4 ms·
An idealised race to the bottom which just eats into excessive profits would be great. But typically companies want to maintain their margins, so it's the staff
by tweetle_beetle 6y ago
An idealised race to the bottom which just eats into excessive profits would be great. But typically companies want to maintain their margins, so it's the staff that get squeezed, or the service, or the ethics, or all of the above.
And it often ends up warping the market so that choice is removed, a premium economy does not always spring up. To take your TV example, modern mainstream TVs now bundle spyware/malware/adware. Yes the hardware is better than it was, but it is being invisibly subsidised by the reduction in ethical standards. And now none of the major players can now afford not to do it if they want to compete. Is this exactly what people wanted? The market no longer offers allows them to choose and they aren't being fully informed about the implications.
It's really a failing of marketing - being unable to continue to justify the price of a product (whether it was warranted or not).
- Super_Jambo 6y agoWe could fix it with better regulation of product information though. No one seriously argues against weights and measures legislation. We've supposedly had an information revolution but I still can't really trust any source of product information online.
- refurb 6y agoThis is a fair comment. The free market can certainly be made "better" (however one might define it) by certain interventions. Your example of weights and measures is a good one - the market benefits from an increase in knowledge of both parties in a transaction. Another good example is FDIC insurance. We could have little to no banking regulations, but that would also introduce a lot of uncertainty and result in wild swings when the economic situation changes. Tell depositers that the gov't will back their savings helps stabilize the banking system which actually benefits the market (the same way a stable and predictable government/legal system benefits the market).
- mandelbrotwurst 6y agoThis is somewhat tangential, but why refer to a regulated market as a "free" market? I hear this often and it seems like a contradiction.