I am skeptical that every documentation suggests that, though that is beside the point.
We're probably gonna disagree, but you didn't mention the Keynesian policies that the government established early on in the Depression. They weren't aggressive enough to completely turn around the economic downturn, but they did help (though Congress and the SC had started to repeal many of those programs, which could be why there was a recession during the depression).
Having studied economics, I can tell you a few things that I know about contestable markets: First and foremost, they cannot exist in real life. A contestable market assumes there is equivalent technologies available, no entry or exit barriers, and no sunk costs. The latter two are pretty much always there. And the former can also be an issue when patents and such get into the mix. You downplay the effect of barriers to entry in your response as well as the issue with monopolies, but they really do matter.
I do not remember what my Microeconomics textbook used as an example for this, but here is one that I know of: Did you know that in some places in the country, you have no choice for your internet service provider? My high school AP Government teacher had the choice of living without internet or paying for Xfinity's services. There were no other feasible options. You could argue that if everyone didn't use that service or if they moved, then Xfinity would lower the price, but those choices place a heavy cost on consumers and very few would be willing to do so. Other companies could come to that area and compete, but the cost of building their equipment and attempting to compete with Xfinity would result in heavy losses because Xfinity could temporarily cut their prices, let their competition fail, and then raise the price again. This obviously isn't "beneficial to society" and nor did competition save the day--nobody has tried to compete with Xfinity in her area even though nothing related to the government is enforcing this monopoly.
In addition, you talk about the robber barons/captains of industry but you only mention some of the positives. Yes they gave lower prices for a while, but they did raise them later. Also, they exploited their workers, bribed the government, and gambled with money to turn a profit.
Also, simply saying that "humans makes mistakes" does not mean that monopolies are not a problem. That statement, while true, says nothing about the severity of said mistakes, so it does not guarantee the collapse of an entire monopoly from one mistake. Also it does not say when such a mistake will happen. There is a fallacy in claiming that this should alleviate fears of monopolies.
As seen previously in the example of the exchange between my former teacher and Xfinity, free exchange may not actually be mutually beneficial in that both parties are satisfied with the trade. This was a natural phenomenon that resulted from the existence of barriers to entry and the like--something that it does not account for well. So the principle of free exchange cannot replace altruism as a way to benefit society as a whole in all cases.
I see no contradiction. Altruism and morality are not the same. The former exists in all humans (and likely all animals) while the latter is a social construct that can differ depending on the community. Also, yes, altruism can sometimes involve self-sacrifice but even if it doesn't benefit every individual, it can still further the collective good. For example, certain species of birds will sometimes throw themselves at predators so that the rest of the flock can escape. The individual did not benefit, but the entire population did. Distracting the predator ensured the survival of the rest of the flock at the expense of one bird. The others will live to reproduce and result in a net growth for the flock.
Well what if free exchange is still plagued with monopolies because that is what happens in reality? Then both "extremes" still have the same problem. There is a victim when the trade isn't fair. It is possible to define who committed this violation. Sometimes a group of people is held accountable for a crime (ie. a terrorist group, a gang, etc.), so why should a corporation be any more difficult to define?
If those theories of free trade (and on the flipside, communism) represented the real world perfectly, I would wholeheartedly agree. On paper, it sounds so nice and perfect and I'd love for that to be true, but it is not realistic. The idea of a free market where everyone is always satisfied with their exchanges and monopolies are not a problem because the law of contestable markets actually applies perfectly would be so lovely! Alas, this cannot be.
Also, you said it's hard to define things like "society" when that is not the case. Just because something is complex does not mean it cannot be understood. For society, we could define it as a community of people that uphold certain norms. Society exists at multiple levels (ie. city, state, region, nation) and depending on the norm your reference, you are referring to a different level of society. For example, in my local community, a shared idea is that "yoga pants make you look young and sexy." This exists at the local level of society but not exactly at higher levels. A shared idea that could exist at the regional level is "Southern etiquette". And then the "American dream" could be seen as an idea that exists at the national level of society. See? Was that so hard?
Hee hee.
I learned my AP Psychology class that the notion of "tabula rasa" has long since been disproved. One example that I find to be completely adorable is this experiment:
http://www.cbsnews.com/news/babies-help-unlock-the-origins-of-morality/ . Babies are also predisposed to bias in their early stages. They already have a sense of right and wrong. As they age though, they become more altruistic. So we are capable of evil. Ergo humans do have this inner savagery.
Eeyup. However, this was then upheld by the rich as a means to justify inequality and suffering for the masses.
On a side note, the early humans are so fascinating, right? Anyways, this paragraph mentions altruism, sacrifice for the greater good at the cost of the individual. An individual did not benefit, yet the group did. It seems you contradicted yourself.
Now you'll probably tell me that I contradicted myself too because I said that humans have the inherent capacity for evil but can also be altruistic. However, when people identify with a certain group, they will support that group and exhibit altruism towards them. When facing others of an opposing group, they will react negatively. So was it guaranteed that the child's inherent sense of right and wrong matched that of the group? Not exactly. If they do not identify with their group, they will lash out. In the past, this would lead to infanticide or them being left to die to the elements. In the modern setting, this is nigh impossible, but negative reactions are still possible. Biases, such as Social Darwinism, are still feasible options for those who dislike a group.
Let us add some perspective to this, shall we? Organization is key to humans, as seen by the existence of tribes. Larger groups required better organization, leading to the creation of formal government. Where there are people with goods and services to exchange, there is a market. These large societies have businesses and governments. Well, assuming rationality, would it not be a beneficial decision for a business if they could somehow manipulate the government to hamper their competition? These societies will always have both, so utilizing the power of government can help create monopolies and unfair practices such as what you discussed earlier. In fact, as mentioned previously, the robber barons would bribe government officials, exactly as expected. The point I'm trying to make though is that some form of government and some type of market will always exist in every society. You can argue as much as you want about the benefits of a laissez faire free market but it does not exist in a vacuum. In real life, the overlap is impossible to avoid. Either the market manipulates the government, or the government regulates the market. This will happen. And regulation is not necessarily a bad thing. If the government had done its job and restricted the sale of derivatives, 2008's recession wouldn't have happened. A lot of businesses can be very short-sighted sometimes--they do risky ventures in the interest of short-term profit. This can have very large consequences, and proper regulation could prevent seriously problems. And if we allow corporations to have a disproportionate influence on government (ie lobbying and excessive campaign donations), then such unfair practices can be done and the "free market" will do nothing to stop them.
This is really cool! Though it did not necessarily help everyone. If you were not a member then you could not get assistance, right? So saying that the "weakest and poorest" got support is doubtful. And with health problems that require very expensive procedures (ie modern day ailments such as AIDS and obesity), I doubt that such a system would work. Smaller pools of money are less effective than one larger pool of money. Though to be fair, our current "universal healthcare" isn't exactly perfect either. But it has its pros and cons as did those "friendly societies."
That last paragraph implies that you are a utopian. The free market and communism are very idealistic. Hopefully what I said makes sense to you and you can see why I can say that.