Instigator / Pro
Novice's avatar
14
Novice
1597
rating
22
debates
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Topic
#3389

Free Market based systems of economics are on balance, better off for countries.

Status
Finished

The debate is finished. The distribution of the voting points and the winner are presented below.

Winner & statistics
Better arguments
6
0
Better sources
4
4
Better legibility
2
2
Better conduct
2
0

After 2 votes and with 8 points ahead, the winner is...

Novice
Tags
Economics
Parameters
Publication date
Last updated date
Type
Standard
Number of rounds
3
Time for argument
Two days
Max argument characters
10,000
Voting period
One month
Point system
Multiple criterions
Voting system
Open
Contender / Con
Aowdd's avatar
6
Aowdd
1458
rating
7
debates
21.43%
won
Description

Free Market: an economic system in which prices are determined by unrestricted competition between privately owned businesses.

The free market is an economic system based on supply and demand with little or no government control. It is a summary description of all voluntary exchanges that take place in a given economic environment. Free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions

Round 1
Novice's avatar
Novice
Pro
#1
RESOLVED: Free Market based systems of economics are on balance, better off for countries.

FRAMEWORK
  • Free Market: As EconLib states: "free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. (1). 
  • As renowned Economist Paul Krugman states: "A free market economy is governed solely by the principle of voluntary exchange and the law of supply and demand" (2). 

  • Better: of a more excellent or effective type or quality.

OV1
  • The Free Market system is perhaps the best system of economic trade and interaction. In this round, I will build the basics of my case and expand on my points as well as rebut CON in the second round. 
  • My argument is simple quite frankly as I believe what is resolved today to be a matter of fact. On balance, the free-market system creates wealth and improves countries. 

  • According to the competitive enterprise institute: 
Over the years it has proven to be an incredibly robust prediction of how prosperous countries are or will become. The Fraser Institute has found that countries with institutions and policies more consistent with economic freedom have higher levels of income, more rapid economic growth, and a greater reduction in poverty rates. For example, in 2015, nations in the top quartile of economic freedom had an average adjusted per capita GDP of over $40,000, compared to around $5,000 for bottom quartile nations. Further, there is a strong correlation between prosperity and economic freedom even for the poorest nations. Out of the poorest 20 percent of countries, those with greater economic freedom have incomes that are 50 percent greater than those with less economic freedom (3). 

  • According to Catalyst
The good fortunes of most can be traced to the free exchange of goods and services for mutual gain. While an imperfect system, capitalism remains our most effective weapon in fighting extreme poverty. As we’ve seen across continents, the freer an economy becomes, the less likely its people are to become entrapped in extreme poverty.
This can be corroborated by tracking the rise of “economic freedom,” which is related to the openness of a country’s markets and corresponding increases in living standards. Over the past 25 years, the global average economic freedom score—as calculated by the right-leaning Heritage Foundation—has increased by 3.2 percentage points, with many countries joining the ranks of at least the “moderately free” (4). 

  • What is the pattern here? As countries become more economically free and have freer markets they tend to reduce poverty, become more productive, and improve the general standard of living and prosperity. There is a reason why virtually every developed/core country has a free market economic system.   
  • We will expand on each of these ideas in the next round, but consider them as we move on. 
  • Now to CON. 

SOURCES
  1. https://www.econlib.org/library/Enc/FreeMarket.html (Free Market)
  2. https://www.masterclass.com/articles/free-market (Free Market - Paul Krugman) 
  3. https://cei.org/blog/why-economic-freedom-is-the-best-weapon-against-poverty/
  4. https://catalyst.independent.org/2019/06/14/capitalism-remains-the-best-way-to-combat-extreme-poverty/


Aowdd's avatar
Aowdd
Con
#2
Definition of a Free Market:

"In economics, a free market is a system in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market without market coercions. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority other than those interventions which are made to prohibit market coercions."


 
My argument is simple, Free Market systems are not, overall, the best economies in the world, and/or do not provide the best life-situations for their citizens, and more restricted or regulated economies seem to be better, generally.
 
Over-restriction can be bad, I’d probably agree with the opponent on that, but not economies that have no restrictions on them. That also seems bad to me.
 
First, to go over what my opponent has said, then to move onto my argument and evidence for this.
 
Opponent:
 
“The Free Market system is perhaps the best system of economic trade and interaction.”
 
There are no countries, currently, that have the Free Market system as their system of economic trade and interaction. All countries have some form of regulation.
 
Singapore has the highest economic freedom score in the world, with an 84.4. This means they are not a Free Market system, they are a Regulated Market.
If you want to say that Regulated Markets with higher degrees of economic freedom are the best economic systems on the planet, then, by all means, make that argument.

Or, if you want to say that Free Markets would be better than Regulated Markets, then make that argument.

But that’s not your argument.

You can’t say Free Markets are the best, because they don’t exist.
 
One of your closing lines:
 
“There is a reason why virtually every developed/core country has a free market economic system.”
 
Literally no country has a Free Market system.
 
So, that’s most of your argument right there.

Moving right along.
 
A quote from your Competitive Enterprise Institute source:
 
“Over the years it has proven to be an incredibly robust prediction of how prosperous countries are or will become. The Fraser Institute has found that countries with institutions and policies more consistent with economic freedom have higher levels of income, more rapid economic growth, and a greater reduction in poverty rates.”
 
While this is true broadly, this is not true relative to countries with the highest economies. Another way to put this: increasing levels of economic freedom have diminishing returns, so, once a nation’s economy reaches a certain size, it benefits from having more regulation.
 
The United States of America has the largest economy in the world, and yet it is ranked 25th in the Heritage Index of Economic Freedom, with a score of 72.1.
 
Singapore, with the highest Economic Freedom score, is ranked 38 in world GDP. It has the most free economy, yet is a full  23 ranks behind Mexico in GDP, at rank 15, which is the 67th most economically free country in the world. Ireland has the 3rd most free economy, and yet they have the 28th largest GDP.
 
And, honestly, I’m gonna call this round right here, because I don’t know what the opponent can even do at this point.  I think this is a wrap, but I wanna see what they’re going to say.

Free Market systems don't exist. Regulated Market systems do.

Regulated Capitalist Economies are best for the planet, and that can be measurably proven.

Free Market Economies don't exist.

On top of that, the freer an economy is does not seem to have a correlation with the better an economy is, except at the lower half of the distribution (so, like, third world countries with extreme rates of violence, poverty and so forth).
 
That's what I got.

Good luck.


Round 2
Novice's avatar
Novice
Pro
#3
  • Unfortunately, CON's whole argument seems to boil down to a semantic objection to the term free market, and we can get to addressing that. 

FRAMEWORK
  • based: have as the foundation for (something); use as a point from which (something) can develop. [oxford languges]
  • If one thing is based on another, it is developed from it: [2].

  • CON makes the case that there is no free market economy system. 
  • However, this would be true if CON had argued that there are no pure free-market systems, however. 
  • The key is the word pure here. A pure free market would have no state intervention and rely only or entirely on private interactions. 
  • However, I specifically made the resolution "Free Market based systems of economics are on balance, better off for countries" to specify that we aren't necessarily talking about pure free markets but economic systems that are based on the voluntary exchange principles of the free market even if they have some levels of government intervention. 
  • Ultimately, an economic system can be based on a certain 

I think the economic source Ivestopedia best illustrates this in a way that is relevant to the resolution. According to them:
  • The term “free market” is sometimes used as a synonym for laissez-faire capitalism. When most people discuss the “free market,” they mean an economy with unobstructed competition and only private transactions between buyers and sellers. However, a more inclusive definition should include any voluntary economic activity so long as it is not controlled by coercive central authorities. Using this description, laissez-faire capitalism and voluntary socialism are each examples of a free market, even though the latter includes common ownership of the means of production. The critical feature is the absence of coercive impositions or restrictions regarding economic activity.1 Coercion may only take place in a free market by prior mutual agreement in a voluntary contract, such as contractual remedies enforced by tort law [1].


CON says "Free Market systems don't exist. Regulated Market systems do"
  • But what CON means is that pure free markets don't exist. 
  • This does not preclude that free market-based economies that feature the principles of a free market system are a mixed capitalist economy don't exist and this is exactly what we are debating. Whether these economic systems are better off for countries on balance.

====
  • Moving on to CON's arguments
While this is true broadly, this is not true relative to countries with the highest economies. Another way to put this: increasing levels of economic freedom have diminishing returns, so, once a nation’s economy reaches a certain size, it benefits from having more regulation.
  • Any country has diminishing marginal returns as it develops. This is just a law of economics. Obviously, as you develop from a lower stage, you will less overall development progressively because you keep improving to a higher stage of development. You don't show how this is a bad thing, and it really is not. 
  • As I pointed out in round one; free market-based systems and economic freedom are the best ways to develop and reach these stages

  • Lastly, my opponent mentions GDP as an argument for why freer countries arent better but larger countries almost always have more GDP. The way we can compare is by looking at GDP per capita which Singapore's is over 50,00 and Mexico is around 8000
  • https://www.worldometers.info/gdp/gdp-per-capita/



  1. https://www.investopedia.com/terms/f/freemarket.asp
  2. https://dictionary.cambridge.org/us/dictionary/english/based


Aowdd's avatar
Aowdd
Con
#4
Considering your entire argument on Free Markets revolved around, basically just saying Free Markets are amazing, everything good on this God-forsaken planet comes from Free Markets, the Sun orbits around Free Markets and so forth, I felt the main argument I needed to make was that Free Markets aren't real. They don't exist, not how you envision them, I think. This doesn't make it a semantic argument, this makes it an argument of fact.

Now, we can move the goal post using your new framework of “the foundation of something” and “point from which something can develop”, but that still doesn’t help your case.

Our current economic system can find it’s roots in European Mercantilism. Mercantilism and Merchant Capitalism emerged in the 16th and 17th century, and was characterized by countries (most, if not all, were still monarchies) contracting or giving out charters for groups to do trade with other countries, as well as the dreaded colonialization.

When people talk about how our economies/governments are founded on colonialization, what they're talking about is Merchant Capitalism, and how countries would take over other countries, force them to trade with them, force them to become a part of their routes, convert parts of their militaries into theirs, stuff like that. Forcible takeover by monarch-run trading companies in the name of selling stuff to other countries.

To put a finer point on this, mercantilism is not Free Market economics. Trading companies would chartered by royal families, then go trade with other countries, while the militaries of these countries were setting up colonies there by which they could exert control over the people's of that country.

Then, along came the Industrial Revolution. We still had slaves at this time, that was still a major facet of many economies, but, in particular, of the United States economy. However, from the Industrial Revolution, we got Capitalism. And there might have been a point at which this form of Capitalism could have been called, "Free Market", but then we started developing worker's rights and unions, and we abolished slavery, and the markets became more and more regulated. However, even this brief period of Free Markets was probably not a "Pure" Free Market, even if it was close.


This is what our economies have their foundation in. This is what our current economy is based on. Centralized authorities making economic decisions for their countries, chartering trade companies to go around the world to buy and sell goods, all the while relying on slave labor, forced coercion of non-native countries by military colonization, and a labor pool that had little to no labor rights.

That is what our current economic systems are based in.
 
So, my argument was not a semantic argument.
 
It was an argument of fact. Free Market economies have never existed. What has existed have been Regulated Capitalist Markets, which evolved from something like Monarchical Command Economies mixed with Oligarchies.

Our economies cannot be based off of or emergent from something that hasn’t existed.
 
You would have to say, “Regulated Mercantilism-Based Capitalist Economies” are the best economies for the world. Originating from a mix of centralized government-controlled economics and largely nepotistic oligarchies, Regulated Mercantilism-Based Capitalist Economies have brought wealth and prosperity to the world through their combined use of planned economies, monopolized industry, colonization and use of violence to maintain social order.
 
Have you ever heard of the term Double Speak?
 
The term “Free Market”, if that’s what you would call the origins of our modern economies, would be an example of Double Speak. And to continue to call what we have as “Free Market” would be Double Speak.

However, if you just acknowledge the fact that what we have now and the economies that gave rise to what we have now are different from Free Market economies, then maybe we can have a different discussion.

So, now. My question becomes: "Would you like to continue arguing that Free Market systems have accounted for our current economic prosperity, or would you like to argue why a Free Market system would be better than a Regulated Market system."

Considering your argument so far has been that Free Market systems have been responsible for the increase of wealth and and well-being across the world, and I just demonstrated that this hasn't been the case, I might turn a blind eye to a pivot in conversation (just this once though).



Now, to briefly run through a number of other things you've argued or mentioned.

"
I think the economic source Investopedia best illustrates this in a way that is relevant to the resolution. According to them:
  • The term “free market” is sometimes used as a synonym for laissez-faire capitalism. When most people discuss the “free market,” they mean an economy with unobstructed competition and only private transactions between buyers and sellers. However, a more inclusive definition should include any voluntary economic activity so long as it is not controlled by coercive central authorities. Using this description, laissez-faire capitalism and voluntary socialism are each examples of a free market, even though the latter includes common ownership of the means of production. The critical feature is the absence of coercive impositions or restrictions regarding economic activity.1 Coercion may only take place in a free market by prior mutual agreement in a voluntary contract, such as contractual remedies enforced by tort law [1].
"

Can you tell me when we didn't have coercive forces or impositions, or when we didn't have restrictions on economic activity?

Was it before or after slavery? And did we have economic freedom during the Great Depression, WWII or the Cold War and Red Scare? When we started invading countries for their oil, would you call that a Free Market economy?


"CON says "Free Market systems don't exist. Regulated Market systems do"
"But what CON means is that pure free markets don't exist."

I do sometimes have difficulty articulating myself in conversation, so I will clarify what I meant to say:

Free Market systems don't exist. Regulated Market systems do.


"
  • Moving on to CON's arguments
While this is true broadly, this is not true relative to countries with the highest economies. Another way to put this: increasing levels of economic freedom have diminishing returns, so, once a nation’s economy reaches a certain size, it benefits from having more regulation.
  • Any country has diminishing marginal returns as it develops. This is just a law of economics. Obviously, as you develop from a lower stage, you will less overall development progressively because you keep improving to a higher stage of development. You don't show how this is a bad thing, and it really is not. 
"

I never said it was a bad thing. The point here is that economic freedom and higher economy prosperity don't always correlate, especially at the higher ends of economies.

"
  • As I pointed out in round one; free market-based systems and economic freedom are the best ways to develop and reach these stages
"

I've shown this isn't the case. We got here because of Merchant Capitalism, Centralized Government Economics, Colonialization, a Lack of Worker's Rights and Slavery. And then the Industrial Revolution and Capitalism (but we still had a lot of the other things for a while, too).

"
  • Lastly, my opponent mentions GDP as an argument for why freer countries aren't better but larger countries almost always have more GDP. The way we can compare is by looking at GDP per capita which Singapore's is over 50,00 and Mexico is around 8000
  • https://www.worldometers.info/gdp/gdp-per-capita/
"

I'm sure we could discuss the specifics of GDP Per Capita, and I'm sure we would find there is still a lack of a strong correlation between GDP Per Capita and Economic freedom in the upper quartile or so of the global economies.

However, there's a lot more that needs to be discussed here, and I think we need to pick which hill one of us is going to die on in Round Three.

Do Free Market Economies actually exist?
or
Would a Free Market Economy be better than our current Regulated Mercantile-Based Capitalist Economy?
Round 3
Novice's avatar
Novice
Pro
#5
NOTES
  • Sourcing: CON makes many claims and simply dumps a list of sources for all of them afterward so it is a little difficult to tell which source is for which specific piece of information

To reiterate a point from round two:
  • CON compares the GDP of Mexico and Singapore thinking that because Mexico has a higher GDP they are...better off?
  • According to economic source, Investopedia: "Per capita GDP is a global measure for gauging the prosperity of nations and is used by economists, along with GDP, to analyze the prosperity of a country based on its economic growth" [1]. 
  • According to cis.org (center of immigration studies): "To be sure, a larger population almost always results in a larger aggregate economy. More workers, more consumers, and more government spending will make for a larger GDP. But the standard of living in a country is determined by per capita (i.e., per person) GDP, not the overall size of the economy" [2].
  • Signapore has a GDP per cpaita of 59,797.75 USD (2020). Mexico has a GDP per capita of 8,346.70 USD (2020). [world bank provided by Google] [3]. 


PURE FREE MARKET vs FREE MARKET BASED
  • CON makes a false dichotomy between a slightly regulated market economic system is and what is a free market-based system. Simpy, a free-market base system is based on the principles of a free market. As I have proven this includes lassiez-faire economic systems as well which are prevalent in Europe as we will point out. 

MINOR POINT REBUTTALS
Considering your entire argument on Free Markets revolved around, basically just saying Free Markets are amazing, everything good on this God-forsaken planet comes from Free Markets, the Sun orbits around Free Markets, and so forth
  • I would have to agree that Free Market based systems are amazing which is what the entire resolution is about because of the amount of economic prosperity they have brought to regions of the world.

I felt the main argument I needed to make was that Free Markets aren't real. They don't exist, not how you envision them, I think. This doesn't make it a semantic argument, this makes it an argument of fact.
  • It's semantic in the sense that you are arguing what the words free market mean in a sense of what a pure free market is. Granted I did not define "based" in my round ot but I believe it was such an obvious word it didn't need a definition. 

MAJOR POINR REBUTTALS
"Now, we can move the goal post using your new framework of “the foundation of something” and “point from which something can develop”, but that still doesn’t help your case."
  • CON accepts the framework of the debate, but to address some points:
  • It is not a "new" framework because this was directly in the resolution and It is not moving the goalposts if this was stated in the resolution, to begin with. 

"Our current economic system can find its roots in European Mercantilism..."
  • By "our" I have no idea what my opponent is referring to. You have to be more specific than that and name an actual country. The assumption seems to be that we are speaking about one specific area or what we live in the same country? 
      • It makes it impossible to respond to this claim in a specific way. 
      • Mercantilism according to Britannica "promoted governmental regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers" [6]. So it is a largely defunct system and according to The Canadian Encyvolopediia "fell out of favor as an economic theory beginning in the late 18th century" [7].
  • I think it's fair to interpret that you are referring to a general modern/current system of economics based on the free market. Your argument is moot. Mercantilism may have been a feature in history, but modern economic systems in developed countries arent based upon it because they don't operate with it as a foundational principle. 
  • Their foundation is simply the principles of voluntary exchange, low levels of government regulation, free enterprise, and more lassiez-faire capitalism. We will get more into this later


Can you tell me when we didn't have coercive forces or impositions, or when we didn't have restrictions on economic activity?
  • First I will break down the statement then I will respond to the question. 
    • in response to the Investopedia quote I used to establish a better idea of what it means to be "based" in a free market, CON does not dispute that free-market systems can include laissez-faire capitalist economies. Consider this point dropped. 
    • The Investopedia quote specifically states a "more inclusive definition should include any voluntary economic activity so long as it is not c." So the quote does not say anything about mere restrictions, but control by a coercive central authority such as the North Korean system which is a centralized command economy.
    • Even pure Free markets themselves can have restrictions. As Investopedia states in their definition "little or no government control." 
  • Now to answer after getting through the incoherent elements I will rephrase it as "can you tell me when we didn't have an economy controlled by coercive central authorities"
    • Sure, simply for as long as we did not have slavery or a command economy. 


Was it before or after slavery? And did we have economic freedom during the Great Depression, WWII or the Cold War and Red Scare? When we started invading countries for their oil, would you call that a Free Market economy?
  • I would agree that slavery is the opposite of a free market-based system. 
  • As Investopedia states from my round one sources, free markets consist of voluntary economic interactions.
  • Slaves were not allowed to voluntarily trade their labor, they were forced to submit their labor. Therefore, slavery is antithetical to the free market. Perhaps closer to soviet union communism if anything. As Wikipedia states about the Soviet Regime "In the years that followed, under the communist regime, the government began taking rights and enforcing new policies of forced labor."
  • So really so long as slavery does not exist in a state-sanctioned way, which was around the 1870s/80s. 

  • The "red scare" doesn't say anything specific about the economy, so I am confused about that. 
  • The "cold war" doesn't say anything specific about what type of command control of economic freedom you are referring to. Give some specific points, otherwise, I dont think you understand what you are saying. 

  • Lastly, slavery was not the cause of economic growth. As digital hustory states "although slavery was highly profitable, it had a negative impact on the southern economy. It impeded the development of industry and cities and contributed to high debts, soil exhaustion, and a lack of technological innovation" [8].


I never said it was a bad thing. The point here is that economic freedom and higher economy prosperity don't always correlate, especially at the higher ends of economies.
  • CON admits there is nothing inherently bad with diminishing returns and I agree. If anything they are good because as countries keep improving they need less improvement progressively. 
  • How do countries improve
  • The argument is that free market-based systems of voluntary exchange are what bring countries to prosperity. 

I'm sure we could discuss the specifics of GDP Per Capita, and I'm sure we would find there is still a lack of a strong correlation between GDP Per Capita and Economic freedom in the upper quartile or so of the global economies.
  • CON seemingly does not defend their bad argument based on the GDP of Mexico meaning they concede/drop my rebuttal on GDP per capita.
  • Saying "I'm sure we would find" isn't an argument. It means nothing. 
  • Contrary to the latter point, according to Cato: "Nations in the top quartile of economic freedom had an average per capita GDP of US$50,619 in 2019, compared to $5,911 for bottom quartile nations" [4]. So there is a very strong correlation between these free market-based systems and higher GDP per capita. 


CONCLUSION
  • CON has not sufficiently challenged the resolution
  • CON drops the argument from GDP per capita
  • CON has not shown a single way that economies based on the free market are not better off for countries.

SOURCES
  1. https://www.investopedia.com/terms/p/per-capita-gdp.asp
  2. https://cis.org/Camarota/There-No-Evidence-Population-Growth-Drives-Capita-Economic-Growth-Developed-Economies
  3. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=MX
  4. https://www.cato.org/economic-freedom-world/2021#:~:text=Nations%20in%20the%20top%20quartile,in%20the%20least%20free%20nations.
  5. https://www.investopedia.com/terms/f/freemarket.asp
  6. https://www.britannica.com/topic/mercantilism#:~:text=mercantilism
  7. https://www.thecanadianencyclopedia.ca/en/article/mercantilism
  8. https://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=2&psid=3558#:~:text=Although%20slavery%20was%20highly%20profitable,a%20lack%20of%20technological%20innovation.


Aowdd's avatar
Aowdd
Con
#6
Forfeited