P.L. Fraietta

Myths about the Free Market, Part 4

Aug 1, 2011 at 2:25 PM

By P.L. Fraietta

Myth 4: Unregulated free markets lead to poor environmental conditions

Over the last decade or so the rise of environmentalism has been impressive. From college campuses to office buildings people are making strides to become more energy efficient and environmental friendly. But accompanying this rise has been the birth of a myth: unregulated free markets lead to poor environmental conditions.

This myth is easily debunked when we consider economic factors referred to as other-regarding preferences, efficiency, and property rights.

1. Other-Regarding Preferences

The concept of other-regarding preferences simply states that sometimes, individuals are willing to sacrifice a little for the "greater good" because they feel it’s the right thing to do. Think about any time you donate to a charity. Though you get nothing tangible in return (tax benefits aside) you do so anyway because you feel it’s the right thing to do. Perhaps doing so makes you feel good about yourself. Regardless of the reason, the charity gets its donation and you’ve made a decision appealing to other-regarding preferences.

Myths about the Free Market, Part 3

Jul 22, 2011 at 11:25 AM

By P.L. Fraietta

MYTH #3: UNREGULATED FREE MARKETS LEAD TO POORER PRODUCT QUALITY

A common argument made by anti-free market thinkers is that unregulated free markets will ultimately lead to poor product quality, thus government must create safety regulations to protect the consumer. This argument shows a lack of economic understanding and is also a myth.

The proponents of this myth make two arguments to support it: (1) Businesses only care about profit so they'll do whatever necessary to cut costs and (2) Businesses will collude to keep costs down by producing poor quality products realizing if they do so everybody wins. Both arguments fail to account for the implications of competition.

1. Businesses only care about profit so they'll do whatever necessary to cut costs.

While it is certainly true that businesses do only care about profit and will always attempt to minimize costs, this does not lead to poor product quality. In fact, it leads to the direct opposite. If my goal is to maximize profit I need to produce a product that people want and want more than my competition’s. Why would consumers want poor quality products? They wouldn't. So why would businesses produce them? They wouldn't.

Myths about the Free Market, Part 2

Jul 16, 2011 at 5:09 PM

By P.L. Fraietta

Myth #2: Unregulated free markets lead to monopoly

Monopoly: unless you're referring to the board game this word usually sends a chill through people's spines. We are conditioned to believe free markets give birth to monopolies and therefore government must regulate with anti-trust legislation to protect us. This is a myth.

To start, we must understand the conditions necessary to create monopoly. In order for monopoly to exist, there must be something that prohibits competitors from entering the market. In an unregulated free market possibilities would hypothetically include technological advantages, predatory pricing, a lack of substitute goods and capital requirements. Once we introduce regulation those possibilities expand to include legal barriers and subsidy. As my premise is that unregulated free markets do not lead to monopoly, I must refute all four hypothetical market entry barriers that exist in unregulated free market.

1) Technological advantages. It is argued that if a producer has a technological advantage over his competition he could eliminate his competition and create monopoly.

Myths about the Free Market, Part 1

Jul 7, 2011 at 6:45 PM

By P.L. Fraietta

Myth #1: Unregulated free markets will result in workers being treated poorly

You've likely heard this myth during history class. We are told that prior to the government stepping in with worker protection laws, to keep the market in check, evil capitalists abused their workers, making them work up to 16 hours per day, 7 days per week, children included. We are then told that if we deregulated now, these same practices would reoccur. But, what we aren't told is what really stopped these practices and why they would not return with deregulation: technology.

First off let's start with the obvious. Technology leads to increased productivity. If I have a robot that can build 1,000 cars for me in one day I am going to be a lot more productive and thus require less hours from my employees. Some may say 'greed' will lead me to try and make 10,000 cars by having my employees work longer hours, but this is a silly argument. There is a finite demand for cars, just like everything else, making it utterly worthless for me to produce an excessive number of cars. So, as technology improves, so does productivity, leading to shorter work time.

Why I Oppose the DREAM Act

Jun 29, 2011 at 11:36 AM

By P.L. Fraietta

The DREAM Act is back in the news today as some have accused the Obama Administration of not executing current immigration policy in favor of the still-pending DREAM Act. For those unfamiliar, the DREAM Act is a proposal that would give illegal immigrants, who came to the United States as children, a chance at legal status if they complete two years of college or military service.

While I am all for providing a path to citizenship and ultimately open border style immigration laws, I do not support this proposal and it is my belief that all liberty-minded people should oppose it as well.

If we look past the question of whether or not illegal immigrants should have a path to citizenship, we can see that this proposal is simply another attempt at government led social engineering. Why make the requirement two years of college or military service? Because it is government's belief that attending college or joining the military molds "better" citizens.

Do we need Amtrak and the USPS?

Jun 8, 2011 at 5:03 PM

By P.L. Fraietta

Yesterday, Republican Presidential candidate and former Minnesota Governor Tim Pawlenty outlined his plan for economic recovery. Though I do not believe the government can fix the economy I found some of what he said intriguing, particularly when he discussed the possibility of turning Amtrak and the USPS over to private hands.

Amtrak

The initial motivation for government get involved with the railroads was, ironically, to prevent monopoly. Back in the days when the rails were the only efficient way (horse and wagon being the next best option) to ship/travel cross country rail, demand was nearly limitless, which allowed rail companies to charge whatever they wanted. Fast forward to today. We now have cars and planes to travel/ship things cross country. In economics 101 we call this substitute goods. Once a substitute good is introduced into the market, demand falls, competition rises, and prices fall. If rails today charged an outrageous price for a train ticket from NYC to Baltimore, people would (and do) drive or fly.

Florida "Drug Testing for Welfare" law is just more statism

Jun 1, 2011 at 5:12 PM

By P.L. Fraietta

Today, Florida Governor Rick Scott signed a bill into law that requires welfare recipients to pass a drug screening before they are eligible to receive payment.

Conservatives have applauded the law saying it weeds out those who are not "worthy" of welfare, but what they fail to realize is this law is not conservative in any sense of the word. Once upon a time self-identified conservatives did not believe in the concept of government social-engineering. Today, however, they seem to believe the best way to fight social-engineering is with some of their own.

Liberals, on the other hand, have responded by arguing this law interferes with the privacy rights of welfare recipients and thus is unconstitutional.

Like usual, both sides have failed to see the big picture. The overall issue here is that government should NOT have any impact on who does and does not receive welfare because government should NOT be involved in welfare! Welfare services should be controlled by private organizations (charities, churches, etc.) and these groups should decide who receives and does not receive aid.

This is just more of the same disturbing trend of statism that has gone on for the past half a century in America. Instead of debating what the government should and should not do our debates now center around who should and should not receive government funds. It is up to those of us who still cherish the concept of liberty, small government and personal freedom to point out these statist occurrences and resist. We must show our peers that issues such as whether or not you think drug addicts should receive charity are irrelevant in politics. All that is relevant is "should the government provide _____ or not." If we pose the question that way, we might like the answers we hear.

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Governor Gary Johnson at Fordham YAL

Nov 16, 2010 at 7:50 PM

By P.L. Fraietta

Governor Gary Johnson at Fordham

On November 4, the Fordham Young Americans for Liberty hosted former New Mexico Governor Gary Johnson for a lecture and Q&A session.

Fortuantely, we were able to video the event and have posted it on YouTube in three parts. The videos are available at the following links: Part 1, Part 2, and Part 3.

Additionally, our school newspaper's coverage of the event can be found here.