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Banking is an extremely constrained product. Whether it's formal legal rules, or the customer taste for "I don't want a credit card that's only accepted at six

by hakfoo 3y ago

Banking is an extremely constrained product. Whether it's formal legal rules, or the customer taste for "I don't want a credit card that's only accepted at six stores I never use", you can't really change the offerings. In a world governed by economic sanity, the obvious conclusion is "run it as a tightly regulated monopoly for maximum efficiency and pass the savings back to the parts of society doing more interesting things". But we live in a free-market cult, so we still have to try to invent a reason for competition. This means trying to doll up the product with periphery (a more attractive physical card, or a rewards scheme that's optimal for a different usage pattern), or fiddling around with the prices and fees. On a specifics level, he's years behind on the cross-promotions though; here several local sports teams slap their logos on the local credit unions' card offerings. How much they're paying for the logo instead of returning to account-holders through better rates is not disclosed.

unmole 3y ago
> run it as a tightly regulated monopoly for maximum efficiency Name a real world monopoly that maximizes efficiency.
- wifnsiworjf 3y ago
  The UK’s NHS delivers healthcare to everyone at half the cost of the US system (9% of GDP vs 18%) Doesn’t get more socialist than a healthcare system for the people, free at the point of use, paid by taxation. Hence it’s being dismantled to ensure that answers to questions like these line up with ideology.
- zen_of_prog 3y ago
  Depends on the definition of efficiency since a lot of it comes down to who or what is deciding to > pass the savings back to the parts of society doing more interesting things But in terms of successful monopolies, a lot of state-owned oil companies like Saudi Aramco, transportation companies like SNCF, Google 10 years ago, and Bell 50 years ago
- ElevenLathe 3y ago
  It doesn't need to be maximally efficient, just efficient enough that we can stop thinking about it. Lots of electric utilities fit this bill. So does the post office. I'm sure there are others. These organizations aren't fighting to save every penny or inventing new features nobody is asking for to differentiate themselves from other offerings, but shopping around all the time has a cost too, so we're probably better off just letting the post office be a little inefficient. It costs us each an extra few cents per stamp, but in return we don't have to shop around for stamps and there is always a post office nearby, everywhere in the country.

by hakfoo 3y ago

unmole 3y ago

> run it as a tightly regulated monopoly for maximum efficiency Name a real world monopoly that maximizes efficiency.

wifnsiworjf 3y ago
The UK’s NHS delivers healthcare to everyone at half the cost of the US system (9% of GDP vs 18%) Doesn’t get more socialist than a healthcare system for the people, free at the point of use, paid by taxation. Hence it’s being dismantled to ensure that answers to questions like these line up with ideology.
zen_of_prog 3y ago
Depends on the definition of efficiency since a lot of it comes down to who or what is deciding to > pass the savings back to the parts of society doing more interesting things But in terms of successful monopolies, a lot of state-owned oil companies like Saudi Aramco, transportation companies like SNCF, Google 10 years ago, and Bell 50 years ago
ElevenLathe 3y ago
It doesn't need to be maximally efficient, just efficient enough that we can stop thinking about it. Lots of electric utilities fit this bill. So does the post office. I'm sure there are others. These organizations aren't fighting to save every penny or inventing new features nobody is asking for to differentiate themselves from other offerings, but shopping around all the time has a cost too, so we're probably better off just letting the post office be a little inefficient. It costs us each an extra few cents per stamp, but in return we don't have to shop around for stamps and there is always a post office nearby, everywhere in the country.