TKO

FT's Martin Wolf makes the case for taxing the financial industry, like polluters, for the massive negative externalities it creates.

What in the world...

So let me ask you this. What's the difference between a centrally planned economy and a free market economy with regulations, taxes, and subsidies? Sooner or later, the government effects from regulations, taxes, and subsidies will overpower the 'free market' and dictate the movement of the economy -- which is analogous to a centrally planned economy.

Of course, the intention of the 3 items is not to 'plan' but thwart or limit the potential damage to consumers alike -- which is fine. But if the rules keep adding up, the end-product would look much the same as a centrally planned economy.

I am not arguing for or against this. But in a matter of time, the "free market" will be bogged down by so much law and regulation that it may actually negatively affect long-term growth infinitely - the cost of being compliant through the various channels will just become so enormous that the benefits of regulation may be less than the cost (i.e. have you seen how much audit and law firms charge?)

For example:
- Free Market where anything goes
- Free Market with 1 billion page book of rules attached; By the time anyone figures out what you can and cannot do, the equivalent non-regulated Free Market most likely already went through the exploitation, crisis, aftermath, recovery stage and on to growth.

The worst part of it all is that, by the time anyone else theorizes this, it'd be extremely hard to prove -- how do you exactly test out such a theory if the government dictates the entire economy's movement.