RMT can rather easily manipulate the AH and claim a monopoly on it. They have done this countless times in the past too.
The market system is harder to manipulate because you can't manipulate who is buying from who.
Either way they will turn marketplace into an AH at which point people complaining about a lack of an AH are silly.
I don't make this stuff up. I saw it happen on all matter of items in FFXI, from beehive chips to sniper rings and even scorpion harnesses for a time on Gilgamesh. It never happened on really high ticket items, but low-mid range stuff that everyone used. It also never went on for long periods of time, whether people got banned or moved on to other items I don't know. Never said it was a rampant problem, but it did happen and was obviously noticeable when it did. Who knows, maybe the easily accessible gil in this game will change that should the AH go in.
OK let me explain this to you.
Lets say RMT start raising the price of beehive chips from 2000 gil per stack to 10,000 gil per stack.
This creates something called an "incentive"
This incentive to -all- players is that farming beehive chips will make them fast gil
Many players then farm beehive chips
The auction house gets flooded with beehive chips
At a high price like 10,000 less people are buying beehive chips
So you get something called undercutting
People consistently price their stacks lower to sell them
over time an economic concept called EQUILIBRIUM is reached
This is EFFICIENT!
Now in ffxiv lets say the same thing occurs
RMT boost up prices hardcore
But here, there is no ah, so theres no way to efficiently find undercutters
Since RMT can horde stacks, they can monopolize the market
In other words RMT can get 100 stacks and sell them all on one or 2 retainers titled WHATEVERITEMSALE
Other people might get 1 or 2 stacks and price them cheaper
but to get the undercut cheaper products you have to search through 1000 retainers in 3 different cities and multiple wards
Therefore, monopolizing is SIGNIFICANTLY easier in FFXIV than in FFXI.
There is a reason why all the economies in the world that strive to get near auction-house type of sales (capitalist economies) where equilibrium price is easily and quickly reached, are the ones that are successful.
Economies like africa where there are few corporations and lots of little markets tend to be less successful, because they are unable to reach equilibrium price easily and thus create inefficiency.
With an AH -everyone- on the server is better off
with a market-based system -everyone- is worse off
Thats not to say market based system is bad. Its benefit to the game is that it makes crafting more interesting. Instead of things reaching an average price on an AH, prices are unstable and you can get deals or barter for deals. This makes crafting a lot more ineteresting.
However, take my word for it as an Economist, there is nothing economically beneficial about the FFXIV system over the FFXI system. FFXIV's system is more prone to monopolization, more inefficient, and doesn't allow for equilibrium price to be reached for 95% of the items.
Please don't try to argue that "youve seen it happen" in ffxi. What you saw has nothing at all to do with the AH system but rather to do with RMT's camping certain drops + nms and normal players being unable to out-claim them or finding it not profitable enough to out-claim them untill the price get high.
If you can come up with an economic argument for the benefits of this system over the other, go for it. But its clear you have no concept of what supply and demand is and you don't understand how a monopoly functions. So i doubt you can put one together.
And im sorry if i seem condescending, its just really annoying to me when people use arguments that are -completely- opposite from basic economic knowledge that everyone should know. To me you are basically trying to argue that 2 apples + 3 apples = 100 apples