General Discussion
In reply to the discussion: There is not a single business owner in this country who got where they are 100% on their own [View all]PETRUS
(3,678 posts)Producing policy suggestions is one thing. Overcoming the political dominance of a small but powerful minority is another.
There is no shortage of policy ideas, many of which fit into the basic framework we already have and don't require significant changes to how we are organized politically and economically. I don't agree with you that "free markets" are inherently corrupt. They just don't function (or even exist) as advertised. People are corruptible, and it's important to guard against that. We must be aware of the incentives and disincentives and adjust them as needed. For example, a tiny financial transaction tax would remove the incentives for a fair amount of trading that is profitable for the traders but contributes nothing to the real economy.
By the way, the right wing is not in favor of free markets! At least not the politically empowered movers and shakers who lead what we call the right wing. They use that language because it resonates with the public. But when one looks at policy, it's clear they don't mean what they say.
So what would a market-oriented solution be like? Health care is an interesting place to look. The cost of health care is an enormous burden on individuals as well as the sole reason for projected future Federal budget deficits. There is no shortage of foreign-trained doctors who would like to come practice in America, but we artificially limit the supply. We do we design policies with the specific intention of creating global competition to drive down the price of manufactured goods but maintain (or increase, which is the reality with medicine) protections that keep the costs of health services high? We could coordinate with other countries so that they train physicians to US standards and let them come work here. In addition, we could allow (or require) US insurers and Medicare to pay for treatment outside the country at enormous savings. We could have something more like free trade in pharmaceuticals. Right now the Federal government provides somewhere in the neighborhood of 1/3 to 1/2 of the funds for drug research. Of the money spent privately, only a sliver goes to "breakthrough" drugs. The lion's share goes to "copycat" drugs. This is incredibly inefficient and is a result of the patent system, which essentially grants monopolies and leads to monopoly pricing. Drugs cost ten times what they would cost in a free market. Economists get furious about the deadweight involved in taxes and tariffs that increase prices by a few percent. What about the deadweight in the patent system that increases prices by more than 100%? It would be cheaper overall to fund all of the research publicly and allow the drugs to be manufactured and sold in a competitive ("free" market.
(PS. Although I'm not sure why you associate this with Keynesian economics, you are right about the distorting effects of implicit guarantees like "too big to fail." According to some analysis the growth of the financial sector accounts for as much as 30% of the increase in inequality since 1980, and the implicit guarantees are one part of that story.)