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Originally Posted by oil
So if we just did away with protectionism and anti trust laws we wouldn't need to worry about worker exploitation because the magic of the market would just produce an indefinate amount of "good" jobs?
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No. Because perfect markets along the lines of what free market capitalism would require are a text book mirage that cannot happen in a real world in where people are driven by Shiller/Akerlof'ish animal spirits.
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Well they at least partly are. Unless you're suggesting laissez faire would result in everyone being paid the same.
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Adam Smith's theory would result in converging income differences through competition. Alas, even Smith himself wasn't crazy enough to believe a free market capitalism without any government intervention (see: property rights, law, military in Smith's the wealth of nations etc.).
Because leverage (financial or military) exists, and will always exist, and there will be people who do not behave rationally, and people who pursue political goals that don't make economic sense, the idea of a free market capitalism in a global world is simply not going to materialize.
It's vastly pointless to blame the lower class getting spanked on a financial system when the cause truly is human bestiality. Soviet Union had an attempt at "socialism", but in fact the communistic system they had glorified the leveraged people (communist party leadership) at the cost of the lower class people.