Question 1-Is power a problem in market-based economies?
Globalization has led to a revolution in industrial economies. The cases of enhanced economic powers have led to the markets we have today being unequal. This influence has been caused by the numerous organizations which have remained the sole monopolies of the market. This has enabled these organizations to remain the sole controllers of the market flow hence hindering the necessity of establishment of free trade. This has made the monopolistic firms continue their operations with so much power and authority of the very markets they operate from. Power has proved out to be a problem in the market based economies because the monopolistic firms have managed to let their effect felt by taking advantage of their employees, influencing the decisions of the governments and their policies related to the public, limiting the chances of survival of substitute producing corporations hence making the markets from which they operate solemnly depending on them.
Milton Friedman argues that market monopolies have a tendency of limiting the customers from having a diverse market and the presence of alternative goods. He goes ahead to state that a market has a role of permitting unanimity without the presence of any conformity. This implies that there should be proportional representation in the market. However, due to the presence of monopolies, the market have been subjected to a good measure of conformity. This has led limitation of the variety of groups that can be represented within any given market system. Friedman argues that unanimity has led to the development of the majority rule. By stating this he implies that majority rule has proved to be expedient and a system where the individuals in it must conform to the seriousness of the given issue at hand.
Robert Heilbroner also voices his concern regarding market-based economies. He says that in most cases it characterized by very strong government intervention. This resulted in cases of monopoly hence greatly affecting the market-based economies. This has led to issues like commoditization of the available labor power. This has also caused a great effect on the merger policy that these firms exercise. In the presence of a monopolistic market, there are always very limited chances and allowance for research to be conducted on research and the necessity of development. In this case, the profits always prove to be the end goal of the market structure. This implies that in the instance when the capital has gone up then the profit increases and hence more money is absorbed into the capital. Furthermore, there is a tendency for capital growth to have a fundamental aim for the market system.
Friedman Tom argues that power in market-based economies leads to unavailability of social responsibility. He continues by stating that, when a corporation is operating within a market that it is the monopoly, there is a tendency that the firm will mainly have a focus on the profits it makes other than on the community that it serves. This is because of the possibility of a monopolistic market promoting the spirit of capitalism. This is a market structure where the market is one that is referred to as a free market. He concludes by stating that, capitalism is where the available capital, has been privately owned by a given group of market members.
In conclusion, this gives a direct proof that power can prove very detrimental to any economy that is market-based. If any country wants to ensure that there is no monopolization of the market then it must first ensure that its government has set in place proper constraints that will be fundamental in ensuring the control of the market system that is in place. It will only be after the establishment of the constraints that the government will be sure of taking proper control of the markets. This will bring an end to any presence of exploitation within the market by any given organization hence bring free trade.
Does current economy/market system works well to redistribute the wealth? Does it help to increase the equality? Make better society? Any class conflicts?
The goal of any market system is always to ensure that the members of the system are able to satisfy their very basic needs. There are several aspects of the current economy that are geared towards ensuring that the available wealth is evenly distributed among the members of the society. Somme of the areas in which the society has strived to ensure that there is equal distribution of wealth include:
The division of labor is one of the driving factors for ensuring that wealth is equally distributed. Karl Marx characterizes division of labor by several factors that are fundamental to it being successful. It is responsible for ensuring that economic growth is driven high. This leads to increased standard of living among a given members of the community. Division of labor has also been characterized with resulting to the specialization of jobs by the employees of the given tasks. Karl Marx argues that specialization of labor is as a result of the employees being subjected to carrying out repetitive work. Division of labor has also been long associated with ensuring the progress of industrialization. Karl Marx concludes by stating that, this has led to the rampant spread of the available resources and wealth across several areas.
According to David Ricardo, there are some other aspects of the social and economic class that have acted as driving forces towards ensuring that there is an equal distribution of wealth. For a very long time, there has been relationship given between the relationships that technical necessity and social control has to the power, the class status, and hierarchy. Ricardo concludes by noting that, the three mentioned status are very fundamental in ensuring that there is an equal distribution of wealth within any given society.
According to Adam Smith, there are other aspects that are also directly responsible for distribution of wealth. They include the issues pertaining to Fordism and Post-Fordism like that which was seen in the period of between 1940 and 1970. Fordism was the period associated with the presence of factories that could produce goods in large numbers. When this was coupled up with the availability of standardized goods then there was proper distribution of wealth within the society. Furthermore, Smith notes that division of labor was assisted with the availability of very large factories that were able to support vertical integration. Furthermore, the fact that the laborers were also the customers of the very good, was a driving force too.
On the contrary, there are several other factors that have a serious effect on the ability of a proper distribution of wealth. These include the issues pertaining to productions that were done in small batches. Karl Marx continues to state that, the presence of specialized firms and those which were flexible is one of the factors that can greatly hinder the progress of having a society with equally distributed wealth. The issues of having separated production and consumption are also one of the factors that can negatively hinder distribution of wealth.
From above, it can be pompously be concluded that the current market system has greatly worked in favor of having a properly distributed wealth. This has been widely supported by the availability of the division of labor in the society today. Hence, if the leadership of any given society wants the area of its jurisdiction to be equally distributed, the only thing it has to work for is to ensure that there is proper division of labor within the given society.