Why the free market is inefficient

This video is an analysis of the free market and the ways it fails. For some reason those things never seem to be discussed on neoliberal literature so I took it upon myself to do so. I explain when and how the free market fails, why and how it wastes 1/3rd if all resources it produces and I preemptively reply to the most common critiques of works like this one.

Sources:
The market wastes 1/3rd of resources: Food production (according to the UN) = Enough for 10 Billion. People wo receive enough food 6.7 Billion. Wasted Food production (10B – 6.7B) = Food for 3.3 Billion people which equals 1/3rd of the total production.

Transcript: (At least partially)
We are used to thinking about the free as the most efficient economic system. We are told so all the time by all kinds of people. But is it really true? Is it really all that efficient? After looking at the evidence I don’t think so anymore. And maybe by the end of the video you will come to the same conclusion. Let’s start with the reason Neoliberals, that’s people who support the free market no matter what, think that it’s the most efficient system in:
Chapter one “The market in theory”
You’ve probably heard this already so I’ll try to make this as short as possible while keeping as much complexity as I can fit. The purpose of the free market is to distribute resources. The market doesn’t produce anything on it’s own it just transports stuff from the person who has it to the person who needs it.
It does that with financial incentive. If resources are scarce in a region then their price will rise and there will be an incentive to produce the resources or to transport them to the people who need them. In the end the person making and distributing the products makes a profit and the people who need the products get them.
This was a rather technical explanation so let’s look at an example. We have 2 towns. We name them Berlin and London. London has a lot of food and Berlin was just hit by a drought and doesn’t have any food. Because of the scarcity the little food that’s left in Berlin will become really expensive. So expensive in fact that the rich people in London get an idea. They will buy a lot of food in London and sell in in Berlin for profit. If possible, they will even increase the food production to provide exactly as much as everyone needs.
Sounds great doesn’t it? And so natural as well. No boss no management just people acting in the best way possible. And it would be great if it worked like that in praxis. But I am afraid it doesn’t. And I am afraid there are many cases in which the free market wastes a lot of resources. Cases incidentally which never seem to be discussed in liberal academic literature. Let’s look at how it really works in:
Part two “The market in praxis”
The free market has been in place for roughly 200 years in most European countries by now. Even longer in the USA. Right now the market is global and the entire world, ignoring north Korea, trades with each other. You can buy anything in any country and sell it in any other country to anyone who will buy it. It’s a global system.
So let’s look at our example again. We have Berlin and London and Berlin is starving. Does London still deliver aid to Berlin in real life? The answer is Yes… under one condition. Only if the people of berlin are rich enough to justify the transport costs. Remember the investors from London only help Berlin if they can make a profit off it. This may not seem too complicated, but it leads to a lot of problems and ridiculous situations in real life.
Globally earth produces enough food to sustain roughly 10 Billion people. There are only 7.5 billion people on earth. This fact combined with the hyper efficient free market should mean that every single person on earth is overweight. Right? You already know that that’s not true. There are millions of people starving each year and according to the UN 800 Million people lack the food to live a healthy life.

[ericb.]

I actually got my degree in economics and I got unnuanced worship of the market from my professors. However, I also had a job on campus where I took notes in classes I wasn't enrolled in for a student with disabilities that I never met and one of the classes was a history of business and economics with a Marxist as a professor. In my macroeconomics class, part of the lesson was what causes recessions and the answer is unplanned surpluses, essentially more products are being made, and with higher supply comes lower prices that the seller refuses to sell at. Sure, my poor man's Chicago boy professor (different South American country, different Illinois-based university) didn't say that last part, it was actually the Marxist historian passing an article from The Wall Street Journal about dairy farmers dumping gallons of milk to bring the price back up in which I put 2 and 2 together. Now, not everything is as dumpable as milk, so the unplanned surplus either sits there or in the case of many high-class fashion chains, the products get destroyed so the products don't get sold at a discount.


Plus there's the question of externalities in which the market either produces too much of something bad (like pollution) or not enough of something good (like education) which affects a third party and the government has to step in. In another one of my classes (an anthropology course) one of the papers we had to read was about the different kinds of economies including a market based, peripheral market (where there are some things for sale but not everything is for sale), and marketless (kind of self-explanatory).

[OBrasilo]

Here in Slovenia, supermarkets actually aren't obsessed with vegetables looking perfect, and stuff near the "best before" date is sold at reduced prices. And the whole thing of "people won't buy the last apple" isn't true at all here - people will buy the apple so long as it's there. I have infact seen them running out of stuff (I had to go to a neighboring supermarket to buy lettuce once because it ran out in the supermarket I went to first).

[gaiawillis]

its efficient at what its made to do enrich the bourgeoise

[saybervoltz]

Nice video, and like how you played The Internationale in the background.

[munchbox]

Good stuff. Would love to see more. Hope you get big, my dude.

[teergeret]

About the autobahn thing, A. H. certainly did not build "most" of the autobahn, he built none, workers did, lol.
But seriously, in the third reich it was still just a rather small part of what we have today in Germany.

[virologistic]

One of the major challenges to the free market is a deviation from modernism and a belief in a meta-narrative that allows capitalism to grow. Nowadays capitalism has become more and more saturated and ‘lost’ under the post-modernist system the world had adopted, with a minority of sufficient, novel innovations simply due to the fact that we have already saturated our societies with technology for the time being. However, private corporations are still willing to do whatever it takes to profit and outcompete each other, even if it means wasting resources and labor power on minor adjustments to create ‘the brand new iPhone!!’, etc.

[kamratqp]

Great video, however your definitions or explanation of overproduction is a bit inaccurate. mass food dumping is not caused by “overstocking” which suggests a solution is possible within the framework of capitalism. Rather overproduction is caused by the accumulation of profit by the bourgeoisie by paying the worker less for the product he produces than the value of the labor the worker is selling. This makes the worker unable to buy back the goods he himself produced.

[scix]

In most cases i believe in a free market, but in cases like environment, food, healthcare, etc we need public institutions.

[Ysna-reor]

7:30 isn’t that what happened in Central America with fruit corporations?

[nesslessness]

The bad movie analogy was really good.

[dankflyingv]

Important question though: is Viki an anarchist or a Marxist Leninist?

[tonistaak]

london and berlin example, people wil trade valuables for food if they think food is more important.If people don't have money, sellers will try to reduce transport costs and food costs, hungry people don't need cavier do they?

[sreebuszeebus]

All your arguments are valid however, it is on the basis of globalism not nationalism. As a nationalist the free market works perfectly for my nation and I am happy. The only way to help the Africans with the free market is to unite the world so that way there is no such thing as “independent economies” and “foreign corporations”. But I am a nationalist not a globalist. I am motivated by my own people’s interest, yes this can be considered xenophobic or even racist but so what. Just like I value my family over a stranger I value my people over Africans

[GeneralArmorus]

bbbbut the only thing standing in the way of distribution are governments.

[siddharththayil]

I'm a simple man. I see a Viki 1999 video, I hit like.

[kerycktotebag]

"free" domination for private property owners

[comradefreedom]

I tend to call myself an AnCom, for the sake of brevity, and LibSoc when I feel I need to present myself in a professional, or realistic manner, but if I'm really going to get into what my ideal system would be, it would be like fully automated luxury gay space anarchism (Yeah, kind of the meme way of saying fully automated luxury anarchism). I like the idea of production being fully automated and creating just enough of a surplus that everyone can just have stuff for free, but not to the point where we over-produce and let things go to waste. What are your thoughts on that?

[rebelgordo]

You used an example where both country’s are free market but mass hunger occurs when a country is not free market

[deathdome]

*restricts the free market to the point of government monopolization* “why would the free market do this” *continues voting for government monopolization and bureaucracy*