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Comments

Charles Hanson

Proponents of the free market model argue that it's the responsibility of consumers to regulate industry by choosing what's best. But as you've described, which I agree with, consumers are increasingly forced to choose between one evil or another while real innovation and competition are too often squashed by buyouts or plain theft of ideas.

One area of light I think is the construction industry. Almost everything is compatible by size and function. You buy your tools based on quality (or price), not because you already have the set of proprietary attachments and it'd be too expensive to "change systems." Every screw, bolt, bit, blade, and cord works with whatever you've got.

I wonder if a governing document, like a constitution, would work to regulate the practices of businesses across the board. Of course something like that would meet endless corporate opposition/influence/corruption in the Government. But that's another post I think.

John Dowdell

In that list, software development might be a relatively free market, but all the rest have been heavily regulated, under centralized control... and incumbents have much incentive to try to lobby that centralized power.

Forbidding multi-year agreements falls prey to the same weakness. Ideally, we'd want to lower the barriers to entry, reduce the political risk of a business commitment, so that more providers can reach a greater diversity of agreements with more potential customers.

Related: Wikipedia has a few entries on economic freedom worldwide, and this link summarizes a few indices:
http://en.wikipedia.org/wiki/Economic_Freedom_of_the_World#Economic_Freedom_of_the_World

jd

Michael Ramirez

We need less government control not more. Your bullet points prove that whenever government is involved things go bad. The US is not a completely free-market because we have government controlled monopolies.

Robert Ramirez

To blame all this problems on the free-market one would have to assume that we are in a free-market. But we are not in a free-market system and have not been for quit some time. As for you telephone and cable companies they are controlled by the FCC,so those are obviously not free-markets. The medical industry is controlled by the FDA, this is also not a free-market. And as for the Software Industry, that is controlled by the FCC and well as many stifling requlations and anti-trust laws. Maybe the only true free-market is eBay.

Mark Fuqua

Just an FYI, the two year contract was in response to the fact that American's don't save money and if they had to fork over the money for the actual cell phones...we'd still have payphones on every corner. They don't give you a free or greatly reduced phone in most other markets.

FWIW, the real lack of choice is where the government is in charge...USPS and public schools...great results there!

Mark Fuqua

Christian Cantrell

Robert:

I realize our economy isn't based on an entirely open and free market just as Americans are not entirely free individuals. Of course there are boundaries. But the market is free enough to allow anti-competitive behavior which tends to make it less free. Hence the paradox.

Christian Cantrell

Michael:

What do you think the economy and the market would look like if it was entirely unregulated? Do you claim the result would be better? Could be, but I see a lot of companies abusing the level of freedom they currently have. That's to be expected, of course -- all I ask is that consumers have the ability to vote with their wallets.

Christian Cantrell

Mark:

I realize that part of the multi-year contract required by carriers is to pay for a subsidized phone, however I also think that position is being abused. I believe that the penalty for canceling my AT&T account is $200. The price of a subsidized 3Gs phone is $300. The price of an unsubsidized 3Gs is $700. If you do the math (penalty + subsidized price), there's $200 left on the table -- or rather in AT&T's pocket. Of course AT&T has a right to make a profit. They have a right to make all the profit they can, in fact. But I do have a problem with companies making profits at the expense of consumer choice. Choice is ultimately the only thing that empowers consumers, and it should never be taken away.

I also find it interesting that whenever I talk about government regulation (which, I should mention, I am not uniformly in favor of), people mention things like the post office and public schools. I typically send and receive several packages a month related to my business, and the only problem I've ever encountered is a box of books that arrived wet during a hurricane (which the post office reimbursed me for). Are there really hundreds of thousands of people out there having miserable experiences with the post office, or is picking on the post office sort of like picking on Canada's healthcare system (which all the Canadians I know seem to like)?

And the public school I send both my children to is exceptional. In fact, I'm constantly amazed at the level of education my children are getting. That said, I know from firsthand experience that there is an unacceptable number of subpar (to put it mildly) public schools in this country. In fact, when I lived in San Francisco, I had to send both my kids to private schools. But clearly there are hundreds of examples of excellent public schools across the country which prove that public services can be done well -- just as there are hundreds of examples of private services done poorly.

Charles Hanson

Micheal:

The problem with a completely free market is A; businesses are not required to reveal their budgets and spending practices, and B; they are governed by profits instead of an obligation to the greater good.

Maybe I'm overly cynical, but I find it hard to assume an organization that only answers to the bottom line will look out for its customers in any meaningful way. At least not in any way that would endanger the margins.

And if you'd like a taste of where my distrust comes from, check out Part A of the BBC program "The Century of The Self." (58 min on Google Video) You'll see how the market used to be driven by rational decisions of product quality and cost. But in the 20s a man named Edward Bernays employed Freud's psychological theories to advertising and Public Relations (new name for propaganda) to convince the masses to buy what they FELT they wanted. Thus turning us into a nation of consumers, verses rational people who would typically govern the market by rational decisions.

http://en.wikipedia.org/wiki/Edward_Bernays

John Dowdell

"I see a lot of companies abusing the level of freedom they currently have."

True, and a better remedy than having corruptible politicians attempt to micro-manage them is to let more players compete, to remove artificial barriers to their entry in the market.

"Capitalism" is when an individual can save their capital, then bet on what they think will work better for more people. It's kinder and more effective than letting only "the best and the brightest" place the bets.

re "voting with their wallets": agreed. But many of the problems you cite are directly due to prior regulation artificially restricting public choices. For instance, San Francisco City Hall skims off some political power ("public access channels" for certain types of speech, eg) in return for granting local transmission monopolies:
http://www.bing.com/search?q=site%3Areason.com+cable+%22san+francisco%22

Ben

the free market will create as little freedom as it possibly can.

It is well understood that monopolies and oligopolies are bad for the economy in the long run. That's why most developed countries have anti-trust laws in place. These Laws and the execution of it might be not perfect but I do not really see a big issue here. In the case of mobile carriers you mention, I think customers understand the long contracts in order to get a understand the lenghty plans in order to pay less for a handset. At least in Europe there prepaid plans are very commonly used for people who do not want the newest handsets and want the freedom to cancel at once.

Just to broaden the context here: To my opinion what really demands attention is the 2 fundamental problems of markets which are:

- A generation problem: future generations have no voice.
- There's no price on public goods: e.g. air, water, ..

The first problem leads to a short sighted view in the actions of the participants - up to the perversity of acting just on quarterly result targets and bonuses derived from that. A good example of how this leads us to most dangerous developments is the consumption of non-renewable resources.

The second problem leads to destruction of our resources that do not officially belong to someone, are free by definition. In Microeconomics you learn that the scarcity determines the price of a good. Markets cannot do that for public goods because they are (yet) abundant, and they do not forsee their scarcity because of the generation problem.

Ben Rossi

(*warning, tangent*)

Ben brought up a really good point. I find it extremely interesting that very intelligent people will make blatantly short-sighted decisions when it comes to quarterly targets and bonuses.

Companies that produce products for sale, and who intend to continue to products for sale, shouldn't spend as much time worrying about 90 days out, and instead, focus part of their capital on the next iteration of the product they expect will result in sales.

I'm all for making sure your quarterly goals and spending are in check, and there is nothing wrong with trying to maximize sales and existing revenue channels -- however, if you don't plan on what you are going to sell next, your days are automatically numbered.

Furthermore, if you don't innovate, and your competitors do, your currently "captive", "solid" and "dependable" customers will prove to be the opposite.

Flash Lives

I pledge my loyalty to those who makes the best product, do not demand a contract, do not impose restrictive conditions upon access & usage, and don't limit the thrill of innovation developers enjoy.

It is a paradox that the free market fears openness, transparency, & freedom. I vote with my wallet, and am far more principled than years past. I spend that extra $ for an unlocked device. I avoid buying Apple products, despite the appreciation I have for their simplistic UI & responsive touch. It's just not worth it to me in the long-run to support locked-down systems, contracts, and too much control.

I pledge my loyalty to those who makes the best product, do not demand a contract, do not impose restrictive conditions upon access & usage, and don't limit the thrill of innovation developers enjoy.

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