Government intervention may cause inefficiencies inefficient, but relative to what?
Compared to the free market!
Investment on a free market is guided by profits, loses and prices. If someone is making a huge profit/the prices of something is very high in a certain industry, then other capitalists will notice this and invest in this industry.
If someone if making large profits, it indicates that there is not much supply in that industry, and so other capitalists will rush to get a share of the market
i.e. to supply a demand.
when government invests in something, however, they don't rely on prices and are hence detached from the structure of production. They invest where they are arbitrarily believe the investment is needed, rather than what prices will indicate, and hence are inherently less efficient than private investors.
Show me how a perfectly competitive free-market ideal is feasible in this world
Given your economic illiteracy, I'm going to assume that you don't mean 'perfect competition' in a theoretical economics sense, but anyway, that notion is complete bullshit.
If you just mean that in order for a free market to work we need 'perfect competition' (again, bullshit concept), then that's a load of shit. When countries free up their countries, economic growth nad hence standard of living always rises. There are literally dozens of examples of this.
from Thomas Sowells'
Basic Economics:
When many African nations achieved independence in the 1960s, a famous bet was made between the president of Ghana and the president of the neighboring Ivory Coast as to which country would be more prosperous in the years ahead. At that time, Ghana was not only more prosperous than the Ivory Coast, it had more natural resources, so the bet might have seemed
reckless on the part of the president of the Ivory Coast. However, he knew that Ghana was committed to a government-run economy and the Ivory Coast to a freer market. By 1982, the Ivory
Coast had so surpassed Ghana that the poorest 20 percent of its people had a higher real income per capita than most of the people in Ghana.
This could not be attributed to any superiority of the country or its people.
In fact, in later years, when Ivory Coast politicians eventually succumbed to the temptation to have the government control more of their country's economy, while Ghana finally learned from its mistakes and began to loosen government controls, these two countries' roles reversed-and now Ghana's economy began to grow, while that of the Ivory Coast declined.
Similar comparisons could be made between Burma and Thailand, the former having had the higher standard of living before instituting socialism and the latter a much higher standard of living afterwards. Other Countries-India, Germany, China, New Zealand, South Korea, Sri Lanka-have experienced sharp upturns in their economies when they freed those economies from many government controls and relied more on prices to allocate resources. As of 1960, India and South
Korea were at comparable economic levels but, by the late 1980s, South Korea's per capita income was ten times that in India.
India remained committed to a government-controlled economy for many years after achieving independence in 1947. However, in the 1990s, India "jettisoned four decades of economic isolation and planning, and freed the country's entrepreneurs for the first time since independence," in the words of the London magazine The Economist. There followed a new growth rate of 6 percent a year, making it "one of the world's fastest-growing big economies." In China, government controls
were relaxed in particular economic sectors and in particular geographic regions during the reforms of the 1980s, leading to stunning economic contrasts within the same country, as well as rapid economic growth overall. Back in 1978, less than 10 percent of China's agricultural output was sold in open markets but, by 1990, 80 percent was.
The net result was more food and a greater variety of food available to city dwellers in China and a rise in farmers' income by more than 50 percent within
a few years. In contrast to China's severe economic problems when there was heavy-handed government control under Mao, who died in 1976, 'I the subsequent freeing up of prices in the marketplace led to an astonishing it economic growth rate of 9 percent per year between 1978 and
1995.
given the criteria for perfect information, no transaction costs,
ugh. Let's just assume that what any of what you're saying makes sense...
In order to support the introduction of a free market economy, we ONLY need to demonstrate that it would work better than the state. It does not need to be "perfect" (whatever that means).
In order to justify state, you have to show why it works better than the free market. which it doesn't.
no barriers to entry, etc, etc.
ugh. No other entity exists that erects more barriers to entry than the state.
Kudos to moll; he is the only one who has at least attempted to address the original post in this thread. i don't agree with his points, but unlike him everyone else has just made these generic, ignorant swipes at the free market, despite lacking an even rudimentary understanding of economics.