Accounting for Free Markets: the Euphemism

Via Joe Gregorio, on petroleum, gas mileage, and free markets...

Moody-Stuart, who is currently chairman of the mining group Anglo American, says he is a great fan of the free market, "but like most things, they have a failing. Without regulation to channel their power, markets will not deliver things which are of no immediate benefit to the individual making his or her choice, even though they may be beneficial to society."

The problem is worse than whether a free market can work here or not. The problem is "free market" is a ghastly oversimplification for this situation. A truly free market would make obvious the true cost of gasoline. This would mean the cost would account for all the military, all the lobbying, etc. that's involved in that industry.

"Free market" is often a euphemism spouted by the primary beneficiaries of the market itself, which in fact is highly controlled. People have been moving many, large levers behind the scenes of Big Oil for well over a century. That market is *anything* but free.

Not that I disagree with the whole "free market fairy" concept -- any significantly valuable market is going to have a lot of powerful operators using every hidden lever they can get their hands on. This is called "working the system". People will always attempt to "work" to their advantage whatever system confronts them, no matter how large or small that system. Some people are better than others at doing so, and then using that leverage to continue on. Some people have very low ethics in deciding what levers to pull.

Welcome to planet earth.