Originally Posted by Achilles
In another thread, you insist that free markets should be allowed to operate without restriction, however when it comes to the military, you seem to think that should not be the case. You've yet to produce a sound economic reason to support this thinking.
Thanks for your response.
Even positive Governmental interference restricts the free market. It upsets market equilibrium, and harms competition in the private sector.
I suppose service rifles have become the de facto example of military products for this thread.
Example: There are three companies: X, Y, and Z corporations, that manufacture civillian firearms and are basically in a state of perfect competition(which is basically the case in civillian firearms anyway). The Army needs 300,000 service rifles, and any of the three large manufacturers are capable of meeting that quota. Should the government choose, say, Y Corp. to manufacture its weapon, it gives Y corp. a competitive advantage over its competitiors, due simply to the size and constant nature of the contract versus the annual free-market cycle that effects civillian firearms.
In manufacturing its own rifles the government interferes less with the private sector, which is left to its own devices until wartime, when government demand for more firearms would necessitate contracts for X, Y, and Z corporations, benefitting all three of them. Smaller lots could also be produced at smaller companies, thereby providing additional production capacity during times of war or other emergency.
Wer mit Ungeheuern kämpft, mag zusehn, dass er nicht dabei zum Ungeheuer wird. Und wenn du lange in einen Abgrund blickst, blickt der Abgrund auch in dich hinein. -Friedrich Nietzsche, Jenseits von Gut und Böse