2006-08-11 12:54:13 · 3 answers · asked by Aurred 2 in Social Science ➔ Economics
No. Without debt financing people couldn't take out loans to buy houses, go to college, etc. It would also discourage savings. People would be hamstrung to only buy things on the go. It would be much harder to put money aside because you don't make interest on it and there would be no institution to keep the money since they couldn't give debt financing to someone who needed the money right then and there.
Free markets promote freedom. Allow people to decide what products are made since companies don't make money when they make something people don't want to buy. A better tomorrow is promoted by the constant growth and freedom of choice in a free market economy. Thus it moves humanites towards its dream.
2006-08-11 16:58:47 · answer #1 · answered by Terry W 1 · 0⤊ 0⤋
MikeD nailed it. But I'm willing to expand on that.
Debt financing is up the individual. If you'd gladly pay me cost plus interest next week for a hamburger today, if the interest rate is high enough you'll have your hamburger right now. If you borrow more than you can pay back you're either dishonest or a fool, maybe both.
Freedom and Market. Can you have one without the other that is the real question. Market implies that you have some choice to select what you want and to allocate your resources to satisfy your wants and needs as you see fit. I'd like to know your idea of how a "caged", "chained", "regulated" or otherwise unfree market would work.
In an un-free Market, its not really a market. Somebody else has to decide what you really need, and distribute it to you based on their evaluation of your need. Then somebody else has to decide what is to be produced and who is to produce it. They would decide what you need to produce and how much of it you must produce.
I think this has been tried and didn't work out very well.
Come to think of it. Being a serf would be an improvement over a non-free market system. The land owners generally only kept 20% of what a serf produced and allowed the serf to live on the land as well. Hey thats a better deal than I have if you include the amount of my production which is confiscated for socialist security.
2006-08-12 16:50:37 · answer #2 · answered by Roadkill 6 · 0⤊ 0⤋
If you believe the serfdom was the ideal system, then yes.
2006-08-11 22:01:19 · answer #3 · answered by MikeD 3 · 0⤊ 0⤋