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This is a good illustration of the difference between capitalism and a free market. In a free market, "moats" like regulatory capture would not exist. In a mar

by pdonis 3y ago

This is a good illustration of the difference between capitalism and a free market. In a free market, "moats" like regulatory capture would not exist. In a market like this, where the customers--wheelchair users--are generally pretty savvy about what they need, a free market would have no trouble providing products that met customer needs at an affordable cost, because customers would have meaningful choices about who to buy from and who not to buy from, and customers would see the full cost of the products so they could make meaningful cost-benefit calculations. In capitalism such as we currently have, none of that is happening. The government aids and abets rich people who want to siphon off even more wealth than they already have by putting regulatory barriers in place that stifle competition, and it removes visibility into actual costs by forcing all medical products and services to be provided through health insurance, even when, as in this case, there is no insurable risk involved--it's an ongoing medical need that is already known (not a risk) and which is predictable (so insurance makes no sense anyway). The result, of course, is that the customers get shafted while rich people get richer.

kazinator 3y ago
Capitalism refers to the system of individuals pooling money together (capital) to start a venture that they couldn't if they acted separately. The idea of a company being a person-like legal entity with its own assets and liabilities is capitalistic. In a free marked that is absent of regulatory hurdles, it is far from guaranteed that costs would be affordable. Freedom from regulation about how wheelchairs have to be constructed would go hand-in-hand with freedom from regulation against monopolistic practices!!! In a completely free market, devoid of regulation, wheelchair makers can get together and fix prices. Or buy each other.
- JumpCrisscross 3y ago
  > idea of a company being a person-like legal entity with its own assets and liabilities is capitalistic It independently evolved in Rome and India to provide legal personhood to cities, guilds, public works and later, in the former, the Catholic Church.
- pdonis 3y ago
  > Capitalism refers to the system of individuals pooling money together (capital) to start a venture that they couldn't if they acted separately. That's one aspect of capitalism, yes. But in capitalism as it is currently practiced, most of the people who are accumulating capital aren't people that are trying to start new ventures. They are people that are already rich but think they aren't rich enough, who are unable to start new ventures themselves because they have no actual skills at providing valuable products or services, so instead they find some existing venture and siphon off all its wealth. (This pattern is not new, btw; it's the same way the "robber barons" in the late 19th century operated.) > In a free marked that is absent of regulatory hurdles, it is far from guaranteed that costs would be affordable. Nothing is ever "guaranteed". But the article under discussion makes it obvious that with regulations in place, not only are costs not affordable, but even the very existence of products meeting customer needs is not happening. A free market couldn't possibly do any worse. > In a completely free market, devoid of regulation, wheelchair makers can get together and fix prices. Or buy each other. This would only happen if it were economically more efficient for wheelchairs to be made by a monopoly. I strongly doubt that is the case. It's not the case for the vast majority of products and services. If it's not economically efficient, the monopoly (or price-fixing cartel) will simply be out-competed in a free market, because it will have no way of keeping other companies from producing at a lower cost. Historically, virtually all monopolies have been the result of government interference. (The original meaning of the word "monopoly" was a royal grant of the exclusive privilege to sell a particular product or service.) Most large corporations today are not the size they are because that is the most economically efficient way to deliver their products or services, but because it's the best way to buy government favors.
  - wesselbindt 3y ago
    > Historically, virtually all monopolies have been the result of government interference I'm with you on this. In general, the state (by definition) functions to protect the interests of the politically dominant class, which, under capitalism, is the owning class. From the haymarket massacre to Biden's strike breaking shenanigans, this is absolutely beyond dispute. The state will always facilitate monopolies. The only way to get rid of monopolies is for the workers to organize and overthrow the dictatorship of the owning class. Until that happens, it's all Disney, Amazon, and pseudo democracy.
ausbah 3y ago
private equity is just exploiting existing regulations that already make it hard for new members to enter the market & add competition no? doesn’t seem like many new regulations are being enacted to gain market dominance, working with what exists is enough?
- pdonis 3y ago
  > existing regulations Which were put in place in response to other rich people lobbying the government for regulations that favored them and their companies. Perhaps there haven't been many recent ones put in place specifically in response to lobbying by private equity companies (though I'm not sure that's true). But that doesn't change the main point.
cyberax 3y ago
In free market it's also OK to cut costs as much as possible, making chair that explode and kill the user one day after the warranty expires. That's why we have regulation: to establish the minimum standards. Simple medical devices like wheelchairs (Class I or Class II) are also not super over-regulated, you don't need to do clinical trials to certify them. All-in-all it'll cost you around $10m, which is not at all a moat.
- bravo22 3y ago
  Liability still exists in a free market. Regulations are government's way of giving you immunity from liability laws, or not enacting them, in exchange for doing things a very specific ways. This creates moates.
  - eropple 3y ago
    > Liability still exists in a free market Only if a wronged party has the resources (time, money, political capital) to pursue it. Which is but one reason why it is deeply silly to rely on it to make a society go.
    - pdonis 3y ago
      > Only if a wronged party has the resources (time, money, political capital) to pursue it. In a free market, if there is a market need for more efficient achievement of redress for wronged parties, the market will produce it. > Which is but one reason why it is deeply silly to rely on it to make a society go. But of course relying on governments to achieve redress for wronged parties works just great. Not.
      - AlexandrB 3y ago
        > In a free market, if there is a market need for more efficient achievement of redress for wronged parties, the market will produce it. In our current market, many companies have worked around redress of wronged parties by mandating arbitration in various contracts.
throwaway48476 3y ago
The problem is that the people with money have no incentive go innovate, they already have money. The people without money have reason to innovate but no means to do so. So everything stagnated.

by pdonis 3y ago

kazinator 3y ago

Capitalism refers to the system of individuals pooling money together (capital) to start a venture that they couldn't if they acted separately. The idea of a company being a person-like legal entity with its own assets and liabilities is capitalistic. In a free marked that is absent of regulatory hurdles, it is far from guaranteed that costs would be affordable. Freedom from regulation about how wheelchairs have to be constructed would go hand-in-hand with freedom from regulation against monopolistic practices!!! In a completely free market, devoid of regulation, wheelchair makers can get together and fix prices. Or buy each other.

JumpCrisscross 3y ago
> idea of a company being a person-like legal entity with its own assets and liabilities is capitalistic It independently evolved in Rome and India to provide legal personhood to cities, guilds, public works and later, in the former, the Catholic Church.
pdonis 3y ago
> Capitalism refers to the system of individuals pooling money together (capital) to start a venture that they couldn't if they acted separately. That's one aspect of capitalism, yes. But in capitalism as it is currently practiced, most of the people who are accumulating capital aren't people that are trying to start new ventures. They are people that are already rich but think they aren't rich enough, who are unable to start new ventures themselves because they have no actual skills at providing valuable products or services, so instead they find some existing venture and siphon off all its wealth. (This pattern is not new, btw; it's the same way the "robber barons" in the late 19th century operated.) > In a free marked that is absent of regulatory hurdles, it is far from guaranteed that costs would be affordable. Nothing is ever "guaranteed". But the article under discussion makes it obvious that with regulations in place, not only are costs not affordable, but even the very existence of products meeting customer needs is not happening. A free market couldn't possibly do any worse. > In a completely free market, devoid of regulation, wheelchair makers can get together and fix prices. Or buy each other. This would only happen if it were economically more efficient for wheelchairs to be made by a monopoly. I strongly doubt that is the case. It's not the case for the vast majority of products and services. If it's not economically efficient, the monopoly (or price-fixing cartel) will simply be out-competed in a free market, because it will have no way of keeping other companies from producing at a lower cost. Historically, virtually all monopolies have been the result of government interference. (The original meaning of the word "monopoly" was a royal grant of the exclusive privilege to sell a particular product or service.) Most large corporations today are not the size they are because that is the most economically efficient way to deliver their products or services, but because it's the best way to buy government favors.
- wesselbindt 3y ago
  > Historically, virtually all monopolies have been the result of government interference I'm with you on this. In general, the state (by definition) functions to protect the interests of the politically dominant class, which, under capitalism, is the owning class. From the haymarket massacre to Biden's strike breaking shenanigans, this is absolutely beyond dispute. The state will always facilitate monopolies. The only way to get rid of monopolies is for the workers to organize and overthrow the dictatorship of the owning class. Until that happens, it's all Disney, Amazon, and pseudo democracy.

ausbah 3y ago

private equity is just exploiting existing regulations that already make it hard for new members to enter the market & add competition no? doesn’t seem like many new regulations are being enacted to gain market dominance, working with what exists is enough?

pdonis 3y ago
> existing regulations Which were put in place in response to other rich people lobbying the government for regulations that favored them and their companies. Perhaps there haven't been many recent ones put in place specifically in response to lobbying by private equity companies (though I'm not sure that's true). But that doesn't change the main point.

cyberax 3y ago

In free market it's also OK to cut costs as much as possible, making chair that explode and kill the user one day after the warranty expires. That's why we have regulation: to establish the minimum standards. Simple medical devices like wheelchairs (Class I or Class II) are also not super over-regulated, you don't need to do clinical trials to certify them. All-in-all it'll cost you around $10m, which is not at all a moat.

bravo22 3y ago
Liability still exists in a free market. Regulations are government's way of giving you immunity from liability laws, or not enacting them, in exchange for doing things a very specific ways. This creates moates.
- eropple 3y ago
  > Liability still exists in a free market Only if a wronged party has the resources (time, money, political capital) to pursue it. Which is but one reason why it is deeply silly to rely on it to make a society go.
  - pdonis 3y ago
    > Only if a wronged party has the resources (time, money, political capital) to pursue it. In a free market, if there is a market need for more efficient achievement of redress for wronged parties, the market will produce it. > Which is but one reason why it is deeply silly to rely on it to make a society go. But of course relying on governments to achieve redress for wronged parties works just great. Not.
    - AlexandrB 3y ago
      > In a free market, if there is a market need for more efficient achievement of redress for wronged parties, the market will produce it. In our current market, many companies have worked around redress of wronged parties by mandating arbitration in various contracts.

throwaway48476 3y ago

The problem is that the people with money have no incentive go innovate, they already have money. The people without money have reason to innovate but no means to do so. So everything stagnated.