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PEELING BACK THE LAYERS – CNT’D

Extrapolations

Yet another common complaint against evil, evil corporations is the example of (insert your favorite first name here) where this person was cheated by (insert name of your most despised evil corporation here) for (insert an outrageous amount of money here) and therefore all corporations are evil and must be controlled or limited by the state.

In other words, many people get the impression that the sole reason for corporations to exist is to scam people. They get this impression from the media, which, conveniently enough for them, report only the news and not the non-news.

We would like to know for every person scammed by a corporation, how many other people were not scammed by a decent, hardworking one. Alas, we will never know this because this is not news.

Most corporations exist to make money and they do their best to do so, but they do it by serving you. If a government is present, there are other ways to make money that do not involve serving you. If the government is not present, then the only way to make money is to serve you.

Consider this. Even in today’s managed and manipulated market, most corporations that are not tightly controlled by the government serve you well. When was the last time a supermarket tried to scam you? Or the phone company. Or the natural gas company? Or the electric company? Or the pharmacist?

All large corporations are usually fair players, however, this does not mean they won’t try to extract as much profit as possible. Of course they will! However, in general terms, they won’t deceive you. There is a gigantic difference between hard bargaining and a scam.

The “usual suspects”

We all have our list of professions or skills where a large number of deceptive practices take place. For example, used car salesman, small home contractors, dentists, mechanics, and so forth depending of the country. This is not to say that the entire profession is a gigantic scam, far from it. There are plenty of good and decent people within those professions that are making a living honestly. But, for some reason, it would seem that consumer complaints peak in certain professions; even taking into account all the “consumer protection” governments can give you. This fact can only be interpreted as follows: the government is failing miserably. The so-called “protection” is in and by itself a scam. It is a feel-good do-nothing regulation or lack of thereof. In other words, you are not protected. And if this is indeed the case, why should it be otherwise in a government-free market? Worst case scenario, nothing will change. But we don’t believe this that will be the case.

In a government-free market, economies blossom. Within this environment, people seek to make money by serving other people. Part of these services will be ranking services. Through these services people will become much more aware of the scammers and honest merchants. This is far more prominent today with the advent of the internet.

This is not political science fiction. Think of ultra-sophisticated cities, such as New York or Tokyo. They have all kinds of services that are unheard of in other places. Why? Because all traditional goods and services merchants are already in fierce competition. Hence, the best way to make money is to diversify into new and un-tapped market areas.

THE NEGATIVES

Problems

Anybody selling you the free market as a Nirvana post leading to Walhalla road on its way to Paradise is, obviously, selling you a dream. Probably not even a dream but an overblown exaggeration of a wild Lysergic acid induced hallucination (in full Technicolor). In other words, bollocks!

The free market is not the solution but simply a better approximation to a good system. We are so far removed from a solution that we don’t even know what a solution looks like. Even worse! We don’t even know if a solution exists. Perhaps the only possible solution is to evolve as human beings past physicality and become pure consciousness beings with no physical needs of any kind. That would probably be the only way to pass beyond the point of scarceness and hence economics. We leave this point to science-fiction writers.

The point we are trying to make so un-diplomatically, is that the free market has its own problems. One such point is that as there are no centralized authorities. It is possible for a corporation to become massive to the point that no other corporation can compete against it and there is no way to break it. It is possible that some cartels may defy history and remain stable for a long time. It is possible that natural monopolies may become abusive. And many, many more. All these things are possible, yet unlikely.

Timing

Another negative element that needs to be fully understood is that the free market is a self-correcting mechanism, but this mechanism is not instantaneous. There is a delay between a free market inconsistency (such as the inception of a cartel) and its correction (such as the collapse of the cartel). During this period, consumers may be negatively affected. This delay may be very short (i.e. days) up to very large (i.e. years). In those scenarios a consumer has two choices, either the consumer moves geographically to a location where this problem does not exist or, if price-wise competitive, ship-in the affected good or service. For example, there may be a tuna can brand monopoly in a town because the canning company dumps tuna cans in the local market at below-cost prices. In such event and if one desires a different brand of tuna, one could move to a different town or get the preferred brand shipped-in if S&H (shipping and handling) costs are acceptable. However, if either option is too costly, one is stuck with one brand only. The situation is not that bad because one can still purchase tuna at reduced prices, but the number of choices has been drastically reduced.

Statists

All these issues and more will be used by statists (i.e. pro-government people) to “demonstrate” that the free-market is flawed. Let us spare you the time and acknowledge right here right now that the free market is indeed flawed. Anybody claiming otherwise is a liar.

However, having said that, the question that needs to be asked to statists is the following:

Do you have a better system and does it work in reality?

We mean, don’t give us the same “we will fix it” that we have been hearing since the first regulations were imposed after the industrial revolution almost over 200 years now. Show us a system that is at least as old as the free market and that works as well as the free market, and we will gladly consider it. Otherwise, if you are here just pointing out free market flaws, we will simply ignore you. We are interested in concrete solutions that work in real life and not in academic debates from people with hidden agendas and vested interests. Sorry, but we chose not to play by your rules, actually, we chose not to play your game. At all!

Note: please see the Glossary if you are unfamiliar with certain words.

Continue to Evil corporations and consumer protection - Part 3

 

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