfair conditions, we will be moving the markets towards a more just, more moral position. The fact is we aren’t always willing to do that. Regulation can fix some of the problem, but personal responsibility -- knowing what you are investing in and buying -- can play a bigger role.

Principles aren’t principles until they cost you money.

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Poor people don't work. Why?

• Poverty is not just life below the poverty line, its living under financial stress, where it is difficult to maintain quality of life. A life in poverty means living deprived of sufficient food and nutrition, education, proper shelter, sanitation, clean water and so on. This points to the need of seeing poverty as a multidimensional phenomenon.
• We are all children of one and the same God and, therefore, are absolutely equal.
• Poverty in India is attributable to (i) social inequality leading to exclusion and marginalization (ii) illiteracy (iii) population (iv) gender inequality (v) unequal distribution of wealth (vi) faulty economic reforms (vii) corruption and (vii) colonial rule.
• India has more than 400 million (30% of total population) people under the poverty line. In 1947 when colonial British left India, they left 70% Indians in deep poverty. Seven decades later, poverty is down to 30% despite the multi fold increase in population. Despite the progress, even 30% poverty means a huge headcount in a country of 1.3 billion people. 
• UNDP in its 2017 report estimated India’s poverty at 41% i.e. 528 million.
• There are lazy poor people just as there are lazy rich people and laziness is not the only cause of poverty. There are many factors such as economic instability, cultural discrimination, physical or mental disability, or familial problems. 
• Many people ignore the poor, justify their dislike of the poor, or view their poverty as deserved because they think that those in poverty could come into wealth if they just worked harder. 
• Working harder is an useless advice and an even more ridiculous mindset. In a free market society, people are rarely compensated for hard work. They are compensated for valuable skills and smart working.
• Poor people may be born poor, but they don't have to remain that way. They choose to remain poor. Coming out of poverty is neither easy nor hard. External helping hand is essential to come out of poverty quickly.
• A poor person can't think or plan his old age years. Poverty restricts forward thinking and planning. 
• Work is a pillar of our society. It supplies income that enables families to thrive, fosters a sense of pride and belonging, provides dignity and purpose. For these reasons vast majority of prime-age people work for pay. 
• Few of poor don't work, which robs them of this sense of purpose, affects their families’ prospects for prosperity.
• The presumption is that poor don’t earn enough or work hard enough.
• The reasons poor not working primarily is females with children citing family and home responsibilities, and others citing disability and illness.
• To meaningfully reduce poverty, public policy must focus on improving the health of poor, decrease work disincentives and providing work supports to poor parents such as disability assistance.
• But when a lack of employment leads to poverty, it raises important questions about the role for government. Government can make poverty less painful through income transfers etc, but the question is whether government can encourage those who prefer not to work.
• We can either accept the status quo of leaving millions of people in poverty, or continue funding large government programs that transfer income from working taxpayers to the nonworking poor.
• In India, the labor force participation rates* among prime-age workers have declined over the past three years from 48% to 43% suggesting that India is facing a work problem. China's labor force participation rate is 71%, in USA it is 64% and world average is 63%.
  *The labor force participation rate is the percentage of the population that is either employed or unemployed.
• The children growing up in a poor family just need to work hard to escape poverty.  Poverty has been proven to be a leading contributor to a child’s social, emotional, and behavioral problems. For children, poverty is an extremely difficult situation to overcome; and even if the children overcome it, they run the risk of being damaged by it for life. Children living in poverty are at an extremely high-risk for mental and physical disorders, due to lack of nutrition, physical stimulation, and emotional development.
• In USA, the reality is that one in six Americans lives in a household that is “food insecure”.
• The rich are great beneficiaries of poverty. It is very cheap to be rich in India. In a poor nation, the social elite can pass through life without facing any competition. The less democratic a nation, the safer it is for the rich.

Poverty is easy to spot, but hard to define.

Those parts of India which have been longest under British rule are the poorest today ...  Nehru

India is a rich country inhabited by very poor people ...  Manmohan Singh

As opposed to the western ‘trickle down’ capitalism India needs a comprehensive “human development” plan in order to really crush the widespread poverty. The present economy based on GDP growth, India is only promoting inequality that sustains by keeping the poor in poverty. It needs an economy that supports millions of small and medium enterprises that are suitable to employ low skilled poor people. Agriculture must be made sustainable and remunerative. Focus on good governance to root out corruption. Promote women empowerment through education and healthcare to deal with population growth. 

Capitalism & Morality

• Capitalism is the most productive and efficient economic system.
• Some critics contend that capitalism is not a moral system.
• Morality is impossible unless one is free to choose between alternatives without outside coercion. Since capitalism is based on freedom of choice, it provides the best environment for morality and character development. 
• Business success not only requires but also rewards virtuous behavior by participants in the market.
• All human beings have natural rights endowed by their Creator or inherent in their nature, and have a moral obligation to respect the rights of others. Natural rights impose the obligation not to interfere with others liberty. 
• It is morally illegitimate to use coercion against someone who does not first undertake the use of force. The role of government, is to protect man's natural rights.  
• This freedom involves far more than simple democracy and an individual can pursue his freely chosen norms, actions, and ends without the arbitrary intervention of others. This freedom is necessary for individual morality. 
• There can be no morality without responsibility and no responsibility without self- determination. Self-determination implies rationality, honesty, self-control, productiveness, and perseverance. 
• Maximum self-determination for each individual is possible only when the state is limited to maintaining justice and defending against coercion, thus protecting life, liberty, and property.  
• Capitalism is a system of relationships and cannot be moral or immoral and individuals can only be moral agents. 
• A social system can be moral if it promotes moral behavior by individuals. 
• It is imperative to create a political and economic system that permits self-determination and promotes morality. Capitalism is that system. 
• Capitalism is only a means and requires individual participants to decide on the ends to be pursued. 
• No economic system can make people good. The best that an economic system can do is to allow people to be good. 
• Morality and virtue require that individuals be free to be immoral and of bad character. 
• When an individual has choice and bears responsibility for his actions can he be moral. 
• Capitalism allows the exercise of individual free will but cannot guarantee a moral society. 
• Human development requires more than material wealth. 
• Prosperity enables individuals to cultivate their talents, abilities, and virtues. 
• Capitalism is the best system for wealth creation, permits individuals to spend less time on physical concerns, leaving them more time to engage in higher pursuits. 
• Achievement of prosperity tends to reward moral behavior. 
• Businesses and their owners, managers, and employees have moral obligations. They must respect the natural rights of other individuals, which includes honoring contracts, not engaging in fraud, not using coercion against others, and honoring representations made to the local community. 
• Businessmen should not support government economic interventions, such as price supports, tariffs, and subsidies, even though doing so might result in higher profits. Doing so in nothing but use of coercion.
• Living up to these virtues will aid businessmen in the pursuit of profit. 
• The free market rewards polite, cooperative, tolerant, open, honest, realistic, trustworthy, discerning, creative, fair businessmen. 
• Lying to and cheating other businesses, misleading consumers, and mistreating workers all have serious adverse consequences. 
• In the long run, profitable businesses tend to be operated in accordance with the basic ethical principles most people hold dear.
• Under capitalism business transactions takes place by mutual agreement for perceived mutual gains only by serving the interests of others. 
• Protecting individual choice, capitalism generates enormous wealth, and creates an environment in which virtue can flourish. 
• Capitalism is not only the most productive and efficient economic system. It is also the most moral economic system!  

• Capitalism is an economic system that promotes inequality.
• Uncontrolled, capitalism will corrupt and undermine democracy.
• The vice of capitalism is its unequal sharing of blessings; the virtue of socialism is the equal sharing of miseries. 

My View:

All the above merits of capitalistic system seems to be very nice but in reality people are selfish, greedy and does anything to maximize their profits. In a highly educated society, with abundance of awareness, consciousness of individual rights, free of corruption at least at working levels, stringent law enforcement systems with highly deterrent punishments where citizens will voluntarily comply with laws otherwise they will be compelled to fear laws, capitalism will work to great extent. In poor, less educated & developing societies, free market capitalism is a bane and a distant dream.

Capitalism is fundamentally incompatible with principles of democracy. Capitalism doesn't recognize equal rights of sharing natural resources. The rich consumes too much and poor too little. Capitalism only produces materialistic benefits and makes humans drift away from soil. A small privileged few are rich beyond conscience, and almost all others are doomed to be poor. Capitalism creates materialistic wealth, makes people insensitive and impoverishes spiritually. In the pursuit of riches, economic systems often creates jolts which only hurts the poor. In poor and less educated societies poor gets exploited with scanty food & social security. In educated & affluent societies poor people are provided social and food security only to safeguard the interests of the rich. The only applaudable achievement of capitalism is that extreme poverty & starvation deaths are eliminated. The worst aberration in capitalism is that while risk is spread out on everybody, the fruits are cornered by the rich alone. Morality is incompatible with amassing wealth. Usually amassing wealth is associated with cheating & corruption, looting public or government and destruction of ecological assets. Since the system will not change the rules, we need to change the system.