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Free Markets and Captive Market Labor

The author of this piece is Nathan Nicholls. The original post can be read on Facebook if you have an account there.

     A market consists of supply, demand, providers and consumers. The business exchange rate in a free market is initially set by the provider and then either accepted or declined by the consumer who has the freedom to go elsewhere to meet their consumption need. The reason that the provider must set the initial rate is that they know the energy they apply and the compensation they must receive to stay in business. If the consumer were to actually set compensation for a given provision, the most likely outcome would be that the provision would cease because the consumer would naturally want to set the rate lower than the provider could provide it.

In a free market, the consumer does not set, but rather only affects the exchange rate through the freedom to shop for the most favorable rate within their market based on available supplies and the magnitude and immediacy of their demand. Through this consumer decision making, the most competitive provider is likely to be the most successful, unless they provide at a loss, in which case, the provider most likely eventually goes bankrupt which can cost the whole system money. Although honest providers would not likely do this, providing at a loss can run other providers that cannot sustain the equivalent loss out of the provision market. The nature of big business is that it has little or no element of compassion for the competition.

External elements can affect the market such as tax laws, legal privileges and wage dictatorships. We live in a market where many elements of business can be separated through legal privileges creating different forms of business. A corporation is a business that separates those who benefit from the provision of business, (Investors) from the risks of loss associated with business activity.  A person providing business services on their own takes full business risk and thus is at a decided disadvantage to the corporate investor even though they are actually doing the work that generates their own gain and the investor is not.

The privilege given to corporate investors enables the business they profit from to risk greater loss than the individual conducting business since the investors never take the risks. If the business fails, the most the investor loses is his or her investment. The business can file bankruptcy and the government, (tax payers) and market will pick up the costs.  Contrarily if a person conducting business on their own fails, they can loose everything they own and more. There are other advantages corporations (and their investors) enjoy that individuals doing business do not; corporations set the compensation rate of their employees based on the ability to give investors (who take no business risk) a gain. This is a wage dictatorship.

Through mechanizing, outsourcing, importing and keeping compensation in a market to a minimum, they can force the compensatory value of the market for human energy down below the market’s capacity to sustainl. The individual conducting business ultimately cannot compete. So as you should see, we do not live in a free market because advantage is given to the corporate form of business. We do not live in a free market because in a free market, the providers set the rate of exchange. In corporate employment, the laborers are the providers yet they do not set their rate of exchange, the corporation is the consumer and it sets the rate of exchange based on the ability to generate profit for investors.

That our labor system is not a free market system is obvious. That systemic reward for providers is arbitrarily based in favor of the sustained winnings of the mere gambler is also. So long as the class war enabled through this non-free market system is waged by investors through corporations against laborers, there will be no free market or wide spread economic prosperity. It is not that the politicians don’t understand this, they do. The allegiance to the money that is pumped through this abomination perpetuates a slave market for human labor. Capitalism is not the problem, corporate capitalism and its influence on government is the entire problem.


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