On Free Markets, Their Benefits and Shortcomings, and How Competition Policy Operates in Such Markets

Adriaan ten Kate, Sr.

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People have strong feelings about the free market, and even more so about free-market capitalism. For the advocates, market freedom is what has generated the economic progress of modern times; for them, the world would have been a different place to live without market freedom. The opponents of the free market, on the other hand, hold market freedom responsible for all the injustice and inequality we see around us everywhere. However, in my view, the concept of market freedom remains poorly understood by most commentators. In this article, I set out what exactly market participants are free to do under market freedom, what the main benefits of market freedom are, under what conditions market freedom fails to bring about those benefits, what can and what cannot reasonably be expected from market freedom, and, finally, how competition policy is supposed to operate in such markets.

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Adriaan ten Kate, Sr., On Free Markets, Their Benefits and Shortcomings, and How Competition Policy Operates in Such Markets, 1 Criterion J. on Innovation 381 (2016).

Adriaan ten Kate, Sr. is a Dutch-born theoretical physicist turned economist who resides in Mexico City. He has a doctoral degree in mathematics and physics from the Free University of Amsterdam and a Ph.D. in economics from Erasmus University Rotterdam. In the early 1970s, he was a computer assistant to Jan Tinbergen, the first Nobel laureate in economics. In the late 1970s, he was ranked 24th on the list of the 30 most-cited Dutch economists. In the 1980s, he advised the Mexican government on trade policy, and, in the early 1990s, he participated in the NAFTA negotiations on the Mexican side. From 1995 to 2005, he was Chief Economist of the Mexican Competition Commission. Since his retirement in 2006, he has acted as a consultant in competition and regulation. He has an ELO rating of 2185 from the International Chess Federation and likes to see himself as an out-of-the-box thinker.