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Post by cjm on May 28, 2015 17:06:21 GMT
Nothing new about this really. Businesses have a natural tendency to come together and control supplies and prices. Although capitalism is about freedom it also has a set of rules to the effect that thou shalt not interfere with the natural processes of the market. Most of the time it is difficult for an individual firm to control markets, but when it happens, it should be subject to control. Sermon over! www.bdlive.co.za/opinion/columnists/2015/05/27/capitalists-show-little-faith-in-free-enterprise |
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Post by Trog on May 28, 2015 17:11:50 GMT
Although capitalism is about freedom it also has a set of rules to the effect that thou shalt not interfere with the natural processes of the market. Most of the time it is difficult for an individual firm to control markets, but when it happens, it should be subject to control. Sermon over! Absolutely! That also sets the limit to which the state is allowed to interfere in the economy. |
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Post by cjm on May 28, 2015 17:56:03 GMT
Absolutely! That also sets the limit to which the state is allowed to interfere in the economy. An aspect which intrigues me is the extent to which the law of contract is anti-capitalist. Some background. Our common law roots tell us that at the basis of the law of contract is the freedom to contract. The rise of Christianity has had a major hand in establishing the principle that people are generally bound to all agreements seriously concluded. In the classical Roman Law, this was not so. There were certain categories of contract (with lots of formalities) and if an agreement could not be cast into a category, it was not binding. The modern law of contract has been moving away from the position that all agreements seriously entered into are binding. In fact, in a sense we are moving to what might be described as the primitive Roman Law in this regard. From a theoretical capitalist point of view, one would like a system where contracts could easily be evaded. The reason? If I can get a better price for my produce after concluding a contract with you, it would aid the functioning of the market, if I could ignore my contract with you and deliver to the highest bidder. In economic jargon resources would flow to where the biggest demand is. Scare resources would be better distributed. The Christian development (all agreements binding) in fact worked against capitalism in this regard. An aberration used to be that contracts in restraint of trade were prima facie void. So in other words this aberration aided the free markets of capitalism. This now has changed and ironically again goes contrary to the direction contract is moving in - making binding contracts harder to enter into. This just by the way. Other economic aspects come into play as well. Contracts ensure some sort of certainty (contributing to "perfect knowledge" as it is known in economics). If agreements are not binding at all, one can assume that the business environment would be very difficult to negotiate as the delivery of ordered supplies (for example) would never be certain. The chance always exists that between the order and the delivery, someone else might offer a higher price. However, by and large, a system relaxing the traditional stranglehold of the contract on subsequent conduct would seem to assist capitalism and free trade. This in fact is what has happened in the west and (SA) but under the mistaken impression that this is a more "socialist" approach!! |
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