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I would go even further and suggest that a lot of the high standard of living we enjoyed post WWII can be attributed to all these inefficiencies of cost informa
by malandrew 6y ago
I would go even further and suggest that a lot of the high standard of living we enjoyed post WWII can be attributed to all these inefficiencies of cost information. Due to the lack of transparency, pretty much every profession and industry was able to pad enough margin into their business that they could make a decent living.
The acceleration of information diffusion means that no one's margin is safe anymore and why we have Bezos' favorite aphorism "Your margin is my opportunity".
Historically, margin was not the opportunity except maybe between grocery stores or gas stations (businesses where discovery of two or more providers of the same good/service was trivial and all where easily accessible to the customer). Historically, simply providing the customer with the product or service they need was the opportunity. It was only when discovery became easy (first the yellow pages, later the internet) and competition ceased being local (first franchises, later the internet) that margins eroded across the board.
- maxerickson 6y agoYour argument is that higher prices for goods increase standard of living? Isn't the standard argument based on increased productivity?
- malandrew 6y agoMy argument is that less price transparency (due to less competition and diffusion of information about prices) produced less aggressive competition based on margins. You only needed to provide a good or service people wanted and charge them a price they were willing to pay. There was far less need to worry about competing on price.
- JAlexoid 6y agoI loved when there was no competition for stuff in my town of 100k people.... LOL! (I suspect that you aren't actually against competition. But all competition is based on price, ultimately.)
- malandrew 6y agoThere's no value judgment in my statement. I'm for competition, but I'm just pointing out that it's easier to everyone to embed a margin they can live on when there is less competition.