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The Myth Of Perfect Knowledge

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Wikileaks has gotten their hands on a copy of Obama’s phony TPP trade bill. It contains 29 chapters but only 5 pertain to trade. Wikileaks will be publishing the entire bill and they have already released the chapter on Investment. It’s very interesting. It is written in a such a way as to give multinational companies a huge advantage on trade. If a public hospital is built close to a private one, the private hospital has the right to sue the country for expected losses. That is outrageous. Here is where you can find the chapter on investment:


One of the conditions for the free market is perfect knowledge otherwise equilibrium is impossible.... Will there be anything juicy and anti-democratic in this trade bill.

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It should be pointed out that not all advocates of free markets say anything about equilibrium or perfect knowledge. Hayek is an example. Maybe he was completely wrong, but his arguments were not those of most contemporary economists. It is worth looking into this. Basically according to his line of reasoning, markets are essential because there isn't perfect knowledge - people can communicate bits of their knowledge through markets.

It is possible to accept Hayek's argument that markets are essential, but also to claim that they do a much less imperfect job than we'd like, and so want more government than Hayek would advocate - see for example "Socialism After Hayek."

"Trade deals are ridiculous. A real trade deal could fit on one page. These long trade deals are clearly about something else." Can't remember who said this but I think this is what every free market advocate thinks.

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