Politicians and the wealthy tell us that capitalism works. That while there are occasionally disparities and disadvantages, the magic invisible hand of the free market fixes such problems over time. But four news stories demonstrate that this is all complete bullshit.
The first story involves T-Mobile lowering its prices, which caused other carriers to compete on prices. That’s what is supposed to happen, right? Prices get lowered by competition, right? Well, not here. You see Wall Street is loudly complaining that wireless carriers have to compete on price.
“The most disappointing thing is that AT&T is reacting to T-Mobile,” said Jefferies analyst Michael McCormack. “How long is it before Verizon reacts?”…McCormack (is) worried about the implication that industry revenue could be cut by $20 billion. “That’s clearly not a healthy sign.”
You read that right. Wall Street is “disappointed” that AT&T is lowering its price in the face of competition. Wall Street is “disappointed” that free market capitalism is actually working. Wall Street considers competition to be unhealthy for our economy.
The next story comes from Texas. A tea party “job creator” is outright pissed that applicants for jobs have the audacity to ask what the wages will be! Things were obviously much better in the old days when we kidnapped employees in Africa and brought them over on ships. You didn’t hear too much complaints about wages back then, right?
Seriously, wages are supposed to occur in a free market right? Employees have the right in this free market system to decide whether they want to work, based on the amount of wages, right? If no one is willing to work, that forces wages to rise. That’s how it’s supposed to work. But, apparently not in Texas.
Next up is a story about how low inflation is hurting the rich because consumers now have the freedom to put off purchases because prices are not rising as drastically.
You see, I thought free market capitalism was all about consumers having free choices. And those free choices picked winners and losers in the marketplace. Now we’re being told that we shouldn’t have that much choice. That we should pressured and forced to buy now rather than when it’s convenient or financially advantageous. Gee, how dare we try and take advantage of the mighty job creators?! Buy now, damn it… buy!
And last but not least is yet another example of a state trying to ban direct sales of motor vehicles to consumers. Namely, Telsa.
You see, the new car market is not a free market. It’s against the law for a manufacturer of automobiles to sell directly to customers. By law we have to buy through a middleman, the dealer. Telsa is trying to avoid a bunch of middlemen to lower costs and prices. That’s what supposed to happen in a free market, right? Efficiencies are created to lower prices and create competition, right?
The wondrous state of New York is passing a law to ban efficient direct sales to customers. They’re claiming it’s to protect consumers, somehow. But a quote from a spokesperson makes it perfectly clear:
“If you allow someone to come into the market with no overhead, that’s an unfair advantage.”
Basically what he’s saying is that it’s the government’s job to protect corporations with bloated overhead from innovation and efficiencies. The state of New York is actually going to make it illegal to compete against dealers based upon innovations and efficiencies.
Remember, all of these stories did not come from some left wing communist conspiracy theories nutjobs. These stories came directly from the mouths of the wealthy and from politicians. They acknowledge we don’t live in a free market economy. They admit that they shouldn’t have to compete on price, that employees are more synonymous with slaves than with equal members of society, that we shouldn’t really have choices and advantages as to when we buy, and lastly, that it’s the government job to ensure that prices remain high and that middlemen continue getting their cut.
In a nutshell, the copyright right industry does not actually sell products, it collects government mandated monopoly rents. When faced with actual competition, instead of competing, it sues based upon those monopoly rights.
Well, this newest edition of why the copyright industry cannot compete comes to us from book publishers. According to a column published by the New York Times, the problem with ebooks and the loss of power of publishers, is that prices will be set according to market fluctuations. Seriously. According to David Streiteld, the mechanism that sets prices on everything else in our lives should not be applied to books. Because, well, because… that’s why. Here’s a quote.
One consequence of this shift is that soon no one will know what a book’s “real” price is. Price will be determined by demand and perhaps by whim.
Another quote complains that the demand for books being influenced by fluctuating prices is somehow beneath the sale of book,
“That’s how you sell widgets, not books.”
And there’s this tasty tidbit:
“Discounting, and especially inconsistent or shifting discounting, really messes with a publisher’s ability to price a book fairly and accurately to its cost.”
An anonymous moron at Slashdot summed up the article thusly,
“Economists, publishers, and readers no longer have confidence that a book will cost the same amount this week as it did the last.”
There is so much wrongness to deal with, but I’ll just jump in.
First, there is no “real” or “accurate” price for anything. There is only what people are willing to pay. Some people will argue that the price should be the manufacturing costs plus a profit. But that’s simply not true. I could build a factory that changes my shit and urine into very ugly figurines, at a very high cost. I could start selling those very ugly and smelly figurines at 20% over my costs. But, here’s the important part, if no one is willing to buy them at that price, the price is not real.
Second, who cares if customers are not willing to pay the production and manufacturing costs? That’s not a problem consumers should ever be concerned with. If people are not willing to pay such costs, you should find new ways to reduce the costs, find new sources of income to subsidize your product (e.g., touring to subsidize the release of new music) or you go out of business. If people are not willing to pay to have your product produced, it should not be produced.
Third, the fact that prices will fluctuate means nothing. We live in a capitalist society and deal with fluctuating costs of goods every fucking day.
For the longest time, books and other copyrighted goods were priced not on free market demand, but from government fiat. If you wanted to read a particular book or listen to a particular song, you had to pay whatever price was dictated or face a penalty of law. That’s why book and CD prices were so ridiculously high back in the 90s. The idea of paying nearly 20 bucks for a CD of music seems ludicrous now. And we have the internet to thank for that.
Before the internet, the copyright industry could create artificial scarcity. A music label didn’t produce an infinite number of CDs nor did a publisher release an infinite number of books. Releases were limited which created an artificial scarcity, which artificially increased demand.
But the internet pulled back the curtain on such artificiality. We now know that every person on this planet can get a copy of a new song, movie, or book. Because data is not scarce. And now that the curtain is pulled back, the idea of buying movies, music, and books at the old artificial monopoly price, is simply asinine. We won’t do it. And no amount of complaining will help.
We’re entering a new era. Much in the same way buggy whip manufacturers had to adapt, so will publishers. Maybe we won’t even need publishers in the future. Maybe authors will simply self publish. Maybe we’ll look back and wonder why we gave publishers all that money for nothing. But we won’t look back and wish the publishers were still around. We won’t look back fondly for paying more than what a truly free and open market would bear.
A judge in California will order Safeway stores to stop selling cheap gas in order to “protect the competitors.”
Since when is it the government’s job to protect competitors from more efficient competition?
Since when it is the government’s job to quash innovative and successful business models?
The Judge claims that if Safeway is somehow too successful, all the other gasoline retailers will go out of business leaving Safeway with a monopoly. Which will hurt consumers.
First, if Safeway does become a monopoly, which is highly doubtful and there is no evidence that even one gas station has gone out of business because of Safeway, that would only leave the market wide open for more competition.
Second, it doesn’t matter anyway. Because even if Safeway’s business model is so successful that it can put every other gasoline retailer out of business, why wouldn’t other retailers adopt the same model? Maybe Safeway’s model is the best way to sell gas. Maybe if the Judge would butt out, Safeway’s model would become the de facto way of selling gas. And decades from now we’ll talk about the old days when there were these “strange gas stations that only sold gas, wasn’t that weird?”
A similar thing happened when fast food restaurants were first introduced. Sit down restaurants thought they’d be run out of business. They weren’t. Merely because you can buy a dollar burger from McDonalds does not mean you don’t want to spend 15 bucks on a nice rib dinner.
And merely because you can buy cheap gas at Safeway after you do your shopping, does not mean you won’t stop at a Sunoco station to buy gas on the way to grandma’s house.
Someone might complain that I’m unfairly criticizing the judge. Someone might argue that it’s not the judge’s fault, he’s only following a stupid law.
Sorry, but the judge will not get off so easily. If the statute is so vague that no actual proof of consumer (not competitor) harm is needed, the judge could strike it as being unconstitutionally vague.
On the other hand, if the statute requires specific evidence of consumer harm, the judge could have determined in this case there was not such sufficient evidence and dismissed the case, or at least denied the injunction.
If the statute only required proof of competitor’s harm, he could have used his balls and struck the statute as being unconstitutionally none of the government’s fucking business.
Sure he might have got reversed on appeal. But at least he would be a judge we could respect.
A wanna-be lawyer was denied a license to practice law because he had too much debt. Where did the debt come from? It was his law-school student loans. Sometimes life is unfair. Sometimes it’s draconian.
A long long time ago, before income taxes were imposed upon the citizenry of the United States, the Federal government made its money from tariffs. If you wanted to import your goods into the US, you had to pay the government. Tariffs gave the government its loot and protected our corporations from competition.
But as the US became a huge economic juggernaut, US corporations wanted to export our goods to the rest of the world. Those corporations fought against tariffs and demanded “free” trade. They wanted to sell our goods to foreign lands without additional costs and impediments.
This system worked for a while. Because we were the world’s largest exporter, we we able to sell tons of our stuff to the rest of the world. However, it finally came back to bite us. Starting in the 60s Japan got really good at building quality products and used our lack of tariffs to import them at dirt cheap prices. Now we don’t make any electronics in the US.
But, for corporations, it was still a great system. US corporations simply moved production to third world countries such as Mexico and to former second world countries such as China. So now we don’t build much of anything in the US.
What I find so deliciously ironic is that a corporation is actually complaining about this system.
Jim D’Addario, the CEO of guitar string manufacturer D’Addario, is complaining about China. He’s complaining that the Chinese are able to produce cheaper strings and sell them for less and he’s losing money on it. He defends using the United States government his own private police force as follows:
How is possible for the public to ask the legitimate manufacturers to bear the role of the government and police every instance of (trademark infringement) with a law suit?
First, if you cannot compete in this “free” market, you should go out of business. Second, if the only way you can compete is by spending my tax dollars, you should go out of business.
Corporations rammed down our collective throats that a “free” market system works best. Now it’s killing you because you’re utterly inefficient. You want my tax dollars used to protect your trademarks?! What the frick do I get out of it? Do I get a share of your profits. Frick no. I get nothing while you get richer.
Jim, I have a solution for you which would benefit all of us. If you want government protection, demand tariffs on imported goods. You benefit because the cheap labor China relies upon and environmental laws it ignores are balanced by the collection of tariffs. I benefit because the federal government would no longer need to tax me as much. So I’d have more money to spend on your strings.
Jim, if you want protection. Ask for tariffs. Not a hand out. Thanks!
Guitarist Jack White is being heavily criticized for the evil act of selling products at a fair market price. Wait, since when is selling products at fair market price evil?
Here’s a little background. Jack White has a record label. His label sells limited release collectibles. He used to sell them well under market value. However, some people would buy them and then resell them for significantly more on sites such as ebay.
White decided to cut out those middlemen and sell the collectibles directly on ebay. And because it’s an auction where people are able to pick the price they are willing to pay, we necessarily know the collectibles are selling for a fair market price.
But yet there a huge outrage that White is a money grabbing scum bag. Do these idiots work for free? When they last sold their car or house, did they sell it for vastly less than it was worth?
White is in the business of selling music. He’s selling music at a price people are willing to pay. If you don’t like his price, don’t buy it. But don’t bitch about it.
Bitching that you can’t afford a Jack White collectible is about as asinine and petty as bitching that you can’t afford a Rolex watch. Let’s put this in perspective. Try bitching about the high cost of Jack White collectibles to unemployed parents who have no idea how they’re going to feed or shelter their children.
This same erroneous argument is used against fair market concert ticket prices. The bands and concert promoters fight for tough laws against scalping. Unfortunately, scalping is simply buying low and selling high. There is nothing wrong with that. Our entire economic model is based on doing that.
The “problem” of ticket scalpers is that some tickets are priced way too low. Bands should follow Jack White’s lead and sell their tickets on an ebay type site. Since the tickets would be selling for a more accurate market value, there would be no profit in buying and reselling. Scalpers would be eliminated in a second without a single law being passed.
Why musicians don’t do this is beyond me. They have a choice. They should either sell their tickets at a fair market value or accept that buying low and selling high is a fact of life. If international corporations are allowed to do it, so should the little guy.
I just came across this quote in an article about a Chinese factory:
Management of the living quarters has recently been outsourced to a local operations company in an attempt to address concerns about an employer managing living conditions of its workers.
You know we’re screwed when factories in China start outsourcing their own management.
I’ve written previously about the Right’s war on the unemployed. Glenn Beck thinks anyone without a job is lazy. Corporations are refusing to hire the unemployed. And of course Senator Hatch said that the unemployed are good for nothing drug addicts.
Since most GOP voters have jobs, it makes sense for the GOP to attack the unemployed. They’ve been doing that for years. Heck, centuries. Which is ironic, because the Right actually loves high unemployment because it lowers wages and benefits.
But the GOP’s latest move is to attack the employed. Not the unemployed, but the employed. According to an article on the Huffington Post, GOP politicians are promising to ensure that public servants such as teachers, the police, and firefighters lose their jobs.
The GOP are promising to get voters fired and to increase the unemployment rate. But yet the GOP has a rabid and large support base?! Thomas Frank asked, What’s the matter with Kansas? I’m asking, what’s the matter with the US?
The answer is that the Right has become the new “me generation.” It’s all about them and protecting what they have and what they feel they deserve. Their hopes and dreams for the future are crumbling. They know their country is worse off now than when they were kids. But instead of actually working to make our society and community better, they make scapegoats out of the weakest and most unfortunate and demand via protests that the government take action to help them.
I’m sure you’ve seen the video of Tea Baggers attacking a man with Parkinson’s. To the Tea Baggers the guy is worthless because he cannot carry his own weight and wants things for free.
Do they know the guy? Are they certain he didn’t pay for insurance but was arbitrarily denied by an insurance company death panel? Do they know he’s not a veteran who is not getting the care he deserves because the GOP has turned its back on veteran hospitals?
No they don’t. They’re just attacking him because they feel he’s “taking” from them. And as I said, it’s all about them.
The same is true of healthcare reform. Do you know why the vast majority of people on the Right feel that healthcare reform is not needed? It’s real simple.
It’s because the vast majority of people on the Right are healthy. That’s it. When you’re healthy, health insurance works because you’ve never given your insurance company any reason to arbitrarily deny a claim. So for the vast majority of people in the Right, they feel that health insurance works.
And since it’s all about them, they don’t want to change anything to help people who are not being served by health insurance. Even though the new system would not change anything in their lives, and would drastically change the lives of the uninsured. Even though it would remove a huge burden of paying for insurance from the private sector and place it on those who actually use it. Which is normally something the Right loves. Even though it would simplify the process by eliminating redundant red tape and bureaucracy, something else the Right loves to do.
But the Right is against it. Because it’s all about them. They’d rather have 20% of the population unable to work to save a few dollars a year on their taxes. They’d rather have children die from lack of food and medical care rather than settle for a 42″ TV instead of a 46″. It’s about their money, not someone else’s livelihood or life.
And the Right justifies their anger by blaming anyone who is not fortunate. Did the guy with Parkinson’s go out of his way to get that disease? Was it his fault? Nope. But as far as the Right is concerned, the worst sin is not being able to support yourself. If a child dies from lack of medical attention, it’s the lazy drug addicted parent’s fault.
It is never the Right’s fault.
I’m reminded of a drive I made to Colorado. I stopped in a small mid-western town and read one of those historical plaques. Back in the 1800s the town was formed by Christians. It was a farming commune. Everyone farmed for the common good. Everything you grew was for the community. The old and less fortunate were taken care of, including health care. Schools were provided by the community for the entire community.
About a 100 years ago Christianity was about community. Heck, my grandparents met at a communist hall in the UP. Back then not being concerned with your own selfish wants and desires was very Christian. Working for the common goal of helping your community was very Christian back then. I think the word I’m looking for is sacrifice. Back then it was common for Christians to sacrifice their own wants and desires for the greater community. (It seems there was some famous Jewish carpenter who sacrificed his life for the greater good. What was his name again?!) Anyway, those days are gone. It’s all about “me” now. What can the government do for “me”?
They say the rich are different. I agree. They seem completely unable to accept or understand (or care about) the impact the current financial crisis is having on our nation’s middle class.
Glenn Beck’s “solution” to our incredibly high unemployment rates is for the unemployed to simply “get a damn job.” Yeah, why didn’t I think of that. Maybe I could get a job as a shock jock and call up and make fun of a woman on the air who had just lost her baby due to a miscarriage. That sounds like fun, right?
Some corporations and recruiters have decided that the unemployed are not worth employing. The mere fact that these former middle classers lost their jobs, due to the outrageous actions of Wall Street (which the remaining middle class is paying to fix with the little money they have left), they are now tainted and unworthy of ever working again.
Now Senator Hatch thinks that not only are the unemployed too lazy to find work. Not only are they unworthy of being given a chance to work. They are all good-for-nothing druggies who should be rounded up, drug tested, and arrested. He wants mandatory drug testing for the unemployed.
Television must be the opiate of the masses. Our large TVs must be the only thing keeping blood from flowing on Wall Street and in DC. It’s lucky for the status quo that the digital transition occurred just in time to give us something big and shiny to look at while all of our hopes and dreams crumble away.
There’s a lot to be depressed about in the news recently. Earthquakes. Sink holes. Oil spills. But the worst news I read all week is that job recruiters are refusing to even accept employment applications from the millions of people in this country who are unemployed through no fault of their own.
This does not make any sense at all. It’s simply mean spirited. I have to wonder how Glenn Beck could rationalize this.
Some people have said they’re doing it to weed out all of the applications they get from people who don’t want to work, but still need to send out applications to keep their benefits. But that plan wouldn’t work, in fact it’d have the opposite affect. By telling people who don’t really want employment that you’ll never hire them, you’re ensuring more of those types of applications.
I’m not one to propose new laws, but I really think that employment discrimination against the unemployed should be illegal.