Inequality
Advocates of a freely operating price system often liken it to a political democracy where all voters can cast their votes for the candidates of their choice, with everyone who is eligible having an equal say: the price system, according to this line of reasoning, is a consumers', economic democracy; every time we go out and buy a particular good, we are affecting the demand for that good, and hence also its profitability and supply. Hence, the simple act of buying a good is akin to casting a 'vote' in favour of the production of that good, and is the way in which consumers determine how scarce resources should be allocated.
Unlike the political democracy however, in which each person has equal voting rights, the consumer democracy described above, given the unequal distribution of income that exists in most capitalist economies, is unlikely to be one in which all have an equal say _ clearly voting power is directly related to income so that the rich would have many more votes, and thus a much greater pull on resources, than the poor. Consequently, the resulting pattern of resource allocation may overlook the pressing, often life and death needs of the poor, and reflect instead the more trivial wants of the rich. In the economics of the market place, human wants are those that are supported by effective demand i.e. demand backed by the ability and willingness to pay the market price. Human needs, however, if unaccompanied by the wherewithal to pay, are simply ignored. This is the overriding reason for the existence of mal-nutrition and starvation in the world today: it is not that there is an overall shortage of food - there is more than enough in total terms to feed everyone; the problem, quite simply, is that those who need the food lack the money to pay for it.
Hence the 'free' market, given the degree of inequality which typically exists, is likely to be one in which many people are severely disadvantaged in terms of their market power. 'Electoral successes' will be the fast cars, exquisite jewellery and luxury hotels etc. for those who can pay, with basic health care, education, safe drinking water and nutritious food for the poor almost certainly 'losing their deposits'. Clearly, some consumers are a lot more 'sovereign' than others!
