THE FREE MARKET ISN’T REALLY FREE

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In order to have a “free market,” decisions must be made about:

• PROPERTY: what can be owned
• MONOPOLY: what degree of market power is permissible
• CONTRACT: what can be bought and sold, and on what terms
• BANKRUPTCY: what happens when purchasers can’t pay up
• ENFORCEMENT: how to make sure no one cheats on any of these rules

You might think such decisions obvious. Ownership, for example, is simply a matter of what you’ve created or bought or invented, what’s yours.

Think again. What about slaves? The human genome? A nuclear bomb? A recipe? Most contemporary societies have decided you can’t own these things. You can own land, a car, mobile devices, a home, and all the things that go into a home. But the most important form of property is now intellectual property—­new designs, ideas, and inventions. What exactly counts as intellectual property, and how long can you own it?

Decisions also underlie what degree of market power is permissible—­how large and economically potent a company or small group of firms can become, or to what extent dominance over a standard platform or search engine unduly constrains competition.

Similarly, you may think buying and selling is simply a matter of agreeing on a price—­just supply and demand. But most societies have decided against buying and selling sex, babies, and votes. Most don’t allow the sale of dangerous drugs, unsafe foods, or deceptive Ponzi schemes. Similarly, most civilized societies do not allow or enforce contracts that are coerced or that are based on fraud. But what exactly does “coercion” mean? Or even “fraud”?

Other decisions govern unpaid debts: Big corporations can use bankruptcy to rid themselves of burdensome pension obligations to their employees, for example, while homeowners cannot use bankruptcy to reduce burdensome mortgages, and former students cannot use it to reduce burdensome student debts.

And we rely on decisions about how all these rules are enforced—­the priorities of police, inspectors, and prosecutors; who can participate in government rule making; who has standing to sue; and the outcomes of judicial proceedings.

Many of these decisions are far from obvious and some of them change over time, either because social values change (think of slavery), technologies change (patents on novel arrangements of molecules), or the people with power to influence these decisions change (not just public officials, but the people who got them into their positions).

These decisions don’t “intrude” on the free market. They constitute the free market. Without them there is no market.

What guides these decisions? What do the people who make the rules seek to achieve? The rules can be designed to maximize efficiency (given the current distribution of income and wealth in society), or growth (depending on who benefits from that growth and what a society is willing to sacrifice to achieve it, such as fouling the environment), or fairness (depending on prevailing norms about what constitutes a fair and decent society); or they can be designed to maximize the profits of large corporations and big banks, and the wealth of those already very wealthy.

If a democracy is working as it should, elected officials, agency heads, and judges will be making the rules roughly in accordance with the values of most citizens. As philosopher John Rawls has suggested, a fair choice of rule would reflect the views of the typical citizen who did not know how he or she would be affected by its application. Accordingly, the “free market” would generate outcomes that improved the well-­being of the vast majority.

But if a democracy is failing (or never functioned to begin with), the rules might instead enhance the wealth of a comparative few at the top while keeping almost everyone else relatively poor and economically insecure. Those with sufficient power and resources would have enough influence over politicians, regulatory heads, and judges to ensure that the “free market” worked mostly on their behalf.

This is not corruption as commonly understood. In the United States, those with power and resources rarely directly bribe public officials in order to receive specific and visible favors, such as advantageous government contracts. Instead, they make campaign contributions and occasionally hold out the promise of lucrative jobs at the end of government careers. And the most valuable things they get in exchange are market rules that seem to apply to everyone and appear to be neutral, but that systematically and disproportionately benefit them. To state the matter another way, it is not the unique and perceptible government “intrusions” into the market that have the greatest effect on who wins and who loses; it is the way government organizes the market.

Power and influence are hidden inside the processes through which market rules are made, and the resulting economic gains and losses are disguised as the “natural” outcomes of “impersonal market forces.” Yet as long as we remain obsessed by the debate over the relative merits of the “free market” and “government,” we have little hope of seeing through the camouflage.

Before examining each of the five building blocks of capitalism separately, it is useful to see how political power shapes all of them and why market freedom cannot be understood apart from how such power is exercised, and by whom.

The Free Market Isn’t Really Free

Social Media Marketers

You Say Expert; I Say Huckster
Charlatans. That’s the word I’d use to describe many in social media marketing. My bet is that you don’t disagree with me, and are also somewhat fatigued by the legions of “professionals” seriously referencing themselves as gurus and mavens.
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At another time in history, I gather these folks would have been equally happy selling us pet rocks, and fallout shelters for our backyards.

In spite of how unintentional their blundering may be, the fact remains that many touting expertise in this area can do little other than get the tools running. This results in a lot of implementers, but very few actual strategists.

Surprisingly few illustrate a capacity for crafting coherent and measurable plans in the social space—and this isn’t limited to those on the ground floor. Global brands often screw the pooch as badly as those basement-dwelling social media “experts.” Be that as it may, smart people are at work and, as we understand the space better, it will mature.

Do You Want to Talk or Get Dirty?
The relative immaturity of most social media marketing is best illustrated in how weak the arguments for it are. While many brand managers feel some deep-seated need to be “active” on social media, few actually articulate the reason for this in less-vague terms. The problem with such lack of clarity is that it leaves groups flailing madly, trying to achieve some nameless, shapeless goal. Similarly, we see a lot of groups reacting, instead of taking calculated action.

Without having determined our purpose, it’s difficult to understand what we should measure. This leaves us incapable of ascertaining whether our efforts have been successful and, if not, how we might change what we’re doing. Sadly, most social efforts fall into a few awkward categories: claiming territory (i.e. locking down your Twitter handle) and leaving it at that; posting anything in a desperate effort to not feel left behind; and interacting with customers.

For many smaller organizations, this last one may be all that’s needed. Listening to, and speaking with, customers is a good first bet. (Particularly given how many organizations suck at it.) The next question is whether you want to to solely react to customers, or make a concerted effort to affect them. From a more traditional standpoint, you could look at this as the difference between customer service and advertising. Both are important, and overlap at times, but are distinct exercises.

Setting up Goalposts
Words like advertising and campaign have been silently deemed dirty or—worse yet—traditional. The funny part of the “advertising is dead” arguments accompanying such bias is that they’re wrong. Such contentions were the result of hubris, and wishful thinking surrounding the true cost of social/digital marketing. Yes, advertising is changing. One might also argue that its becoming more complex. At the same time, it remains an awfully effective means of growing and defending a brand.

Part of what works so well with advertising is that it scales, which is something that social efforts often don’t do. Additionally, we tend to look upon advertising as something that needs to be organized and measured. Curiously, in spite of how much more readily we can measure digital efforts over traditional ones, social media marketing is commonly masked by good intentions and ambiguous notions of success. It’s great that you’ve got 1,000 “Likes,” but does anyone really know what number you need to achieve, in order to be deemed a success? For that matter, now that you’ve got all those thumbs-ups, what are you going to do with them?

By framing social efforts in a campaign format, we’re forced to establish goalposts of sorts. By clearly articulating objectives, we underscore what we need to measure. By defining time-limited schedules, we are obliged to compare the results of one campaignto the next. Meanwhile, by really examining what it is we need to do, we are forced to focus on what’s relevant to our companies, instead of just following the flock.

As it currently stands, the term Social Media Marketer is an oxymoron. In order for us to move past that, we’ll have to go from acting like implementers, to thinking like planners.

This article originally appeared in Applied Arts Magazine.

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