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It seems as though the author has a problem with capitalism and free markets in general. Yes, let's abolish capitalism, allow some central bureau to fix prices

It seems as though the author has a problem with capitalism and free markets in general. Yes, let's abolish capitalism, allow some central bureau to fix prices and use its power of violence over actors who don't comply. Oh wait... it was attempted 90 years ago and it didn't work out.

mercurial 12y ago
Are markets where one player enjoys a monopoly "free"? > Oh wait... it was tried 90 years ago and it didn't work out. Whether the current system is working is up for debate.
- VexXtreme 12y ago
  If a monopoly spontaneously emerges out of a free market, whereby no violence or coercion was used against other participants, then that business was simply better and more efficient at giving the market what it wants. It also doubles as a price signal to others that something in their way of doing business is inefficient and wasteful (or just not as efficient as the most efficient participant). I don't have a problem with such "monopolies", because they aren't real monopolies. As long as the market is still open to new participants, then it's not really an issue. For example, if a monopolist starts raising prices and hoarding supplies in order to artificially elevate prices, then new participants can enter the market and make money off the delta between the new prices and the old prices that made sense to the market.
  - ende 12y ago
    You touch on something important. Beyond the fact that the term monopoly gets thrown at a company without any further qualification of such a statement, there's no real thought put into how the company is using said alleged monopoly power to raise prices on consumers or create barriers to entry in the market. Amazon's prices trend downward, constantly. Amazon is also itself a market facilitator, agnostic to which products sell, so long as they sell. High quality and low prices race to the top of customer ratings. Third parties sell on Amazon as well, providing a global market for local brick and mortar shops. Further, Amazon is by far not the only website selling things on the internet. The internet is pretty great at lowering barriers to entry.
equoid 12y ago
Not picking on you in particular you are just an example of an attitude which assumes that we either have complete freedom for businesses to do as they wish or (gasp!) "communism" with state control. The "law of the excluded middle" springs to mind. There are plenty of examples of state regulation in the greater interest, pharmaceuticals being an obvious example, road safety another. It is not in the greater interest of society to allow businesses to trample over each other or to do as they wish. Amazon is acting to the detriment of a large number of industries and ultimately to people in general by stifling competition and by being monopolistic and abusive.
rtpg 12y ago
If a single player can move the market, then it's not a free market. You can throw out all the theories about economic efficiency when we reach that point.
- VexXtreme 12y ago
  See my reply to the poster below you.
dasil003 12y ago
Just because Marx failed to provide a solution doesn't mean he was wrong about the problem. The underpaid workers at Amazon are just a symptom of the extreme consolidation of wealth that is slowly but steadily undermining the entire basis of the type of prosperous rising-tide-lifts-all-boats capitalism that was the foundation of America's 20th century growth. We're facing real problems in the near future that neither Capitalism nor Communism has the answer to.
- VexXtreme 12y ago
  The workers are paid what the market is willing to pay them. If there is an inefficiency/mispricing and someone can get better compensation elsewhere (for the same skill set, presumably), then it makes sense for them to arbitrage that gap and change employers. If enough people leave Amazon, then Amazon will have to start paying people better, and ultimately, the gap will close.
- InclinedPlane 12y ago
  This is a very "communist" answer, because it pretends as though wealth and value are static, inherent things, rather than dynamic products of human activity. A parody of communist thought would be to say that they believe that wealth comes out of a factory (the "means of production"), and it's just a matter of manning the stations and throwing the "on" switch to get wealth coming out, from there it's mostly a matter of who gets what. This is a fantasy, and a dangerous one at that. Because of this stilted viewpoint, "communists" tend to imagine that the only way for the wealth of a "worker" to increase is to take that wealth from elsewhere. The reality is that wealth creation is an incredibly complex and dynamic dance between many disparate individuals and systems, and it is not fixed. There's tons more I could say on that subject but let me skip ahead to what I think the problem is in the US today in regards to worker wages. I don't think it's a problem of some inherent evil in the free market. Rather I think it's a symptom of excess regulation and taxation (and other costs) and a poor educational system, among other factors. The cost and complexity of living these days is much higher than it used to be. There are so many bills, so many taxes, and so on. The bar for a "reasonable" living is much higher these days, and much harder to obtain, with more pressures from every direction on savings and discretionary income. More so, the increasing costs combined with increasing necessity of higher education has put a lot of young workers in a financial pinch, as did the latest housing crisis. People aren't getting the skills they need to build strong careers and to have greater negotiating power. People are being discouraged away from trade schools and funneled into liberal arts colleges. People are being saddled with huge debts in exchange for skills that don't go far in the marketplace, they're discouraged or prevented from saving, they're discouraged from creating their own work (unless they're in software, which is the rare exception) by starting their own companies. All of those things were on the table for previous generations. Without them we've ended up with a generation of workers who are desperate to find and keep a job, who must rely on working for a big corporation because they need that surety of a paycheck to pay their high costs of living and their debts. We like to imagine that all these regulations and taxes have no negative consequences because they were created with the best of intentions, though that's not the case. But every element there is amenable to improvement, without resorting to marxist wealth redistribtion. I would posit that the consolidation of wealth we have been seeing is not the cause of the problem but rather the symptom of a larger underlying problem.

mercurial 12y ago

Are markets where one player enjoys a monopoly "free"? > Oh wait... it was tried 90 years ago and it didn't work out. Whether the current system is working is up for debate.

VexXtreme 12y ago
If a monopoly spontaneously emerges out of a free market, whereby no violence or coercion was used against other participants, then that business was simply better and more efficient at giving the market what it wants. It also doubles as a price signal to others that something in their way of doing business is inefficient and wasteful (or just not as efficient as the most efficient participant). I don't have a problem with such "monopolies", because they aren't real monopolies. As long as the market is still open to new participants, then it's not really an issue. For example, if a monopolist starts raising prices and hoarding supplies in order to artificially elevate prices, then new participants can enter the market and make money off the delta between the new prices and the old prices that made sense to the market.
- ende 12y ago
  You touch on something important. Beyond the fact that the term monopoly gets thrown at a company without any further qualification of such a statement, there's no real thought put into how the company is using said alleged monopoly power to raise prices on consumers or create barriers to entry in the market. Amazon's prices trend downward, constantly. Amazon is also itself a market facilitator, agnostic to which products sell, so long as they sell. High quality and low prices race to the top of customer ratings. Third parties sell on Amazon as well, providing a global market for local brick and mortar shops. Further, Amazon is by far not the only website selling things on the internet. The internet is pretty great at lowering barriers to entry.

equoid 12y ago

Not picking on you in particular you are just an example of an attitude which assumes that we either have complete freedom for businesses to do as they wish or (gasp!) "communism" with state control. The "law of the excluded middle" springs to mind. There are plenty of examples of state regulation in the greater interest, pharmaceuticals being an obvious example, road safety another. It is not in the greater interest of society to allow businesses to trample over each other or to do as they wish. Amazon is acting to the detriment of a large number of industries and ultimately to people in general by stifling competition and by being monopolistic and abusive.

rtpg 12y ago

If a single player can move the market, then it's not a free market. You can throw out all the theories about economic efficiency when we reach that point.

VexXtreme 12y ago
See my reply to the poster below you.

dasil003 12y ago

Just because Marx failed to provide a solution doesn't mean he was wrong about the problem. The underpaid workers at Amazon are just a symptom of the extreme consolidation of wealth that is slowly but steadily undermining the entire basis of the type of prosperous rising-tide-lifts-all-boats capitalism that was the foundation of America's 20th century growth. We're facing real problems in the near future that neither Capitalism nor Communism has the answer to.

VexXtreme 12y ago
The workers are paid what the market is willing to pay them. If there is an inefficiency/mispricing and someone can get better compensation elsewhere (for the same skill set, presumably), then it makes sense for them to arbitrage that gap and change employers. If enough people leave Amazon, then Amazon will have to start paying people better, and ultimately, the gap will close.
InclinedPlane 12y ago
This is a very "communist" answer, because it pretends as though wealth and value are static, inherent things, rather than dynamic products of human activity. A parody of communist thought would be to say that they believe that wealth comes out of a factory (the "means of production"), and it's just a matter of manning the stations and throwing the "on" switch to get wealth coming out, from there it's mostly a matter of who gets what. This is a fantasy, and a dangerous one at that. Because of this stilted viewpoint, "communists" tend to imagine that the only way for the wealth of a "worker" to increase is to take that wealth from elsewhere. The reality is that wealth creation is an incredibly complex and dynamic dance between many disparate individuals and systems, and it is not fixed. There's tons more I could say on that subject but let me skip ahead to what I think the problem is in the US today in regards to worker wages. I don't think it's a problem of some inherent evil in the free market. Rather I think it's a symptom of excess regulation and taxation (and other costs) and a poor educational system, among other factors. The cost and complexity of living these days is much higher than it used to be. There are so many bills, so many taxes, and so on. The bar for a "reasonable" living is much higher these days, and much harder to obtain, with more pressures from every direction on savings and discretionary income. More so, the increasing costs combined with increasing necessity of higher education has put a lot of young workers in a financial pinch, as did the latest housing crisis. People aren't getting the skills they need to build strong careers and to have greater negotiating power. People are being discouraged away from trade schools and funneled into liberal arts colleges. People are being saddled with huge debts in exchange for skills that don't go far in the marketplace, they're discouraged or prevented from saving, they're discouraged from creating their own work (unless they're in software, which is the rare exception) by starting their own companies. All of those things were on the table for previous generations. Without them we've ended up with a generation of workers who are desperate to find and keep a job, who must rely on working for a big corporation because they need that surety of a paycheck to pay their high costs of living and their debts. We like to imagine that all these regulations and taxes have no negative consequences because they were created with the best of intentions, though that's not the case. But every element there is amenable to improvement, without resorting to marxist wealth redistribtion. I would posit that the consolidation of wealth we have been seeing is not the cause of the problem but rather the symptom of a larger underlying problem.