Free market theory 3 simple questions?

[PV]

If anyone would please tell me if I am right or wrong:

After reading The Adventures of Jonathan Gullible these things came to my mind (note that I do NOT have economic education and therefore my remarks may be wrong):

1) Businessmen and economists forget that we have FINITE resources on this planet. A free-market society can only work for a few decades - before everyone realises the wastefullness and miseconomy of it. Due to competition, manufacturers are forced to lower the price also by using cheaper low-quality materials. What we get is a product that has a dramatically short lifespan and ends up at a junkyard. If they built things to last, with the best technology availible etc., the entire consumer cycle would stop and the economy would collapse. In short, creating something good destroys the economy.

2) Without a government, it would be a de-facto rule of the corporations. And since at the core of our wellbeing, in the capitalist society, lies profit, the owner wants the biggest share. Today we can see how huge corporations treat their employees - they fire hundreds from their jobs without remorse, saying how they are reducing outgoings, while the topmanagers continue to buy new cars and laptops every year. And those empoyees who do stay are forced to work thrice as hard for fear of losing their job.

4) Trading consumes much energy and resources. I see no sense in importing some fruit from another part of the world because it is cheaper than the one produced at home. Why the hell is price and profit everything we look at?

When all the tries have been cut down, when all the animals have been hunted, when all the air is unsafe to breathe, only then will we realise we can't eat money.


Even today, the welfare of the whole society depends on the mercy of a select few 'investors' and such who decide where they want the economy to go. What's the use for electing politicians, anyway?
Isn't politics meant to assure our welfare?

Thank you

[SDD]

1) Business and economists do NOT forget that most resources are scarce. That is the whole subject of economists. If you want to buy something that will last a long time, there is a market for that. Want a piano that will last more than a lifetime? Steinway will sell you one. If you want a toothbrush that will last a lifetime, you could have one made for you at very high cost. Not many people think that's a good decision, though
2) There is a definite role for government. It is to protect private property and maintain predictable rules of law.
4) If you don't see any sense in imported fruit, avoid that fruit. If everyone felt as you, there would be no imported fruit. Millions of people disagree with you and they have satisfy their needs by importation.

[Anjaree]

1. I do agree with you.It is a long term projection using the market failure which is likely to be true. It is a new school in economics which suggested an economy without money.Money creates a lot wasteful things.
2. It is a real foreseeable situation of competition. The German economists including Hayek have developed the new concept of social market economy in the 1950s, just right to deal with this situation. It has created an economic miracle in Germany with or without the Marshal plan.
4. I cannot agree with you at this point. David Ricardo, a rule of comparative advantage is still true,and make no harm. In the development economics,it still suggested trade without aid. It can kill the world hunger and poverty. Stopping the trade is only a selfish movement.

[Ace]

1) The role of businessmen is to properly allocate the finite resources to their most productive uses, to the goods and services that people desire the most. How is is known what people want? Simply through the price mechanism. This is how businessmen know what to produce for society and what not to produce. Knowing that their profits will dwindle when these resources are no more they will find new innovative ways of producing goods, they will conserve and learn to reproduce more efficiently the resources needed.

2) Please remember that these businessmen do not just sit in an office and pick their noses all day, they are thinking of how best to serve society. They are thinking of the next invention or good that will make life easier. Of course they deserve some money, THEY are the public servants not the elected officials whose only talent is to steal from the productive individuals.

4) This is narrow minded socialist thinking. Entrpreneurs are always on the watch of how to better produce for man, they will be innovatove in their produuction process, or how will they make teir profit? If you were the one losing out on the fruit business you would be forced to lower prices, offer a better product or more services because you are losing out on business. Now put yourself in a the consumer position, isnt that what you want? The best possible services for the least price, this is what free market is all about. Wealth is spread around more efficiently ina free society than a centrally planned one.