@Unpretentious,
Also thank you for the clear explanation. In a free market there is no limit on the number of profit driven participants, so that creates a natural balance for any one individual or group that try to control the market.

this is my first post and i am not good at writing…please excuse me if i am not clear enuff

very welcome Ranjit, and your answer is valid. Don’t worry about writing skills or language. The only thing important is rationality of Ideas.

@ Shumit
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Ranjit has explained the issue properly. You see, free market allows you to be the speculator/hoarder. So since you believe that you are more socially responsible than the other speculator and the other speculator is actually trying to loot society, you can opt for checking that speculator/hoarder by yourself. You are free to provide the cure for the corrupt hoarder.
Hence, it is impossible for that, or any other hoarder to actually act anything against the common consumer, because any common consumer can become not only the service provider/dealer/speculator/hoarder, but he can be the producer too, there is n0 restriction on anybody.

But now, consider the case of government. Government illegalizes speculation/hoarding, hence (as already explained in article) people starve and many dies at the time of maximum need. Also, the illegalization makes speculation and hoarding too much risky and hence costly (the fear of police and the cost of bribing police and politicians also includes in it).

Thus the marginal utility of Hoarding/Speculating decreases while cost and risk involved increases. Hence, most of the potent speculators/hoarders denies providing their services to the society freely. In such case, even you (howsoever responsible you are) will deny being a speculator/hoarder (because at initial, it would be illegal and it would be extremely risky and costly too) You may be able to pay for storing wheat ( or oil) at its cost, but you will fail in paying bribes and commissions to politicians and police. Yet, speculation won’t stop, rather it would become sparse, and hence the profits inhibited in speculation will increase enormously. Obviously, some of the speculators (very few) will choose to take the risk and act illegally, even politicians and police will encourage them because that provides them extra huge incomes. And that would create Oligarchy/Syndicalism/Corporatism, and that actually hurts people/common citizen and all of us.

So you see, the best way to avoid such scenario is to let the market be free and avoid government control because government brings corruption, robbery, poverty and starvation.
Not only that, government forces the true and honest soldiers of consumers (the speculators and hoarders) to become corrupt. But trust me no matter how corrupt they become, only the hoarders and speculators saves the common man from starvation.

this is my first post and i am not good at writing…please excuse me if i am not clear enuff

However, I have one query in that you refer to the market speculators as those who “…guard the market and hence the well-being of consumers as true and honest soldiers…”

This is a complicated statement as in terms of social politics, who was it that selected the market speculators to act as guardians and soldiers on behalf of everybody else? Who regulates the speculators and ensures that they themselves are not trying to control the market by setting up opposition to the producers?

I think I understand the overall point of what you’re saying: that anybody interested in profit and acting rationally in a free market will move to safeguard profits by reacting and predicting the current market trend. This more or less is a selfish act for the profit of the speculator, but what it means for society is that it acts as a balance to producers who may be trying to control the market by reducing production of commodities and increasing prices.

If one or more of these speculators were to act in a way to try and control the market themselves then that might lead to problems: say hypothetically there was a genuine reason for reduced production say crop disease or natural reduction of oil reserves and the speculators foresaw this and started hoarding to ensure their own supply. According to your explanation, in this situation, the producers and other speculators would have to react to this hoarding by producing more. However, what if they simply cannot produce more (as there is a genuine reason for lack of production)?

In this case the speculator becomes the problem maker and needs to be regulated with penalties otherwise they will create further famine/shortages.

This is a hypothetical situation and may not actually be realistic, but if it is realistic then it does highlight a need for some ‘realistic restraint’ of the otherwise free market.

Other than the question about who selects and regulates the speculator, I think your points about a single government controlling the market, or allowing monopolies/oligarchies to control the market is a serious problem and a direct cause of shortages and famine.

Any steps towards moving to a free market will ensure that natural balances are allowed to act against any attempt to subvert the economy.

I still think that this system in it’s purest form - although fair - is not as socially responsible as it could be and so I do recommend some regulation to ensure that the ‘little guy’ or less successful people can have some gains if they work legally for it, instead of leaving them to their fate.
But then maybe I’m being the idealist here!

Thanks