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Re: Force

Posted: Thu Nov 01, 2012 2:58 pm
by johnson1010
The free market trends inexorably to monopolies and then rediculous abuse.

one competitor out-performing another is the basis of the free market, right?
Well, when one competitor vanquishes another and takes up their market share then they become more powerful. A market fued between mom-and-pop stores leads to little. But eventually one of those stores becomes walmart.

As one conquering business moves on to the next mom-and-pop it becomes easier and easier to dominate them. Fairness does't come into play here. This is just the momentum of accumulated plunder bowling smaller competitors under.

And of course there are those services which there is no alternative but to have. Choosing between 10 or a hundred different brands of peanut butter where you can pick and choose what price you will pay for what product is the free market, but it does not function for things like life-saving cancer treatments, fire departments, or military defense.

You either blow every cent you and your family has ever earned trying to survive cancer, plus go into ludicrous debt, or you die next week. that is no choice at all, and so is not a viable free market situation.

Re: Force

Posted: Thu Nov 01, 2012 5:23 pm
by Mr A
So you have something against Walmart for their low prices compared to momandpop stores? You would rather people pay higher for merchandise? Would you want the government to bar competition in regards to momandpop stores, stores that cannot compete with retailers that offer lower prices? Do you want the government to step in, bar Walmart from a given area, so that people can continue to pay higher prices?

In Rands view it would be immoral for the government to bar competion in the marketplace. If people have anything against WalMarts lower prices, then simply shop at momandpop stores and not at Walmart then.

Re: Force

Posted: Fri Nov 02, 2012 7:49 am
by President Camacho
Wal-Mart is a good example of the tipping point in which benefit comes with costs. I see this as a kind of tragedy of the commons.

If a company can provide a product or the sale of a particular product at a lower cost through economies of scale then it's usually a good. That's usually seen as irrefutable. The problem arises when that entity takes up too much of the market and is then able to dictate how much buyers and sellers receive - it's able to control both how much it pays for a particular product and how much it sells it for. That's power and that's a good indicator of how much control of a market an entity has.

Wal-Mart does this. They tell those who produce how much they'll sell their products for and then offer them to consumers at an elevated price. They have the power to do this because of how big they are. The bigger they are, the more power they have to do this.

An argument can be made that someone else will just offer sellers more money and then sell their items to consumers for a lower price. But to do so would mean having to compete against the already established behemoth which could incur enormous losses in order to drive out competition. It would be business suicide to compete against Wal-Mart. When any companies wishing to compete came on the scene, Wal-Mart could theoretically offer their items at near cost in order to drive out the competition in a certain area. They could do this, because of how much profit they make, without raising the prices in any of their other stores. Once the competition was choked out, Wal-Mart would again raise prices. They would be in control. The cost to enter such a market would be close to impossible.

Now, by driving mom and pops out of business, many locals who used to run their own business now are left to seek employment. They can go work for Wal-Mart for significantly less pay. Wal-Mart doesn't require them to think anymore. They don't need to balance their accounts, make sure the meat is cut and packed correctly, or anything associated with running a business. The butcher who used to run his own local shop and is now working for Wal-Mart only has to put the pre-cut/pre-packaged meat on the rack and take away those which have reached their expiration.

The butcher used to represent the middle class. He has been cut out - his wages decreased, his responsibility and thought squelched.

The reason I'm not more upset about all of that is that there is still opportunity out there and it is coming in the form of the internet. Businesses are now able to sell to nearly as large a market as Wal-Mart without having to use them to get their products out there! We'll see how free the internet will remain in the coming future. ;)

To think that entities which are 'too big to fail' are not dangerous is just irresponsible. To know why Wal-Mart has great potential to be an evil is to know why monopolies and tyrannies are not usually in a country's or a market's best interest.

Re: Force

Posted: Fri Nov 02, 2012 9:08 am
by johnson1010
Yes, Walmart not being in your community is a good thing.
Yes, paying more by not shopping at walmart is a good thing.

Have you really ever thought about the fact that you can buy a pair of shoes for 15 bucks? What are the implications there? If you learned how to make a shoe, how much would you want to be paid for the effort? How much is reasonable?

Assembly lines can drastically reduce the cost of doing business, but ultimately there are people out there who are putting in sweat and effort to produce these goods. In sweat shops actually.

I saw an interview on Oprah once where they were talking about nations and their comparative wealth and lifestyles. She had a woman on there from the United Arab Emerits who was explaining that everyone over there has money and they can get backrubs every day for super cheap and everything is good. But who’s giving these backrubs for pennies?

In other words, extreme wealth discrepancies come at the expense of the people who are actually doing the work. The president of Nike doesn’t make shoes. He runs a hierarchy. And each day he makes more than two of his workers will make in a year. That’s exploitation, pure and simple.

When you buy a set of shoes at walmart you are part of that exploitation. Someone over seas is working incredibly hard, in terrible working conditions, at terrible hours, with ass-all for pay to get you that pair of 15 dollar, disposable, low-quality shoes.

It definitely would be better if there were a local cobbler who made you a pair of shoes. They would probably cost quite a bit more than 15 dollars, but I don’t think they would be too much more expensive than a pair of expensive jordans. Then there would be a place to get your shoes repaired and maintained, rather than just throwing them away after a while. That puts money directly into the community to a business owner who lives there, buys there, hires there, pays taxes, cares for his community, and builds a more locally robust economy.

It reduces fuel expenditure, waste products, garbage, raises the income of local workers who can learn a trade and produce a product which could sustain them no matter where they live.

Giving money to walmart puts dollars in the hands of a conveyor belt which continually siphons money out of a community and deposits it in a corporate HQ in the Cayman islands (for tax avoidance purposes). Employee’s are treated like shopping carts. Necessary, but expendable. Certainly not worth investing in, and not worth the trouble to maintain. Just get new ones. That’s why they are paid very little, have very little prospect for opportunity and growth, terrible benefits, and no retirement plans to speak of. Goods are shipped in from distant locations manufactured by border-line slave labor sweat shops, heavily polluting factories, over-packaged in precious crude oil product, saturated with preservative chemicals, toxic paints, shipped thousands of miles just to be thrown away after a short life of gaudy excess.

The united states is living in a dream right now. We have tremendous wealth because we have tremendous power. That means we pay little for what others have sacrificed much to obtain. It isn’t sustainable. It isn’t fair. It isn’t going to last. Walmart and other big-box stores are generally the facilitators of our exploitation. We use a quarter of the world’s resources. That couldn’t last, even if everyone else thought we were right to do so.

Walmart is exactly what happens with un-regulated free markets. It’s built into the system. Walmart IS how the system works. Global communication and travel have made these inevitabilities all the more precipitous.

Re: Force

Posted: Fri Nov 02, 2012 10:49 pm
by Mr A
johnson1010 wrote: Yes, paying more by not shopping at walmart is a good thing.
And this is precisely the choice people have - shop there, or not.

The point is, that government should not ban any competition in the market, period. Whether their prices are at, above or below market values, whether or not they provide jobs that pay at, above, or market values, whether or not they offer benefits, or retirement, or vacations. If people have a problem with any of this - don't buy their mechandise, don't work for them.

Ayn Rand:
There is no way to legislate competition; there are no standards by which one could define who should compete with whom, how many competitors should exist in any given field, what should be their relative strength or their so-called “relevant markets,” what prices they should charge, what methods of competition are “fair” or “unfair.” None of these can be answered, because these precisely are the questions that can be answered only by the mechanism of a free market.
Her government is only concerned with recognizing, upholding, and protecting man's rights, that's it. Man has a right to sell at whatever price he wants to sell products at, and to set the wage/salary to whatever amount he wants to. And man has a right not to buy products at whatever price that they are being sold for, and man has a right not to work a job that he think pays too little. In her system, no one has a right to get the government to force competitors out of a market or into a market, to get a business to set a minimum wage amount or to cap pay, etc. as it's a violation of their individual rights, which that principle is paramount.

Re: Force

Posted: Sat Nov 03, 2012 3:27 am
by Robert Tulip
johnson1010 wrote:Yes, Walmart not being in your community is a good thing. Yes, paying more by not shopping at walmart is a good thing. Have you really ever thought about the fact that you can buy a pair of shoes for 15 bucks? What are the implications there? If you learned how to make a shoe, how much would you want to be paid for the effort? How much is reasonable? Assembly lines can drastically reduce the cost of doing business, but ultimately there are people out there who are putting in sweat and effort to produce these goods. In sweat shops actually.
Johnson, turning the tables on your comment, have you really ever thought about the fact that the global median income is about $3 a day?

Thats right. Half the people living on our planet exist on less than $3 per day, although in purchasing power parity terms $3 buys a lot more in poor countries than it does in the rich world. But still, in the USA ten times that amount is still very poor.

So, you have to think about the consequences of your moral call to ban sweat shops. The alternative for poor people in China and wherever is to go back to subsistence agriculture, working as a peasant on a tiny plot, dependent on the rain to avoid starvation, tied to the soil with no hope of change.

For people in such circumstances, factory employment to provide your $15 shoes is an improvement on their real alternative. As well, industrial production builds their skills and wealth, giving them the potential to educate their children so they can be as productive as rich people, and eventually as wealthy.

You call for protection of high cost US producers, such as cobblers. The moral result of such protection is that you are saying to someone in China, even though you are willing to provide the same product for much lower cost, you are banned from doing so because of geography. That is not just.

The challenge for the US to retain its wealth is to invest in human capital, so that people can still be just as wealthy within a free market. If people don't want to work at Walmart, they can get an education which will enable them to find a better job.

When cars replaced horses and when other technological improvements came along, some people lost out in the disruption of change. Supermarkets are a far more efficient retail system than many traditional markets. In Asia, there is a supermarket revolution because people appreciate the convenience, safety, standards, quality, value, freshness and range. It makes things tough for traditional market sellers, but it produces overall economic growth which means people can adapt and find new lines of employment at a higher level. It is just this sort of change that has driven rich countries towards a focus on high value services rather than low value production, for which other countries now have a comparative advantage. Economics by romance is not rational.

Re: Force

Posted: Sat Nov 03, 2012 4:06 am
by Kevin
Robert Tulip wrote:So, you have to think about the consequences of your moral call to ban sweat shops.
Has he actually argued that they should be banned? I haven't read the entire thread, maybe he has... but what I've seen is an argument that you shouldn't shop at WalMart not that you shouldn't have the option of shopping at WalMart.
The alternative for poor people in China and wherever is to go back to subsistence agriculture, working as a peasant on a tiny plot, dependent on the rain to avoid starvation, tied to the soil with no hope of change.
Really? That's it - WalMart on the one hand and perpetually rolling in the dirt on the other? I think there's at least a third option, and one that is a reasonable one - highly regulated markets. After all, who doesn't want regulation? Does Big Pharma, say, argue that patent protection should be done away with? Maybe so, but I doubt it. Regulation brings more freedom than does handing the keys over to WalMart, Monsanto and so on...
For people in such circumstances, factory employment to provide your $15 shoes is an improvement on their real alternative. As well, industrial production builds their skills and wealth, giving them the potential to educate their children so they can be as productive as rich people, and eventually as wealthy.
My perception is that over the last 40 years or so the middle class in the the US, UK and western europe has tended to drift more to the lower rather than the higher class... which if true makes your above statement seem far too optimistic. There will always be peasants to exploit... and today's cheap labor will be tomorrow's victims of cheap labor if they're even that lucky.
You call for protection of high cost US producers, such as cobblers. The moral result of such protection is that you are saying to someone in China, even though you are willing to provide the same product for much lower cost, you are banned from doing so because of geography. That is not just.
No, what I am saying (nopt speaking for Johnson) is that it is being said to WalMart et al... and again with the banned... there doesn't have to be a ban when a fee will do.

Re: Force

Posted: Sat Nov 03, 2012 4:41 am
by etudiant
Robert Tulip wrote:


The challenge for the US to retain its wealth is to invest in human capital, so that people can still be just as wealthy within a free market. If people don't want to work at Walmart, they can get an education which will enable them to find a better job.

When cars replaced horses and when other technological improvements came along, some people lost out in the disruption of change. Supermarkets are a far more efficient retail system than many traditional markets. In Asia, there is a supermarket revolution because people appreciate the convenience, safety, standards, quality, value, freshness and range. It makes things tough for traditional market sellers, but it produces overall economic growth which means people can adapt and find new lines of employment at a higher level. It is just this sort of change that has driven rich countries towards a focus on high value services rather than low value production, for which other countries now have a comparative advantage. Economics by romance is not rational.
A question Robert: When developing countries have the capability, and the educated work forces, to design software, build spacecraft, high speed trains, and all the other items previously limited to western countries, what sort of investments and education will provide us continuing wealth? Under an globalized free market, why provide any new technology or service at western prices when it could be done for so much less in China, India, or others in similar states of authoritarian government or urgent demographic need?

Re: Force

Posted: Sat Nov 03, 2012 5:54 am
by Robert Tulip
etudiant wrote:A question Robert: When developing countries have the capability, and the educated work forces, to design software, build spacecraft, high speed trains, and all the other items previously limited to western countries, what sort of investments and education will provide us continuing wealth? Under an globalized free market, why provide any new technology or service at western prices when it could be done for so much less in China, India, or others in similar states of authoritarian government or urgent demographic need?
If poor countries achieve the level of productivity of the rich world, then the level of abundance in rich countries will be even greater due to trade. My opinion is that our planet has resources to enable wealth for all, and that growth in one country enables trade, and is good for growth in other countries.

As an example in response to your suggestion that the rich world might lose out from growing wealth in the poor world, at the moment, mining companies working in poor countries choose to bring in high level experts from rich countries. If they could source the same level of expertise locally, they would, as they are driven by profit. In a just economy, income reflects productivity. If shareholders assess that a CEO has delivered exceptional leadership, then that CEO deserves exceptional pay. It is not for outsiders to judge pay scales, since the shareholders set remuneration with a view to maximising profit.

There will always be opportunities for people of talent and drive. Any population that thinks it can bludge is headed for poverty.

Australia has a long list of occupations available for skilled immigrants. If there were too many Australians with skills and qualifications in these fields, they would not be open to foreigners.

I don't think that authoritarian government is capable of achieving prosperity. China is something of an exception, but they are reaching a tipping point where the population will demand democratic processes. Wealth brings demand for accountability.

My view is that new technology will enable abundant low cost energy, and new occupations will emerge to tap growing global wealth.

Re: Force

Posted: Sat Nov 03, 2012 6:37 am
by Robert Tulip
Kevin wrote:
Robert Tulip wrote:So, you have to think about the consequences of your moral call to ban sweat shops.
Has he actually argued that they should be banned?
That was an inference I drew from Johnson's post, that the moral evil of Nike-style inequality should not be allowed, and a new crusade is needed like the abolition of slavery.
WalMart on the one hand and perpetually rolling in the dirt on the other? I think there's at least a third option, and one that is a reasonable one - highly regulated markets.
Property rights can only be protected through regulation, or by a return to Dark Ages methods of anarchy constrained by local force. The big question in Atlas Shrugged is the risk of pernicious regulation with collusion between populist governments and cartels. If a government regulates to force a private firm to trade with one supplier or customer and not with another, without any objective basis of demonstrable harm from allowing free trade, it opens the door to injustice.

Your call for 'highly regulated markets' is something I agree with regarding harmful products, or areas of genuine need for restriction such as protection of biodiversity, but apart from those type of areas firms should be free to trade on a level playing field based on their own commercial interests. Once governments start to distort markets they are on the path of rent-seeking, socialism, stagnation and corruption.
My perception is that over the last 40 years or so the middle class in the the US, UK and western europe has tended to drift more to the lower rather than the higher class.
And is that perceived hollowing out of the middle class due to too much objectivism or not enough? I suspect the latter. If we encouraged competition, we would provide incentive for growth, with resulting demand for more goods and services, through a middle class able to supply them.

In fact, the income and wealth of all quintiles has grown. Perceptions of middle class decline are not supported by census statistics in the USA. Since 1967, the median household income in the United States has risen by 31%
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today's cheap labor will be tomorrow's victims of cheap labor if they're even that lucky.
What a dismal view you have Kevin! There is a common tendency to generalise from hard luck stories, ignoring the statistics that show things are generally improving. If tomorrow people are unwilling to work for low wages, it will only be because their skills and productivity have risen so they can obtain something better. Hardly victims.
there doesn't have to be a ban when a fee will do.
So you propose a tariff barrier to trade like the current unjust arrangements that support the US bloated farm lobby. That sort of protectionism is a beggar thy neighbour policy that has the same effect as a ban, and that actually does harm to the buyer by denying them the right to obtain goods from the most efficient producer.