The free market is elusive

The free market is elusive

Free markets aren’t particularly common.

At the baseball game, the snack vendors sell what the person with the concession tells them to sell. It’s a choice, but Hobson’s choice: take it or leave it.

Geography makes the idea of a free market difficult, because only one business can exist in any given spot. Fifth Avenue in New York seems like an epicenter of commerce, but long-term leases and the need for millions and millions of dollars in free cash flow mean that there are actually very few degrees of freedom and not much choice.

Free markets are a powerful engine to solve people’s problems, but free markets are difficult to ensure for the long haul.

The web cuts through the geography problem. Shopify is fine with a million or even a billion stores–they don’t take up any space.

And when the web was young, the free market in ideas was open to anyone with access to a library’s internet connection.

But the web rewards network effects and network effects have led to monopolies. Google doesn’t really want a free market in ideas (they hate blogs), instead, they want a market in which they’re the landlord. Facebook enabled a huge outpouring of voices from people who didn’t previously have a microphone, but their algorithms and focus on clicks led toward incentives for outrage as the voices corroded so many elements of our culture. This reinforces the idea that the public doesn’t always want a free market—they’d rather have a convenient one, a predictable one and a safe one instead.

And so we have Lyft, a ‘market’ in name only, because drivers can’t name their fares or produce any innovations.

Our culture has generally moved, in bits and pieces, from a totally free market (the open cry bazaar on the steppes of Mongolia) to one in which more and more interactions are fenced in due to market power and regulation.

We’ve gained a lot in terms of reliability and the management of side effects. But we’ve lost flexibility and speed as well.

Most people who bemoan the loss of the free market don’t actually want to live in a world where that’s all there is. At the same time, fighting market power in our quest for better solutions is a worthy effort.

 

TODAY is the first day for signups for The Podcast Fellowship. This is one of Akimbo’s most popular workshops, and for good reason. If you have something to say and need to be heard, I think you’ll find that a podcast is a great way to share your ideas. Look for the purple circle on the site for a significant discount (but it decreases each day). Hope to see you there.

gabri

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