David Ricardo, (1772-1823) was not a pinko liberal Communiss, but an Englishman with a host of interesting friends, including Jeremy Bentham, James Mill, and Thomas Malthus.
He read Adam Smith's The Wealth of Nations in 1799 on a holiday at Bath, which became a springboard for his growth as a political economist.
Ricardo achieved fame by articulating the theory of comparative advantage, which I will cover in another post. Here, I hope to explain Ricardo's principles of the free market.
So:
1. Many buyers and sellers: so that no group of buyers or sellers can set a price.
2. Homogeneous goods: so competition centers on price, making products easily comparable.
3. Low barriers to entry: to discourage collusion.
4. Perfect knowledge: so buyers and sellers can make rational price-based decisions based on the price of competing products.
The problem? None of these principles apply in the present global monopoly capital regime.
1. When only 10 banks and two investment banks are setting the markets, we have a group of sellers setting the price.
2. Homogeneous goods? With the growth of econometrically-produced monetary instruments, we haven't the faintest idea with the "goods" really are.
3. The barriers to entry into these markets are not scalable expect for those already in the markets. We do not have new entrants; we have consolidation of participants.
4. Complete and utter lack of knowledge; see number 2.
Grrr. I don't want to hear any more free-market smack until you clear up these tiny problems with the controlling theory of free markets.
There never have been free markets. There will never be free markets. Markets are always controlled by governments. Which side is YOUR government on? The side of corporations, or the side of its citizens?