Re:TSMC to begin 3nm chip production next month
by varispeed on Thursday August 18, 2022 @05:49PM
(#32515314)
I broadly agree with your post, however, the "Unrestricted competition" as you define would only work in a vacuum.
Company growing too big is creating restrictions for other companies - from being able to lobby government to increase regulation of the area they operate in, so that the barrier to enter the market is getting set higher and higher for new companies or ensure that the tax system is limiting the growth of companies that could in future become a competition.
Other examples I can think of is when a big corporation is buying up the entire supply of parts that other businesses need to build their products. So a single whale move can wipe out entire sectors (that's how chip shortage is affecting small and medium business).
So your definition of free market for me is like a great function that works very well, but crashes under edge cases.
> an economic system in which prices are determined by unrestricted competition between privately owned businesses.
"Unrestricted competition", to me, clearly says that businesses should be able to compete without such restrictions as being split up by the government if they become too big.
Or this definition from investopedia (the first actual result on Google):
> The free market is an economic system based on supply and demand with little or no government control.
The government splitting up businesses is certainly a form of government control.
However, Wikipedia's first paragraph is:
> In economics, a free market is a system in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market without market coercions. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority other than those interventions which are made to prohibit market coercions. Examples of such prohibited market coercions include: economic privilege, monopolies, and artificial scarcities.
Apparently, the government imposing control and restricting competition is part of Wikipedia's definition of a "free market", so extremely harsh anti-monopoly and laws against anti-competitive behavior fits perfectly well in Wikipedia's definition, but makes the market less free according to the definitions I've been following.
The important part is, I agree that a lot of government intervention is required to make markets function efficiently. I just personally wouldn't call that a "free market", rather a well-regulated market.