Well, What about Industry Coercion?
A common discussion within the political community is whether or not the state should have a role in its economy. Friedrich Hayek, a distinguished political philosopher, believes that free market capitalism is the most viable option as an economic system for a free society. He believes this due to the fact that it is possible for the state to be a coercive agent, which inhibits the most basic of human rights: freedom. Because of this, he does not think the state should interfere in economic processes. The sentiment that free market capitalism is the most conducive for freedom, is flawed. It can be argued that the state can play an important role in economic processes that benefit the freedom of society …show more content…
Classical liberalism cannot prevent industries from employing unethical business practices. The classical liberal view is that the state exists to protect property and the right not to be interfered with by one another. Classical liberalism in theory, should maximize efficiency and wealth due to the laws of supply and demand, but classical liberalism does not take into account the efficiency lost by industrial collusion and industrial malfeasance despite wealth remaining constant. An example of this would be the Enron scandal in the early part of the millennium. Power services were starting to be deregulated by certain states in the United States during the late 1990’s and many private energy companies hoped to enter into the market. Enron was an American energy and services company who took advantage of this in California. When the United States government deregulated the sale of natural gas and energy services, Enron was able to sell energy at higher prices, which resulted in public outcry due to price volatility. Enron purposely shut down power plants and decreased power supply in order to drive demand up, and the price of energy skyrocketed much to their benefit. Lobbying by Enron prevented any corrective regulation from occurring. Without any regulation to prevent them from changing prices at their will, Enron managed to accrue a substantial amount of revenue in a short …show more content…
Free market capitalism prioritizes monetary gain over the needs of society. In free market capitalism, there is a natural unemployment rate which is 4.8% in the United States. This means that even if the economy is expanding at its greatest potential, there are always going to be people who are unemployed. Economics dictates that there are going to be winners and there are going to be losers, but free market capitalism begins with predetermined losers. The predetermined losers that free market capitalism produces are going to be perpetually trapped in a cycle of poverty. This cycle has a tendency to last for generations with little hope of escape due to the rigidity of the socioeconomic ladder. Here, Hayek’s views align with the claims being
A common discussion within the political community is whether or not the state should have a role in its economy. Friedrich Hayek, a distinguished political philosopher, believes that free market capitalism is the most viable option as an economic system for a free society. He believes this due to the fact that it is possible for the state to be a coercive agent, which inhibits the most basic of human rights: freedom. Because of this, he does not think the state should interfere in economic processes. The sentiment that free market capitalism is the most conducive for freedom, is flawed. It can be argued that the state can play an important role in economic processes that benefit the freedom of society …show more content…
Classical liberalism cannot prevent industries from employing unethical business practices. The classical liberal view is that the state exists to protect property and the right not to be interfered with by one another. Classical liberalism in theory, should maximize efficiency and wealth due to the laws of supply and demand, but classical liberalism does not take into account the efficiency lost by industrial collusion and industrial malfeasance despite wealth remaining constant. An example of this would be the Enron scandal in the early part of the millennium. Power services were starting to be deregulated by certain states in the United States during the late 1990’s and many private energy companies hoped to enter into the market. Enron was an American energy and services company who took advantage of this in California. When the United States government deregulated the sale of natural gas and energy services, Enron was able to sell energy at higher prices, which resulted in public outcry due to price volatility. Enron purposely shut down power plants and decreased power supply in order to drive demand up, and the price of energy skyrocketed much to their benefit. Lobbying by Enron prevented any corrective regulation from occurring. Without any regulation to prevent them from changing prices at their will, Enron managed to accrue a substantial amount of revenue in a short …show more content…
Free market capitalism prioritizes monetary gain over the needs of society. In free market capitalism, there is a natural unemployment rate which is 4.8% in the United States. This means that even if the economy is expanding at its greatest potential, there are always going to be people who are unemployed. Economics dictates that there are going to be winners and there are going to be losers, but free market capitalism begins with predetermined losers. The predetermined losers that free market capitalism produces are going to be perpetually trapped in a cycle of poverty. This cycle has a tendency to last for generations with little hope of escape due to the rigidity of the socioeconomic ladder. Here, Hayek’s views align with the claims being