Dynamite Economy 4.4 Freeing Up Free Market[1]

Oct 28, 2008
Solvere Lim
Cognose.blogspot.com
CtS Cognoscere tenus Solvere @ www.cts-ideas.com
察觉于发生之前 Cognize before Happening
解决于根基之处 Solving beyond Root Cause

Nationalized businesses are deemed unpopular - because the able, articulate are deprived of chances of operating key businesses - big, ever-green, all penetrating, businesses.

But when business turns sour, it is these people demanding bail out from the states.
Again, this underlined when it concerns personal benefit, wisdom, actions comes earlier.

Is there mechanism to ensure private operators maximize efficiency over maximizing profits to further interest of public? – None.
How many nations seen the tariff dropped after privatize?
Singapore has two private operators operating the Mass Transit Railways.
A while after into operations, the wise leader Lee Kuan Yew questioned:
Where is the competition when they are operating on two different corridors?
Where is the economy of scale when similar machineries are operated, maintained by two entities?

In general, even after privatized, private operators asked for deregulations.
After deregulation, we face a monster of troubles that even states by themselves cannot contain, even the world cooperated together, cannot overcome.

Nationalized and Privatized are just white and black cats – both share chances of successes, failures.
Nationalized can be examined by domestic voters and international observers.
Private Enterprises, not only we do not know who actually committed the act, very often what is the cause also cannot be made certain – as this instant of financial crisis speak loud at our face.
Many a time, the government lost competence in understanding the operations.
“ Is government capable to regulate?” Many bankers, even central bankers have asked aloud! [2]

When we are focusing on surface facts, without insight of market dynamics, without understanding the underlying purpose AND overall objectives - The swing between nationalized and privatized, regulated and free, monopoly and multiple operators will never come to any good answers!

The sole objective of free market economy is to improve Market Efficiency – from supply to demand.
The key factors are – improve economy of scale, reduce agency costs.
The bottlenecks are intermediaries.
The measurable are accountabilities, transparency, losses!

Only with such fundamental definition of the purpose of Free Market -
Can we really define and prioritize objectives, before policies, solutions can be formulated!


[1] Dynamite Economy 3.11 Approach - Finance Industry, sep 22, 2008, Cognose.blogspot.com
[2] It is widely known that even Fed believed bankers are better in assessment of market risk, etc.