Probing Economic 'principles' of the 'free' market

Too many things are taken at face value. For example, economic law 101: When supply drops, prices rise. But we forget that they NEED not. It is at the seller's discretion. He may choose to sell the last kilo of grain to the rich fat guy who offers a thousand rupees, or give it away to the starving family for free.

"But that's absurd! Resources are limited, and takers too many. Prices allow for balance..."
But then you are talking about a distribution issue, a contention resolution issue - not a pricing issue. Problems stay the same, but our solutions reveal our priorities. The problem: Who should the limited resources go to? Self-adjusting prices in a free-market is just one of the many solutions. It reveals that our priority leans towards the highest bidder.
So should it go to the one who can pay the most, or the one who needs it the most?

"Oh, now you are tending towards socialism!! Distribution should be equal, centrally controlled..its been tried, tested and it has failed" We rush to label. We judge based on results. Never stopping to examine what our parameters for success are, where did they come from. And that multiple systems have failed. So let's delve deeper, before hurrying to conclude. 

Lets examine where the current model leads us to. Resources go to the highest bidder. Seems fair enough. If we magnify this, in a desert, a glass of water ends up going to the well-fed human who can pay a million dollars, than the person who cannot pay, but is dying of thirst. What you can GET in return overrides how great the NEED is for someone else. An over-simplified word is Lack of empathy. Does THAT sound fair?

Once the distribution becomes detached from need, another corollary arises. If resources go to the highest bidder, it also implies that it is OK to expect the highest bid from the same bidder. In short, it is fair to expect more for the same - to drive up prices. An over-simplified word is greed. But how do you make someone who does not need what you are selling in the first place, to pay even more for it? You do that by creating a PERCEIVED need. You manufacture insecurities, you create fear. And then exploit that fear. Of course the choice is on the consumers whether to give in to that fear. But the noteworthy thing is we think it is acceptable that we are already doing it. The winner then is the one who can create and exploit fears to the maximum. It again reveals where our priorities lie. If the "noble NGO" wants to survive, then it has to play the same game of fear too and exaggerate the need, and feed off the guilt of the rich(which is also based on fear. Fear of not being 'good') The big corporations and the NGOs are equally out of touch with reality - because the basic rule of the game: Perception matters more than reality.

It does not end here. We are talking about products and pricing - which all depend on that overrated thing called the "market". But in a world where returns trump need, another thing happens. Today - What we sell is products, not raw materials. Given a thousand kilos of wood - will it end up going to that high-end furniture  company who will pay 2 million for it because it gets 10 million from its customers, or to that low-end NGO which is trying to build houses for homeless? If the NGO  always loses, and is meant to die anyway - who would want to work there? Who would care about building low-cost houses? Thus, this mentality not only determines how we price things - but also how we distribute our limited resources, and what we will CREATE and what we will allow to wither and die. 

We shudder when 'lower castes' or colored people were not allowed entry into the public spaces. But we do not bat an eyelid when many people end up getting ousted from the "free market" - because catering to their needs is "simply not worth the price". The economic divide increases. Because we define our success based on money - the social divide also increases. You cannot win a game if you are not even allowed to participate. But the problem is not losing at it. The problem is what the rules are! Do we realize that the when someone wins in this game, a hundred people lose? More importantly, it has trained us to believe that this is acceptable..."Fair". "Only the fittest survive". There would have been no problem if we at least had a 'fit' majority. What we actually have is a starving skeleton on one hand, and a morbidly obese human being on the other. Nobody is fit! The problem is not having a free market, but how we behave when we are given freedom. Our behavior dictates the outcome, regardless of what fancy name we give to the market. 

So will we look at the fact that this 'fair and free game' is giving rise to a society that sustains itself on lack of empathy, greed and increases divide between humans? And if we are teaching our children to succeed at this game, these are the values we HAVE to ingrain in them - of course cloaked as 'fairness', 'free market', and 'survival of the fittest'. Fooling ourselves is a choice. Fooling innocents is a sin.

So is the answer Socialism...since Capitalism has failed? No!! It is not about any existing or new "ism". It is about examining our values from which any of these 'isms' emerge. If those values are correct, the 'ism' wont matter - it will lead to increased harmony rather than increased division. It is about thinking why we chose these crazy values in the first place? Why do the most 'intelligent' species on earth keep making the same mistakes - and just changing the label, the 'ism' for it? If we can find out, perhaps we can stop the chain reaction. That will be explored later.