Baraka_Guru

The concept of a free market is great in that it looks great as a philosophy rooted in absolute economic freedom. As you point out, it's short-sighted, but for reasons more than problems of monopolies. There are other issues such as global trade and the desire to instill protectionist measures to favour domestic industry.

Problems arise too with planned economies, especially the most absolute of these, being command economies. The way to look at it is that lassez-faire is the absolute state of a free market and a command economy is the absolute state of a planned economy.

There are historical examples that people often cite when pointing out the failures or the impractical aspects of command economies. The most-cited example is communism under the Soviet Union. A better example, in my opinion, is China, who moved away from communism towards a mixed economy when faced with the realities of global trade.

Because that's what it usually comes down to: mixed economies are the norm, and are generally considered the best approach to economic policy.

People don't often consider that there were near attempts at lassez-faire in places like 19th-century Europe and the U.S. There was a revolutionary shift after the early development of capitalism, the eventual demise of mercantilism, and the response to the publication of Smith's Wealth of Nations.

However, the 19th century in America produced an environment of robber barons, which in a sense meant entire industries consisting of monopolies and oligopolies, and not exactly of the natural kind but rather of the coercive kind that prevented new entrants to the market. It was a highly uncompetitive situation that would devastate our current antitrust sensitivities.

But in the end, it didn't matter. After the American Civil War, new protectionist and regulatory measures were enacted to stabilize the economy, as well as an income tax to help pay for infrastructure, etc. That in addition to public pressure for labour rights and freedoms lead to what we know today to make up the American economy: a decidedly mixed economy.

There is no such thing as an absolute free market. If you look at the history of economics, it has never existed. It could be argued that it's even less viable than communism---which is interesting, mainly because of the panic of the Tea Partiers when Obama uses the tools of a mixed economy. They fear a slide into communism when the issue is, in fact, a reaction to the policies that would sooner have had that pipe dream of the wealthy: a lassez-faire Shangri-La America.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot