From: Sam Norton (elizaphanian@kohath.wanadoo.co.uk)
Date: Tue Dec 14 2004 - 15:06:12 GMT
Hi Mark,
I hope you got my long post in this thread. But a quickie response to some points here:
> In reality, competition produces redundancy, not efficiency. I mean,
> do we really need 25 different brands of deodorant? One of the
> reason people are put off by advertising is that it is rarely about
> the quality of a product: it's about trying to persuade people to
> choose one of 25 functionally identical products. So, in car adds,
> we see cars climbing waterfalls and mountains and rainbows; we see
> cars full of young, happy, sexy, energetic people who's lives have
> finally been made perfect because they decided on a Chevy not a Ford.
> Is this really the highest quality use of the public airwaves?
I think the issue here is about who gets to decide what counts as 'the highest quality use of the
public airwaves'. If you believe in the decentralisation of decision making then you're not going to
want someone as a cultural arbiter of good taste. Also, there's the question of time: these small
choices add up over time to being large choices (deodorants today compared to 50 years ago) and
we're better off as a result.
> In reality, maximization of profits doesn't produce quality, it
> results in a race to the bottom: Why produce a high quality light
> bulb that will last for 50 years when it's more profitable to have
> them burn out in a month or two? Why make a printer that will run
> for years on a single supply of toner, when so much profit can be
> made selling lots of toner?
The argument would be: if we don't make the best product we can, then someone else will. So if it
becomes well-known that we make light bulbs that conk out in two months, whereas another company
makes light bulbs that last for fifty years, we will go out of business. Obviously there will be
lots of 'frictions' that might prevent that happening (lack of knowledge and comparison, barriers to
entry, oligopolistic behaviour etc) - but that's why there are people like the Monopolies and Merger
s Commission (Anti-Trust in the US).
BTW, I'd be interested to explore your take on what could be called 'transition costs'. That is, a
free-market argument might be that the market will 'clear' and various problems will resolve
themselves (redundant workers will retrain and get different jobs etc) but in the movement from one
economic state to another, there will be a price paid (some redundant workers won't be able to
retrain, or will have to retire early etc). The free-market argument doesn't put any 'price' on
these sorts of transition costs, which is, I think, a problem. (One example in the back of my mind
is the different way that the French and UK governments handled the collapse of coal-mining in the
1980's)
Sam
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