No market is ever completely free, and probably that is a good thing, as of course what you end up with if the government is not watching are strong-arm tactics and fraud and cooperative customer gouging (where everyone in a given business agrees on prices). Competition is necessary for real free markets, and competition has to be enforced by government. Individuals will do everything they can to avoid having to compete.
Here in Cambodia one learns to bargain and one learns to grease the wheels. They are two skills that take time to absorb. Non-negotiated prices is what everyone claims but as you are about the leave the store suddenly the attitude changes. The magic to getting a good price for things is to leave the shopkeeper with his or her face intact.
Minor government officials would die if they didn't get bribes, but one has to be able to see when and where to do it, and face is again the important thing -- the extra money is a "reward", not a bribe. Much the same applies to people coming out to repair things or do work -- there of course it is a "tip," and this practice is found everywhere, and people don't even see it as bribery.
Whenever the government tries to impose price controls, such as in Vietnam where the prices of precious metals and currencies are controlled and it is illegal to exchange VND (their currency) into something else, you have a sort of black market, except because of a steady flow of bribes that work their way to the top, is rarely enforced (but don't try to do it yourself unless you are in the network).
This sort of black market is essential in such a legal frame because otherwise of course one would not be able to get foreign currency needed to pay for the imports you need to keep your factory going.
When a government leader sees a black market, in Vietnam they try to profit from it, in Cambodia nowadays they tend more to crack down on it. Both approaches are harmful. It is better to look at what has caused the black market to develop and change the laws so that it dies on its own. Laws against gambling and hooch and prostitution, as well as price controls or government monopolies on something all produce black markets and a wise government will understand this and see that it is best to step out of the way as much as possible.
Of course some black markets can't be handled that way -- such as medical quacks or fencing operations. Here the police need to be paid enough to keep them honest.
Here in Cambodia one learns to bargain and one learns to grease the wheels. They are two skills that take time to absorb. Non-negotiated prices is what everyone claims but as you are about the leave the store suddenly the attitude changes. The magic to getting a good price for things is to leave the shopkeeper with his or her face intact.
Minor government officials would die if they didn't get bribes, but one has to be able to see when and where to do it, and face is again the important thing -- the extra money is a "reward", not a bribe. Much the same applies to people coming out to repair things or do work -- there of course it is a "tip," and this practice is found everywhere, and people don't even see it as bribery.
Whenever the government tries to impose price controls, such as in Vietnam where the prices of precious metals and currencies are controlled and it is illegal to exchange VND (their currency) into something else, you have a sort of black market, except because of a steady flow of bribes that work their way to the top, is rarely enforced (but don't try to do it yourself unless you are in the network).
This sort of black market is essential in such a legal frame because otherwise of course one would not be able to get foreign currency needed to pay for the imports you need to keep your factory going.
When a government leader sees a black market, in Vietnam they try to profit from it, in Cambodia nowadays they tend more to crack down on it. Both approaches are harmful. It is better to look at what has caused the black market to develop and change the laws so that it dies on its own. Laws against gambling and hooch and prostitution, as well as price controls or government monopolies on something all produce black markets and a wise government will understand this and see that it is best to step out of the way as much as possible.
Of course some black markets can't be handled that way -- such as medical quacks or fencing operations. Here the police need to be paid enough to keep them honest.
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