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Unread September 2nd, 2009, 04:47 PM
Henry Stein Henry Stein is offline
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Default Finally, a Fully-Free Market

Although Milton Friedman has recently acknowledged the erroneous assumptions of the free market philosophy, he was premature in his reversal, reflecting a not uncommon mirror image of erratic market tendencies. Had he waited a little longer, before his public confession of mistaken economic theory, he might have discovered that he had not gone far enough in his original direction. He came remarkably close to a super-theory of a "fully-free market" mentality.

Rumblings in the woods suggest that a broader free market philosophy is peeking up from the horizon. "Cash for Clunkers" was a roaring success, tempting people into buying new cars that may eventually be repossessed like their abandoned sub-prime financed homes. Recently, a California High School teacher improved student grades for a financial contribution, pocketing about $1,400 during one semester. Some New York City schools are paying children to stimulate academic performance. Finally, we are discovering the silver bullet of motivation: bribery.

I see unexplored possibilities for short-term solutions. Extending economic theory into education was a brilliant maneuver, paving the way for ground-breaking innovations to address previously unsolved problems in many arenas. Let us start brainstorming even further than we have in the past, using free market assumptions.

Consider the plight of many parents who cannot get their children to behave, even though they have read dozens of books on child guidance and attended scores of parent education workshops. The innovative "Cash for Compliance" strategy would establish a financial incentive scale for desired behaviors. For example: obeying a parental command immediately would earn a child $5.00 with a $3.00 bonus if the command is unquestioned, and a $2.00 bonus if it does not need to be repeated. For longer range plans, adopting parental advice about choice of friends would be worth about $10.00/month.

California is considering releasing thousands of people from prison, because keeping them in jail costs too much. Why not just pay them for not committing crimes? It might be too expensive to motivate them into becoming model citizens, but cost effective enough to reduce the overhead of law enforcement. If it costs $100,000 to investigate, arrest, convict, and incarcerate someone who stole $10,000, why not just meet them half-way and give them $5,000 and save $95,000 in overhead? Surely, some people will abuse this system by simply threatening to commit a crime in order to qualify for the benefit, but let's face it, no system is immune to exploitation.

Divorce is a often a costly, messy, adversarial experience that pours vast sums of money into law firms and ties up the courts interminably. The new "Dollars for Detente" would compensate people for staying in miserable relationships. A sliding scale could be devised for enduring indifference, rejection, depreciation, deceit, and betrayal. Even chronic anger and resentment could be reimbursed in an "earn while you burn" program. Women who no longer care about their husbands, but need more spendable income, could participate in the "Spitzer-Lysistrata" program. While sex for money is not a new idea, basing it in the home may avoid humilating prosecution and uncomfortable sexually transmitted diseases.

Insurance companies, eager to reduce even further their paltry reimbursements to mental health professionals, could eliminate them entirely by offering new incentives to their policy holders. A radical "Subsidizing Symptoms" program would either reduce insurance premiums drastically, or pay people directly for enduring their emotional distress, instead of seeing a therapist. Of course, this incentive may appeal primarily to masochists, who might even become wealthy in the process.

Having briefly explored the individual, couple, and family implications of a "fully-free market" approach to life, we would be negligent to omit the wider social application possible in government. Using California as a pilot program, the "Friedman-Madoff" plan might rescue Governor Swartzenegger and his Wild-West state from insolvency. The underappreciated and much maligned Ponzi scheme, although it has racked up a long line of victims, has not been applied on a large enough scale to prove or disprove its effectiveness as a short-term financial strategy. Utilizing the existing Lottery structure, Bernard Madoff could design a state-wide Ponzi scheme, after he is pardoned and assigned to 25 years of community service under the supervision of Milton Friedman.

You think I'm kidding?
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Henry T. Stein, Ph.D,

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Last edited by Henry Stein; September 2nd, 2009 at 06:17 PM. Reason: Corrections.
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