The free markets economy concept suggests moral values like equality in what a nation wants to sell or buy. But everyday experience has shown that the 'free' as used never applies and there is no morality in the markets' operations. For example, richer or developed nations dictate what should be in the markets and what should be consumed. They dictate the flow of the markets leading to developing nations always selling raw materials cheaply while the richer nations buy and process them, and sell them back to the developing nations to consume. The so-called 'invisible hand' (ghost) continues to operates and has made developing nations poorer and developed nations richer. What can be done to experience the freedom and also to equalize operations in the markets without resorting to state regulation or intervention?
Suggestions for more "market freedom" without state regulation or intervention, could be to set up consumer groups and entrepreneur interest organizations, which could have the role of pressuring the State for a freer market by trying to affect legislation that would result in more market liberalization, stimulate and promote free competition, aim at stamping out corruption and "red tape" which hinders business in developing nations, public business educations/seminars/training workshops and so on.
In addition, there could be attempts at sustainable development and microfinancing, for example investing in small communities and making profit while allowing for a place to develop(e.g. hold business competitions for businesses in rural Africa that have both profitability and long term viability, and also meet social criteria). This could be in done with conjunction with NGOs, international businesses and foreign Aid from the EU, USA and so on.
I am very grateful for your thoughtful contribution, Md. Awal Hossain Mollah.
There is a large literature on this subject, some from the 1950s, 1960s, etc. Have a look at for example, Raul Prebisch, Samir Amin's writings. If you need exact references contact me.
Professor Raja Junankar provides good indications, I would also like to know these references better.
Suggestions for more "market freedom" without state regulation or intervention, is very dangerous to develop a sustainable way in developing economies.
I think that the question i snot the correct one: when free market policies serve the developed countries they advocate for it; when protectionisms and restricted policies benefit them then they go for it. The developed countries are powerful enough to chose policies that best benefit them.
agree with Eberhard Weber because, in our post-COVID time, the processes of globalization are being replaced by the processes of localization and regionalization. And platform economy tools as one of the most important areas of digital technology development will exacerbate these processes.
Thank you very much, Profs. Petrella, Fortes, Weber and Vilgelm for your thought provoking discussions. The discussions show that the powerful developed economies are always very strategic and pragmatic in all their dealings, which must always benefit them in any case. That is why the issue of ethics becomes problematic.
Arlindo Rodrigues Fortes: Send me an email and I can send you some of my old notes.
Raja Junankar I will send you my email. Thank you in advance.
There is no such thing as a "free market". It is a power determined global network of oligopolies, speculation and exchange. The developing countries in the period of sixties and seventies empowered UNCTAD for research and policy recommendations protecting developing countries and trying to introduce a new international order. I know that. I participated. It was disabled by developed countries group and neoliberalism, crushing the group 77, and the new World Trade Organization restated the GATT principles against the UNCTAD ones.
Thanks, Prof. Trputec. This is really interesting. I will very much need your expertise in the subject matter. Is it possible to have some literature on the subject matter from you? My contact is: [email protected]
Grateful!
Victor Selorme Gedzi
Literature is abundant. Give me some time to select it for you.
While I agree with Dr Trputec to some exchange,besides brief experience and exposure to dubious ethics in the financial services industry of small and countries with a democeatic deficit,
I'd say that it's true that the economic system,although nominally free is dictated by financial elites which in practice behave like cartels, proponents of the free market don't necessarily state that it is free as such,but that it gives a person the freedom theoretically to engage in various forms of economic activity without being impeded by ie government regulations.
Besides economic exploitation which could result in uneven development,in countries which aren't characterized by having rule of law and evenly developed societies there is a problem of corruption,which greatly hunders free enterprise.For example in the former CIS,you have to pay bribes to local officials as an unspoken law to do the most basic form of business.So for example if a country's senate or parliament enacts legislation which allows for no limits on capital or property transfer between companies or persons within the CIS,or with countries enacting Double Tax Treaty Agreements,how will this type of nominal liberalization in economic legislation benefit a small to medium regional entrepreneur in a developing economy if they can't even set off their business because the bureaucracy are delaying their paperwork in order to extract bribes from them?
It is necessary to place free market controversies in certain contexts and circumstances. It is not the same if it is a central state than a developing state. Nor is it the same when we are in normal conditions as when we are in exceptional conditions. Market freedom must be analyzed in each situational context. If we don't, we end up talking about theoretical generalities, emptied of instrumental content.
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Jorge, do the contexts justify the unethical operations that we practically experience?
Jorge, I think the greatest strength of 'the central states' is that they exist in blocks and therefore united and have one dominant powerful voice (developed economies) while 'states on the margins' (developing economies) are individualized and do not have one voice. There in lies their greatest weakness.
Principles of free market economies are not unanimous in the society of economists. So, it is not like maths where 2+1=3. However, today's world embraces the principles. So, how the economy of a country will work depending on numerous variables. It's like a game of multiple teams in a tournament in different fields. Everybody plays to hail the champion. Some remain happy to just participate. Some cry remaining runner up. There are good referees, bad referees, good players, bad players, good coaches, bad coaches.......
Inter and intra company transactions dominate the world trade, None of these companies is from small developing countries. Together with powerful states they manipulate even small countries exchange rate. My country Bosnia and Herzegovina for decades has over valuated exchange rate and a tremendous rate of unemployment and trade deficit. Others decide about our destiny. It is a digression.
Personally I think it is too late to contemplate about parcial solutions. The climate tipping point is under our nose. We have to deal with all world problems in one package. G26 was not enough. Let's come together and save the future for our children.
I think this is true. If we do not find a global solution to this challenge, migration and other problems may continue, and the security of people and nations may be compromised.
It is very sad that we witness the repeating of the same story the Nonaligned countries told during and after UNCTAD. I participated in the first. Nationally some countries (China, to some extent India ans some other big economies) that could afford to delink partially from the "free market" succeeded to move ahead to some degree. But nothing was possible without a decisive role of the State. Unfortunately, these interventions are often plagued with corruption. But are you telling me that in rich countries there is no corruption?
The simbiotic behavior of reach governments and TNCs is what the "free market" is today. Now, there is a new form of "economic sabotage" in favor of the rich (countries and people). At this moment in action is another form of austerity being imposed on poor peoples everywhere through well coordinated rise of energy prices plus the redistribution of income to profit earners.
The concept of a free market economy is based on an assumption that no single person or country can influence the market price. In fact, in international trade large dominant countries fix the price to their advantage. Note the way that the international oil market price is determined by a very few players. Developing countries are "small" players in most traded goods and have to face the prices fixed by dominant countries. I agree that the developing countries are generally treated unfairly!