My Conservative Manifesto Rewrite Part VIII: The Economy: Part 5

 The Economy Part 5

i tried to break up these posts into shorter, parts for easier reading.  Did that work?  i know i missed a bunch of economic concepts - if anyone wants my views, just ask.

The Economy: What Works

i am a big fan of free market economics and capitalism; therefore, i will say much of it works.  i prefer a hands-off approach.  Supply and demand conditions create a more efficient usage of resources and tell the companies what people really want.  With innovations like online shopping, prices for consumer goods are less stick (as prices can be adjusted if a product doesn't sell, or sells well), the markets have become slightly more efficient. 

 Capitalism has a way of rewarding those who take the right chances and are responsible.  People and organizations are better at managing their money than the government, precisely because they have a reason to do so.  The profit motive is good and leads to innovation and, at least economically, leads to a better situation.  

The Economy: What Doesn't Work   

To see what does not work in the economy, look no further than eBay.  eBay should be an example of markets in action.  You have a seller listing an item where potentially millions of people can come to bid.  Unfortunately, you also have a company increasing fees taking money away from the seller.  You have speculation and irrational bidding (where it becomes like a sport) where the price is driven up to irrational levels.  You have those who want to buy for cheap and sell high.  You have fraud and misrepresentation of the item being sold (ethics problems).  You have scams and stolen merchandise. Government intervention is likely to cause a black market in the right situation.  You have a feedback system (kind of like a rating system) that is largely ineffectual and meaningless.  

Outside the eBay example, you have government intervention in salaries, taxing, and crowding out the private sector.  Government funding always comes at the expense of the private sector.  Some activity by the individual (or corporation) leads to problems for people who are not directly consuming the good or service (that must be addressed by regulation).  

There may be some problems when it comes to the concept of ownership and intellectual rights.  Intellectual rights is a somewhat modern concept - it could be who owns source code, patents, copyrights, etc.  The US in, particular, tends to over-patent.  Copyrights, patents and the like are necessary to ensure the people who provide a good, service, or process are justly compensated for their work, risk, etc.  

There will always be some form of black-market activity (like pirating DVDs and video games).  Here it is not so much about the quality, but the price.