The idea of a totally unregulated free market is an economist's fiction, an idealization, like the "rational economic agent," motivated only by narrow monetary self-interest, who acts in that fictitious market. In the real world, even the most laissez faire economies in world history, e.g., early 19th century England, late 19th century America, have had a fairly heavy degree of regulation. I don't think the expression "drives price to utility" makes sense.
In theory, neoclassical economic theory, anyway, a fully competitive free market maximizes welfare by putting all the actors in a position where no change could make them better off, by, or in part by, driving prices down to the "equilibrium" point. AT equilibrium, no no can raise prices, because someone will always sell them for the lower, equilibrium prices, and no one can lower prices and still make a profit. This is a rough and approximate statement of the general equilibrium theorem underlying neoclassical economics. This is all mathematics and few economists pretend that it describes, or could describe, reality.
--- BklynMagus <magcomm at ix.netcom.com> wrote:
> > This depends on what you mean by profit. In a free
>
> market competition will drive the price of Capital
> to
> reproduction cost.
>
> And does this mean that there will be no profit,
> just
> a recouping of what was spent in the first place?
> When
> I refer to profit I am thinking about ending up with
>
> more money at the end than you started out with.
>
> >Is this a serious question?
>
> Yes, and there is no need for your contempt. I was
> just wondering if there had ever existed ever a free
>
> market without regulation, or if it was merely an
> idea
> that is used in economic theory.
>
> > In that regulation creates privilege, which is the
>
> antithesis of a free market. Privilege, by
> eliminating
> competition, drives price to utility.
>
> Okat, what does "drives price to utility" mean.
> Answering questions about theoryspeak with more
> theoryspeak is not helpful.
>
> Brian
>
>
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