Sunday, June 12, 2011

Naivety and the Free Market

It seems like it's usually leftists who get called naive. But in some ways, many right-wing people strike me as much more naive.

Conservatives seem to fall into two groups - those who geniunely believe in the ideals they espouse, and those who only believe in lining their own pockets. The first group doesn't realize they're being used by the second group. They don't release they're helping the second group. And this is what I mean by naivety.

We haven't had free enterprise in 200 years. There are some very powerful comporations who crush any small businesses that threaten their profits.

Have you ever noticed how gas prices in every Canadian gas station are exactly the same? (I don't know the situation in US.) And how they go up before every long weekend? And how they go up when the oil supply is threatened, but don't go down when things improve?

Back in the 80s, gas stations charged all sorts of different prices, and many were 'Mom and Pop'  small gas organizations. Then the 'price wars' came. The big corporations agreed to drive the price of gas really, really low, low enough that the small gas organizations went bankrupt because they weren't making any profit. (The big corporations had enough money saved up, or other sources of income, that they could weather the loss.) Then, once they controlled the profit, they made a deal to all charge the exact same price so people would be forced to pay it. My Mom used to work at the Co-op gas station, and they'd check the prices on nearby gas bars to make sure they charged the same.

There are many ways that you can make a profit on a free market economy while screwing the public and the small businesses. You can get a monopoly - De Beers has a monopoly on diamonds, which is why they're so expensive. You can go into price wars to cut down on your competition. You can sell cheap junk so people have to replace it often - as long as everyone else sells cheap junk, you'll do fine. You can cut the forests down faster than they can grow, or fish the fish faster than they can breed (what do you think happened to our cod stocks?), because you can make a profit today and go into a different line of business ten years from now.

A free market economy can be a great thing. I see it in World of Warcraft, where you can find stuff for affordable prices on the Auction House, and sell stuff there and make some good coin fairly easily. But World of Warcraft isn't realistic. It doesn't cost you any in-game money to stand around mining ores. It's prohibitively difficult for others to stop you from mining ores. And if everyone's prices are too outrageous, many of your customers can go out and get the stuff themselves instead of buying it. Lastly, it's just a game, and no one lives or dies based on whether they turn a profit on that stack of copper ore.

In real life, a free market leaves us with no protection from exploitation, from having our futures undermined for today's profits, from being forced to pay through the nose for cheap crap that we need, from having good businesses go bankrupt through no fault of their own. That's why we need government controls on business - so we can keep the market as free as it can possibly be.


Blogger Lorraine said...

Ayn Rand tells us that the people most victimized by the altruistic value system are the people who actually believe in it, but that can be said of any value system, can't it?

6:52 PM  

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