The Free Market Is Impossible Summary

The second case – controlling the market – is where the contrast between small firms and big business contrasts is most evident. The small firm lacks the capacity to influence prices, as both their market share and purchasing power are limited; however, big business possesses an abundance of both. Big business is able to exert their power by influencing prices because their decision to buy can be the difference between survival and failure for suppliers. Furthermore, Galbraith (1967, 30) suggests that the influence of size enables firms not only to control price but also quantity sold. Although Galbraith acknowledges that influence on demand is inexact; One should not discount its importance. Advertising, sales organization, and product design

In his article, Dugger offers his theory on the notion of the free market, which he terms “Dugger’s theorem.” Akin to Galbraith, Dugger notes the reality of the constantly evolving market economy; however, Dugger (2005, 309) suggests that the market is subject to constantly arising disputes resulting in either the creation of formal institutions, or if allowed to accumulate, market erosion. In these disputes Dugger formulates his

In palpable markets, information is often not only difficult to come by but also restricted by those who hold power – and locating this “equilibrium” price is an arduous if not impossible task. The market for medical services may best exemplify this. In the medical market, prices vary depending on one’s HMO, whether they have insurance or not, and the facility performing the service – among other factors. Even if one could find the theorized “equilibrium” price for a medical service by painstakingly extracting all pricing information. One must ask if the same service is being provided at that given price? Dugger (2005, 315) posits that the flow of information is controlled by market rules, and therefore by those who produce them. This information asymmetry positions those lacking sufficient market power at a disadvantage. If an actor does not possess adequate information, the push and pull of consumer and producer interest is