Saturday, August 22, 2009

Free Market vs Regulated Market

Which do you prefer? To be free or regulated? In today's post we will analyze both, and discover which of the two really work in favor for the common good of everyone. Analyze this. The cell phone industry. For the most part, this industry has been free of governmental interference and has thrived because of it. Today, there are many successful cell phone providers. Most think that in every industry there must be at least some semblance of governmental regulation; to prevent monopolies and such. However, the cell phone industry is a perfect testimony to the fact that free markets, when left to the laws and rules of competition, not only are more succesful, but protect individuals and give everyone the right to equal opportunity.

For example, in the free market system, lets just say that there arose a company named Macrohard (spin on Microsoft). Macrohard created this revolutionary new technology in software and offered this product to the public. Years down the road, Macrohard eliminated all the competition with low prices and a great quality product. Today, Macrohard dominates the software industry, therefore jacks up all their prices for consumers. At this point, Uncle Sam would rush in, cut up Macrohard and sell it to pieces. However, lets contemplate what might have happened if Uncle Sam didn't call a timeout and stayed standing on the sideline one more quarter. I believe Macrohard would have fallen prey to an economic rule called competition. You see, the competition rule states:

"The product with the highest quality and lowest price, always wins."

Macrohard no longer played according to the competition rule, therefore allowing other companies to work underground and eat away at the monopolizing giant.

So let's take a gander at what our unregulated cell phone industry has become today. In virtually 20 years, cell phones have travelled from the dinosaur age to a futuristic Jetson's lifestyle. Cell phones looked like this when I was born:

To looking like this today at my 19th birthday:

And this is all because the cell phone industry didn't have a "trigger happy" Uncle Sam waiting to anihilate the first majorly successful company. Cell phone providers basically give you the phone for free; all you have to do is pick a plan. Plans range from 5 year contracts to pay as you go. The industry is flexible, maintains low cost, provides an efficient high tech product, and is multiplying in technological growth every day. All this goodness is here today without a poking finger from the government because IT'S NOT THEIR JOB TO POKE FINGERS IN ECONOMICS! Economics runs on supply/demand and competition, it will become crippled if the government throws in even more rules and regulations. This does not only apply to cell phones, but every area of business. From cars to healthcare; leave the government out and everyone benefits.

Spread the wealth; 82% of Americans own a cell phone today...keep it rolling.

In your humble service,

Silence Dogood

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