6 ms·

It is true that governments can be complicit or implicated in formation of monopolies, but I personally think the more fundamental problem with the idea of free

by omeid2 8y ago

It is true that governments can be complicit or implicated in formation of monopolies, but I personally think the more fundamental problem with the idea of free market is the assumption that consumers afford meaningful consideration and choice. I believe that people, generally: don't vote with their money for greater good but rather personal utility, by choice or lack of economical standing (A form of The Tragedy of Commons), poorly understand the long term impact of their choices, people’s choice is swayed by deceitful and psychological trickery of targeted advertisement. I am not sure how free market can address this without outside (generally legal or consumer advocacy) intervention.

ethbro 8y ago
Hmm, based on your interpretation, it seems like a lot of money could be made by offering people ostensibly free services, while quietly collecting and monetizing their data. But who knows if your theories about people choosing convenience are accurate...
pdonis 8y ago
> people, generally: don't vote with their money for greater good but rather personal convenience Not personal convenience, but personal benefit--people want to be better off after buying something than they were before. That in itself is a perfectly reasonable thing to want. There are, generally speaking, two potential problems: (1) people might misjudge whether they will actually be better off (through lack of information or lack of understanding or failure to recognize longer term consequences); (2) people might individually be better off but society as a whole could be net worse off due to externalities (costs not borne by the people making the choices and so not considered by them). It is true that these problems are unavoidable in a free market. However, outside intervention does not, in general, solve them. In fact it almost always makes it worse, because whoever is making the outside intervention has even less at stake in the choices about what to "vote with money" for than the people making those choices. I think the best we can do is to try to give people the best tools we can for making their own choices, not trying to dictate those choices by outside intervention.
- omeid2 8y ago
  > Not personal convenience, but personal benefit You're right, personal benefit is a factor too, so I replaced "Convenience" with "Utility" which is more apt and covers both Convenience and Benefit. > It is true that these problems are unavoidable in a free market. However, outside intervention does not, in general, solve them. Not convinced. For example, in Australia there exists laws that mandates that retailers either exchange or refund when products are "not fit for purpose" or "faulty", this simple law has eliminated a whole heap of bullshit products that doesn't work because people simply return them.
  - AnthonyMouse 8y ago
    > For example, in Australia there exists laws that mandates that retailers either exchange or refund when products are "not fit for purpose" or "faulty", this simple law has eliminated a whole heap of bullshit products that doesn't work because people simply return them. Consider the trade off you're making. Without that law, some retailers will have more generous return policies than others, and the first group will have higher prices (because the policy costs them money). If you prefer that, you patronize one of those retailers, and they don't carry those products because they don't want the returns. But once you pass the law, the second category of retailers goes away. And they had lower prices, even for the items that weren't garbage.
    - KozmoNau7 8y ago
      In your example, the cheap retailers are subsidizing the price of the quality products with the ill-gotten gains from selling the crap products to less-informed customers. Those customers unwittingly waste their money, so that others can buy slightly cheaper products. The completely free market does not work in practice, because people are not rational, perfectly informed actors. They make non-optimal choices and tend to not learn from them, and they're easily swayed by advertising. Sensible warranty and returns laws exist because businesses have gotten away with providing lousy quality products for far too long. And consider the longer term effect of sensible consumer protection laws. If a product gets returned too frequently due to quality issues, the seller will stop carrying that item, improving the overall quality of his selection of goods on offer. The manufacturer will wise up and either improve quality or go out of business. In the EU, any online purchase can be returned no questions asked (in like new condition and original packaging) for 14 days after receiving the item, though you do have to pay the return shipping costs. This has markedly improved the quality of items on offer, because the sellers don't want to carry items that get returned too often, ie. crap products. Prices haven't gone up.

by omeid2 8y ago

ethbro 8y ago

Hmm, based on your interpretation, it seems like a lot of money could be made by offering people ostensibly free services, while quietly collecting and monetizing their data. But who knows if your theories about people choosing convenience are accurate...

pdonis 8y ago

> people, generally: don't vote with their money for greater good but rather personal convenience Not personal convenience, but personal benefit--people want to be better off after buying something than they were before. That in itself is a perfectly reasonable thing to want. There are, generally speaking, two potential problems: (1) people might misjudge whether they will actually be better off (through lack of information or lack of understanding or failure to recognize longer term consequences); (2) people might individually be better off but society as a whole could be net worse off due to externalities (costs not borne by the people making the choices and so not considered by them). It is true that these problems are unavoidable in a free market. However, outside intervention does not, in general, solve them. In fact it almost always makes it worse, because whoever is making the outside intervention has even less at stake in the choices about what to "vote with money" for than the people making those choices. I think the best we can do is to try to give people the best tools we can for making their own choices, not trying to dictate those choices by outside intervention.

omeid2 8y ago
> Not personal convenience, but personal benefit You're right, personal benefit is a factor too, so I replaced "Convenience" with "Utility" which is more apt and covers both Convenience and Benefit. > It is true that these problems are unavoidable in a free market. However, outside intervention does not, in general, solve them. Not convinced. For example, in Australia there exists laws that mandates that retailers either exchange or refund when products are "not fit for purpose" or "faulty", this simple law has eliminated a whole heap of bullshit products that doesn't work because people simply return them.
- AnthonyMouse 8y ago
  > For example, in Australia there exists laws that mandates that retailers either exchange or refund when products are "not fit for purpose" or "faulty", this simple law has eliminated a whole heap of bullshit products that doesn't work because people simply return them. Consider the trade off you're making. Without that law, some retailers will have more generous return policies than others, and the first group will have higher prices (because the policy costs them money). If you prefer that, you patronize one of those retailers, and they don't carry those products because they don't want the returns. But once you pass the law, the second category of retailers goes away. And they had lower prices, even for the items that weren't garbage.
  - KozmoNau7 8y ago
    In your example, the cheap retailers are subsidizing the price of the quality products with the ill-gotten gains from selling the crap products to less-informed customers. Those customers unwittingly waste their money, so that others can buy slightly cheaper products. The completely free market does not work in practice, because people are not rational, perfectly informed actors. They make non-optimal choices and tend to not learn from them, and they're easily swayed by advertising. Sensible warranty and returns laws exist because businesses have gotten away with providing lousy quality products for far too long. And consider the longer term effect of sensible consumer protection laws. If a product gets returned too frequently due to quality issues, the seller will stop carrying that item, improving the overall quality of his selection of goods on offer. The manufacturer will wise up and either improve quality or go out of business. In the EU, any online purchase can be returned no questions asked (in like new condition and original packaging) for 14 days after receiving the item, though you do have to pay the return shipping costs. This has markedly improved the quality of items on offer, because the sellers don't want to carry items that get returned too often, ie. crap products. Prices haven't gone up.