Free Markets Don't Just Benefit Corporations; The Consumer Profits Too

...That a profit exists on both sides of a free market transaction has profound implications.

First, there is the free market’s primacy and the importance of it being allowed to flourish. If we want mutually profitable transactions, we must have one.

Second, government, or its failure, is the biggest impediment to free markets. Government is not the rectifier of unprofitable transactions, it is the cause. In its most extreme case, this happens under the very justification of adjusting resource allocation.

Third, if there is profit to both sides, there is no imbalance to rebalance. Instead, rebalancing actions are more likely to unbalance the economic system. Profit redirected from the producer only serves to slow reinvestment and the attraction of competing capital into a good’s production. Both serve to lower future purchaser profit.

If government wishes to pursue policies encouraging particular outcomes, that is politics’ prerogative in a democracy. However, it should not be done in the name of either economics or fairness, but as the politics it is.

Becoming lost in politics is akin to becoming lost while traveling. Both come from leaving the route we should have taken. The sooner the mistake, the more lost we become.

So in this case, and sadly so often, it happens when politics tries to follow economics. In the misperception of undue profit, it happens at the very origin: the free market transaction. We have veered far into political justifications for programs that have no justification – as too many commonly misbelieve – in the free market transaction itself. We are indeed lost. It is well past time to consult our economic roadmap and go back to the starting point.

http://www.forbes.com/sites/realspi...enefit-corporations-the-consumer-profits-too/