Poverty can exist in a free market economy, as it is a complex issue influenced by a variety of factors such as income inequality, lack of access to education and job opportunities, and government policies. Supporters of free market economies argue that they create wealth and increase economic growth, while critics argue that they can lead to increased poverty and inequality if not properly regulated. It is important to note that different countries have different level of poverty and different approach to tackle it.
In a free market economy, individuals and businesses compete for resources and customers, and those who are most efficient and effective at meeting consumer demands will generally be more successful. This can lead to some individuals and businesses becoming “winners” in the market, while others may become “losers.”
The winners in a free market economy are typically those who are able to create valuable goods and services at a lower cost than their competitors, or who are able to innovate and create new products that consumers want. These individuals and businesses will tend to earn higher profits and grow their market share.
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The losers in a free market economy are typically those who are less efficient or less innovative than their competitors. These individuals and businesses may struggle to remain profitable, and may eventually go out of business. Some argue that the losers in a free market economy may include workers who lose their jobs due to automation or outsourcing, or small businesses that are unable to compete with larger, more established companies.
Why does the latter description of how one becomes a “loser” in a free market sound so familiar? For now, let’s just say that’s a good note to mull over.
People who speak out about poverty often advocate policies and programs that aim to reduce poverty and improve the lives of those who are affected by it. This can include calling for higher minimum wages, affordable housing, accessible healthcare, and educational opportunities. There is cause to take government to task to ensuring essential social services like healthcare, education, public housing, and public education are universally accessible. However, intervening in how the market (i.e. supply and demand) sets the value of things like the prices of goods and services often ends up a costly and, ultimately, unsustainable exercise.
One can whine about how expensive onions and eggs are but ultimately in this “free market” most of us signed up to, one can only buy what one can afford. We can blame government ’til the cows come home, but the free market ultimately wins and those who play well win. Those who don’t play well lose.
Filipinos need to come to terms with a simple rule. You can’t buy what you can’t afford. This is a financial rule of thumb, which advises individuals to only purchase items or make financial commitments that they can reasonably afford to pay for with their current income and savings. This can help prevent financial difficulties such as debt or defaulting on payments. It is important to create and stick to a budget in order to ensure that you are living within your means. It’s simple, really.
benign0 is the Webmaster of GetRealPhilippines.com.
It has nothing to do with a free market and everything to do with corruption.
Life isn’t meant to be fair? *technical debt* eventually catches up.
Education isn’t high in demand nowadays. It’s just the free market at work? Is that how we’re supposed to read and use data?
The skyrocketing onion prices, we have observed recently in the Philippines are the result of a market mechanism (demand strongly exceeding supply or may be better supply lacking far behind supply). However, it is not the result of a “free market economy”, the Philippines, in many aspects and particular in the agricultural sector, are far away from a “free market economy”. The extremly high prices for onions signaled scarcity, but while in a free/open market, the price signal would have motivated an immediate increase of supply (by higher imports), in the Philippines, this was not possible because of “protective” import regulation. One might like or dislike the way the Philippines are regulating their economy (this is not my business as a foreigner), however, please do not blame a “free market economy” (which certainly is not free of limitations and weaknesses either), where no so “free” or “open” economy exists. – Just my two coiuns…
It’s more like the protectionism they signed up for. It’s ridiculous that there are people who complain about high prices yet they support protectionism which can limit supplies of the products they want to buy. Anyone still supports protectionism even in this time of price hike crisis due to inadequate supply?
Based on observations and analysis the main reason for the scarcity is logistical shortfalls. The supply are available in province but storage and transportation is not enough. And on this area the cartels taking advantage of the situation and marking up the prices.
If only we have a better understanding of the situation maybe we may have a better solution.
The Food Terminal and the Kadiwa Food Centers was part of the system that was in place by the late great President Marcos Sr. before, but they got privatize after the forces of ‘good government’ of the Yellowtards took over.
EDIT: it should read “supply lacking far behind demand”.
Is Protectionism really it or the eyes are just not wide-open on the scrupulous activities of the greedy smugglers and hoarders whose intention is to sell at higher prices to gain more profit?
There’s the problem of smuggling and hoarding which creates artificial commodity shortages which forces the country to import more to fill consumer demand. That, plus low agricultural production greatly impact market prices.
Even PBBM comments on the matter:
“To be brutally frank about it, we have a system but they are not working. The smuggling here in this country is absolutely rampant. So it does not matter to me how many systems we have in place, they do not work.”
“So we really have to find something else. We cannot continue to depend on these systems which have already proven themselves to be quite ineffective.”
The President pushes for major system-wide reform vs smuggling. Digitalizing the Bureau of Customs operations will be an “important part” of President Ferdinand Marcos Jr’s strategies.
There are “mysteries” in the onion industry according to Marikina Rep. Stella Quimbo. This is something she found out during Wednesday’s hearing of the House Committee on Agriculture and Food.
First mystery:
The demand for onion was pegged at 363,000 metric tons while the supply was pegged at 338,000 metric tons last year given the modest shortage. Shortage is about only 7%.
Second mystery:
In 2019, the price of onion in the Philippines is the lowest among the whole of Asean region, and then, in 2022, it’s the complete opposite, wherein the price has become the highest not only among the Asean but even in the entire world.
Third mystery:
The third mystery is the sudden disappearance of supply in mid-2022.
If prices are determined by supply and demand it doesn’t make sense that smugglers will bring in onions into the country when there is enough supply.
According to Ms. Quimbo: “So yun yung misteryo na talagang bilang isang ekonomista, hindi ko talaga maipaliwanag. Kaya napapa-isip talaga ako na may mga misteryo, may mga behind the scenes na talagang hindi po natin nakikita, kasama na po diyan ang kartel.”.
Even Bureau of Plant Industry officer-in-charge Director Gerald Glenn Panganiban said the agency is also puzzled by the disappearance of supply.
What do the you think guys?