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I would do some nitpicking here: The market _rewards_ low prices. But the market _punishes_ low quality and untimeliness. Why do I phrase it this way? Because

by corty 5y ago

I would do some nitpicking here: The market _rewards_ low prices. But the market _punishes_ low quality and untimeliness. Why do I phrase it this way? Because the only market mechanism is a sale, you either buy or you don't. Low price is visible before a sale, so a new sale is reward for the low price offered. Quality and timeliness are only apparent after a sale, so can only be punished retroactively by not buying again. The punishment signal is also far weaker than the reward signal, lots of goods are not bought too often and problems get forgotten by customers, alternatives may have their own problems, etc. And prices can be compared objectively for standardized goods, and at least easily for other goods. Quality and timeliness are often in the eye of the beholder, subject to variation. Comparisons in those areas are also systematically prevented by most vendors.

ehnto 5y ago
> Why do I phrase it this way? Because the only market mechanism is a sale, you either buy or you don't. That's not always true. When a rail network gets privatized, the argument is that the market will make sure it's a good service still. But they are usually paid by the government, not the patrons. The commuters vote becomes negligible, and the rail network has every incentive to optimize for a minimum viable network that meets their government set targets while the service gets worse and worse in all other metrics. Seats are shittier, service is less clean, graffiti stacks up, railstock gets rickety etc.
- corty 5y ago
  That railway example is just a plain market failure, and an uncorrectable one at that. Markets only work under certain conditions, very important among those: absence of monopoly, monopsony and limitations that work to the same effects. A privatized rail network is still the only rail network in the country or region, so still a monopoly. If you hack it to bits and split it up too much, it will be useless, connectivity is paramount in that business. If you leave it as a large network (or several large networks) it will be a national or regional monopoly. Having only the government pay is a monopsony. Limiting building new stations and tracks (which the government will have to do at some point, if real estate prices don't) will also prevent competition. So having a functioning rail market is impossible, therefore any argument about market mechanisms involving railways (or roads, water, gas and electricity distribution) is nonsense: Those can never be proper free markets.

by corty 5y ago

ehnto 5y ago

> Why do I phrase it this way? Because the only market mechanism is a sale, you either buy or you don't. That's not always true. When a rail network gets privatized, the argument is that the market will make sure it's a good service still. But they are usually paid by the government, not the patrons. The commuters vote becomes negligible, and the rail network has every incentive to optimize for a minimum viable network that meets their government set targets while the service gets worse and worse in all other metrics. Seats are shittier, service is less clean, graffiti stacks up, railstock gets rickety etc.

corty 5y ago
That railway example is just a plain market failure, and an uncorrectable one at that. Markets only work under certain conditions, very important among those: absence of monopoly, monopsony and limitations that work to the same effects. A privatized rail network is still the only rail network in the country or region, so still a monopoly. If you hack it to bits and split it up too much, it will be useless, connectivity is paramount in that business. If you leave it as a large network (or several large networks) it will be a national or regional monopoly. Having only the government pay is a monopsony. Limiting building new stations and tracks (which the government will have to do at some point, if real estate prices don't) will also prevent competition. So having a functioning rail market is impossible, therefore any argument about market mechanisms involving railways (or roads, water, gas and electricity distribution) is nonsense: Those can never be proper free markets.