That's a good book, but I'd argue that in a pure free market without intervention, monopolies would be disappointingly common (and why some level of regulation should exist).
For example, the software industry. It's pretty much completely unregulated. Prices for software have gone to zero. Software engineers routinely become millionaires, and some billionaires.
Ad infinitum? No it doesn’t.
> Prices for software have gone to zero.
On earth?
> Software engineers routinely become millionaires, and some billionaires.
They don’t but if they did, this could mean the opposite of what you think it means.
I didn't pay a cent for any of the software on my Linux machine. Free Open Source software is everywhere.
In the 1990s, the Seattle Times wrote that there were 10,000 Microsoft millionaires in the Seattle area, excluding the value of their homes.
Charles Simonyi became a billionaire as a Microsoft employee.
At the same time I'm not sure that the computer industry is a good example for your claim due to its roots in the Bell telecommunication monopoly and the massive subsidies from the US military that lead to the wide availability of the cheap personal computers that most of the open source software that you are talking about originated from.
If anything the rise of American tech giants and the proliferation of cheap computers is directly attributable to decades of intervention by the US government and not a free market success story.
Bell invented the transistor, not the government. The rest is history.
I am not aware of any subsidies that Microsoft, Apple, etc., received from the government, let alone massive subsidies. Intel received zero subsidies for the 8088 microprocessor, which really launched the computer industry. Not for the 286, 386, x86_64, etc., either.
> is directly attributable to decades of intervention by the US government
Oh come on. I've been in this business for 50 years, with zero government intervention (other than I pay my taxes).
DEC (maker of the famous PDP-10 and PDP-11) did not get subsidies from the government, although it sold equipment to the government.
> I'm not seeing the connection between a relative lack of regulation in the software industry and the price of FOSS software being (close to) zero
Regulations are a massive cost to industry. There are no regulations on software development. I don't have to get a permit to write software, or sell it. I do not need a license. I do not need any government approvals. I do not need any certifications. Anybody with a keyboard can write software and make it available under any terms they want (usually free!).
Has the government paid for any of this FOSS software? I've never received a dime from the government for my 26 year efforts in making FOSS software.
> or your larger assertion regarding free markets and prosperity in general.
The most prosperous economies in history and the world come from free markets, not socialist ones.
The combination of these government interventions amongst others is what enabled the rapid development of these fields which lead to the computer revolution that we all enjoy This is an amazing thing to be sure, but it isn't an example of free-market forces at work.
It's an example of a government reading the global conditions in which it found itself in and successfully responding to those conditions by regulating and investing in key industries to ensure the dominance of the nation that the government manages. No doubt there were problems with these government interventions but they are on the whole an amazing success story for America and the world as a whole.
Bill Gates and Paul Allen didn't dream up their ideas for computing in a vacuum, they were fortunate to come of age in a time and place that gave them access to state of the art computers in their youth and later as young adults when Gates attended Harvard where they developed their BASIC on a PDP-10 that was funded by DARPA.
> Yes, I've heard the story that X was the result of A+B+C+D+E+F+G and B was done by the government, and so the government gets all the credit.
I'm not saying that the government gets all the credit here. I'm simply saying that the success story of the American tech industry is one that is the result of seeds planted by the government decades ago and one that we all enjoy the fruits of. Government regulations, investments, and purchasing contracts play a large role in why you and I can use and enjoy free software in our every day lives.
The field may mint millionaires at a higher rate but it’s still not routine.
Lack of regulation in tech causes real harm, like addiction, social issues and misinformation,not to mention issues with cyber bullying and suicide in teens.
Do some people make out like bandits with billions or millions of dollars, sure but I don't think that's a good barometer for progress or prosperity.
To paraphrase Doctor Who "Human progress isn't measured by industry, it's measured by the value you place on a life. An unimportant life. A life without privilege"
And by that measure we are still cavemen.
None of those had effective regulation.
Regulation against fraud does work, but the job of government is to prevent crime, enforce contracts, and stop fraud, in a free market.
> And by that measure we are still cavemen.
Government is not going to fix that.
> Do some people make out like bandits with billions or millions of dollars, sure but I don't think that's a good barometer for progress or prosperity.
In the 1800s the US lifted scores of millions of people out of poverty into the middle class.
The free market has its flaws, but many blame it for the ills caused by corruption and lobbying of politicians.
There has never been a truly free market anywhere in the world, let alone ‘pure’, so I don’t see why you use this adjective at all.
However, what we do know is that a free market requires management people today aren't accustomed to. Suddenly you are fully responsible to negotiate protection, transit, etc. That is a burden many would find off-putting and, in many cases, something beyond their capabilities.
If we were magically dropped into a free market tomorrow it is likely we would quickly attach ourselves to whomever is willing to give us those things without needing extra thought, just like the monopoly does today, and – tada – we're right back to the way things are right now.
If we were born into a free market and didn't know anything else then monopolies might be harder to pull off. That said, while the initial conditions were a bit different, we've been in a similar situation before and the monopoly won in the end.
There's a continuum between free markets and socialism. It is not a binary thing. Nothing human is perfect. You might as well claim there is no such thing as water because 100% water is not achievable (there are always contaminents).
Also, a free market requires a government. The role of government is to protect life, liberty, and property.
Uh, what? That's like saying there is a continuum between cold and far. Your comparison points are not in the same realm. Consider a free market where all actors decide to form cooperatives. That, however unlikely in practice, would result in both free markets and socialism at the same time. A free market does not care about how the people decide to divvy up capital. The people deciding to share ownership in the capital is perfectly valid within a free market. If "free market" was prescriptive about how people must trade then it would be completely contradictory.
> Also, a free market requires a government. The role of government is to protect life, liberty, and property.
Absolutely not. In a free market, one negotiates with private vendors to offer these services. A government is the antithesis of a free market, being a monopolistic vendor that you don't get to opt out of. A voluntary organization could emerge in a free market to provide those services to those who wish to join without having to individually negotiate, which would closely resemble the governments we know, but key is that it membership is optional. What makes a government more than an association is that you don't get to choose. The market cannot be free if you cannot choose who to buy from.
You could more reasonably say that there is a continuum between free markets and planned economies. It is still flawed as none of this is one-dimensional, but for the sake of simplification we can run with it. The space between is referred to as mixed economy, not free market.
A "free market" where the market isn't free doesn't make sense linguistically or within what "free market" is defined as. Of course a situation where some submarkets are unconstrained and others restricted can exist — not only can, that's how we already live — but when that occurs we call it a mixed economy. Our current world exists under a mixed economy.
I suspect your confusion stems from trying to apply the ideas of free market, which refers to a broad market economy, onto only the submarkets that are unconstrained. If you could magically ignore all the restricted markets then your logic would be reasonable, but in the real world we cannot ignore the rest of the world around us. It exists whether you like it or not. Unfortunately there is no generally accepted term for this, which is no doubt why you've wanted to use "free market" to fill the void, despite it already having a different meaning, but "unregulated market" is the one I have seen used most often in that context. You might consider using that going forward. I expect most will understand what you are trying to say without confusing them into thinking you are talking about free market in the proper sense and will allow you to converse with those who already made it clear that they were talking about free market in the proper sense.
No, it isn't.
Again, look up the definition of it rather than make up your own. Here's one from wikipedia:
"In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers."
It still requires a government to keep people from stealing, defrauding, and murdering each other.
Under a free market one voluntarily buys protection, negotiates with relevant parties how arbitration is to be conducted, and so on. These are all part of the market just the same. A "free market" that isn't free continues, despite your insistence, to be nonsensical.
When was the last time you made an offer to your police force? Under your free market definition it is necessary for you to express your demand position, else supply and demand cannot be determined. Yet, I suspect your answer is never. There isn't a free market for you to express that in. It is not something you have to think about as the single desk has already sorted it for you.
What you are thinking of, again, is a mixed economy, where the government has taken control and regulates some submarkets. That is how our world functions. A market having unconstrained submarkets that see prices determined by supply and demand isn't the same as a free market. What to call the submarkets within a mixed economy that are based on supply and demand isn't generally accepted as there isn't usually much reason to need to talk about it, but I posit "unregulated market" remains the leading contender for what shows up most often when one is trying to single it out. "free market" is a non-starter as it already means something else in the same context, as seen in the very definition you gave us.
You are, of course, revealing one of the reasons why we've never seen a free market. The concept is full of unresolved problems that make the whole thing untenable in practice. I think we can agree it is almost certain that people wouldn't be able to handle themselves if there wasn't a government automatically providing those things for them. But that's the nature of a thought experiment—It doesn't have to be realistic.
How? If a monopoly were to emerge in what was a pure free market, it would become the government, and its rules would become regulation on the market. And thus the pure free market could no longer exist. Monopolies and free markets cannot coexist.