Your comment seems to make the case that markets are competitive whereas governments are monopolistic. I feel reluctant to buy into that without an authoritative statistical study. My experience, though anecdotal, does not lean in that direction significantly enough.
On the other hand scholars[1] have argued that much of the first world have made the bulk of their progress in very protectionist environments and have opened their markets selectively when it was to their advantage. I havent seen those arguments debunked effectively. The notion of "free"ness of current markets is also debatable given that it is guarded strongly by international politics.
Mathematically speaking, I do not recollect that free markets guarantee equity as has been claimed in some comments here. They do guarantee an equilibrium, which however need not be a good/desirable one.(Think traffic flow without signals).
I am not against free markets, I think thats perhaps the best option available, but as long as it remains easy to externalize costs, it will continue to remain broken. Because what you are paying is only part of the cost and someone else is being forced to pick up the tab.
I believe free markets are competitive and hobbled markets are not and non-voluntary government is monopolistic.
When our activities impose costs on others, that should be remedied. If my making a buck creates a nickel's worth of pollution damage to you, I should be made to pay that nickel.
That doesn't make a market less free, as one has the right to be free of the pollution of others too. A "free" market recognizes the rights of all involved.
And it actually makes markets more efficient. If I am making a buck and it costs you $5 in pollution, an efficient market sends me a clear signal to stop.
But it seems to me that government is more in the business of shifting benefits to some for political purposes and shifting costs to its opponents. And that is not helping protect anybody's rights.
Apart from your first sentence, I completely agree with everything you said. My disagreement with your first is a partial one. What you describe is an ideal almost mythical free market. In such a market your arguments would hold true, if it existed.
The key here is as you said "I should be made to pay that nickel". Unfortunately free market forces alone will not make you do that. It will be in your interest to hold on to that nickel. It is here the free market proponents invoke goodness of human kind or some other force or argument external to the free market principles.
Another problem with the practice of free market is that corporations are typically structured to maximize, not the total value out of a resource, but the rate, i.e. the value extracted per unit time. It makes perfect sense for them because for several reasons (and also by way of force) they can keep the acquisition cost of a substitute resource very low.
Governments arent ideal either. But a (democratic) government is shaped by the amount of active interest a voter takes. So the control over it is much more direct in comparison.
Sans the two major loop-holes, free market is a damn good system.
On the other hand scholars[1] have argued that much of the first world have made the bulk of their progress in very protectionist environments and have opened their markets selectively when it was to their advantage. I havent seen those arguments debunked effectively. The notion of "free"ness of current markets is also debatable given that it is guarded strongly by international politics.
Mathematically speaking, I do not recollect that free markets guarantee equity as has been claimed in some comments here. They do guarantee an equilibrium, which however need not be a good/desirable one.(Think traffic flow without signals).
I am not against free markets, I think thats perhaps the best option available, but as long as it remains easy to externalize costs, it will continue to remain broken. Because what you are paying is only part of the cost and someone else is being forced to pick up the tab.
[1] http://en.wikipedia.org/wiki/Ha-Joon_Chang