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Redefining "free markets" (update)
Posted by: McQ on Tuesday, August 14, 2007

Says Ezra Klein:
SOMEONE CALL DEAN BAKER! Over at DailyKos, Hunter catches CNBC anchor Erin Burnett saying, "you know, if China were to revalue its currency, or China is to start making, say, toys that don't have lead in them, or food that isn't poisonous, their costs of production are going to go up. And that means prices at Wal-Mart, here in the United States, are going to go up too."

I'm genuinely speechless. Are there any abuses these market-boosters won't countenance in the name of lower prices and quicker growth? I mean, a week ago, I would've thought saying "yeah, well Wal-Mart's toys could be cheaper if they were made of lead and their food would cost less if it was laced with poison" would have been a sarcastic smear against the nuanced opinions of free marketeers. I would have been, uh, wrong.
Burnett's statement certainly seems to be more of a sarcastic criticism of some Chinese suppliers, than a serious statement. But even if it is exactly what Klein claims, it is a real stretch to call anyone a 'market-booster' or a "free marketeer" who would countenance poisoning their customer base for a quick buck.

Seems a bit self-defeating don't you think?

Certainly I wouldn't put it past some amoral supplier to do something like that (and obviously, given the recalls out of China, some certainly have), but he or she certainly couldn't be considered a "market-booster" or 'free marketeer' for doing so. In fact, to most, especially if these things were done intentionally, he or she is simply a criminal.

The fact that the products aren't anymore acceptable to the manufacturer/supplier (see recalls by Mattel and others) argues against the Klein broad brush. But it is a typical criticism by those who prefer, politically, to improperly characterize the 'free market' as nihilistic "anything goes, buyer beware" sort of arrangement in which the hapless consumer is everyone's patsy and has no recourse.

Free markets certainly are going to have players who act unethically and do precisely what the suppliers and manufacturers in China have done recently. The market is not immune to that. It never has been, nor has anyone ever claimed that. But as any observer of the market can tell you, it has a very rapid method of dealing with that, especially now that we have such instant communication.

Mess with your customer base in an unethical manner and have that word get out (and it will) and it can be the death penalty for your company. We've seen it on local, regional and national levels. And it can (and does) happen on the global level as well.

So to pretend that "keeping prices down" is the prime amoral principle by which "free marketeers" are driven and that principle excuses any excess or harm done is simply disingenuous. It requires one to believe that capitalism is an amoral economic system driven by greed vs. a economic, political and social system which indeed does have a morality, one which doesn't countenance force or fraud in the market and moves to counter it fairly rapidly (substitution, competition, information, communication, etc).

This is just more of the dangerous economic populism we see being espoused by the left and their Democratic presidential candidates. You can readily guess what they consider to be the best solution to this "free market" stuff.

They've lately been trying to pick a trade fight with China (and, unfortunately, some of China's manufacturers have been cooperating) because they feel that has some promise for them in the voting booth here. It presents an opportunity to smack around "free trade" for the benefit of their client special interest group constituencies as well as the economically illiterate among us. As we've pointed out, China has noticed and is not above playing such games itself. Overall, this is a dangerous game and it can have a direct and adverse effect on our own economy and personal well being.

Fair warning.

UPDATE: Speaking of China:
China is also building new safety testing labs, and upgrading food safety inspection offices at 16 ports and basic infrastructure in central and western China as part of a multiyear, $1.1 billion project, said Yan Jiangying, spokeswoman for the State Food and Drug Administration.

[...]

On Thursday, China said it had temporarily banned exports by two toy manufacturers whose products were subject to massive recalls in the U.S. and urged them to overhaul their business practices, the government said.

Lee Der Industrial Co. Ltd. and Hansheng Wood Products Factory, both located in the southern province of Guangdong, made toys that were decorated with lead-tainted paint.
I doubt any US toy manufacturer will be doing business with those two companies until they are assured, in multiple verifiable ways, that they won't see lead-tainted paint on their toys.
 
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McQ wrote: "
Mess with your customer base in an unethical manner and have that word get out (and it will) and it can be the death penalty for your company."

Really? Explain, then, Blockbuster, the video rental store.
 
Written By: Sharpshooter
URL: http://
Since these suppliers are not necessarily associated with a specific brand, avoiding a brand won’t help. The brand may in deed suffer, but the supplier can be picked up new brand and I (and even the brand owner) wouldn’t know.
 
Written By: jpm100
URL: http://
Since these suppliers are not necessarily associated with a specific brand, avoiding a brand won’t help. The brand may in deed suffer, but the supplier can be picked up new brand and I (and even the brand owner) wouldn’t know.
You might not possibly know, but at the point that the supplier was identified to the market at large, it is hard to believe that a brand, doing due diligence concerning it’s suppliers, wouldn’t know (unless,of course this brand chooses suppliers blindly without checking them out and then I’d have to doubt their ability to survive for any long term).
 
Written By: McQ
URL: http://www.qando.net/blog
Really? Explain, then, Blockbuster, the video rental store.
I’m not a mindreader, Sharpshooter ... if yours is just a snarky shot at a company with which you are dissatisfied, then cool, I can dig it. But if you are actually asking more than a rhetorical question, you’ll need to be more specific.
 
Written By: McQ
URL: http://www.qando.net/blog
Explain, then, Blockbuster, the video rental store.
I can’t explain Blockbuster, but I can tell you I have been a happy Netflix customer ever since I dropped my BB membership about 4 years ago. I got tired of all the BS late fees. So I walked away and found another solution.

What is your question?
 
Written By: meagain
URL: http://
Ezra, get your head out of your arse and take a real look at the world.

Sharpshooter, BB has apparently changed its ways enough to maintain viability. If enough people want to continue doing business with them despite shortcomings it speaks to their own personal values and preferences that must not be in alignment with your own. How else is it supposed to work?

 
Written By: Grimshaw
URL: http://
Trading at $4.15, compared to their historical high of around $30 in 2002. Your example helps prove McQ’s point, sharpshooter. Perhaps you should change your screen name to "self-inflicted gunshot wound".
 
Written By: Phil Smith
URL: http://
it is a real stretch to call anyone a ’market-booster’ or a "free marketeer" who would countenance poisoning their customer base for a quick buck.
I consider this utopian thinking and historically false.

There is a long, long history, in the US and across the globe, of companies doing exactly that, knowingly, because of profit considerations. We know it better as consumer exploitation.

If you removed all of the regulations that make it a crime to poison your customer base, we would have a whole lot (more) of companies doing exactly that.

I get the impression that you believe that the market will weed out companies that function in this exploitive manner, but the reality is often the opposite, pressured by competition, companies that do NOT engage in these type of activities are often weeded out.

How many US and even other foreign manufacturers have been weeded by competition from Chinese manufacturers, who are obviously taking advantage of extra margins associated with both consumer and labor exploitation.

The market is terrible about policing itself, and as long as the number of casualties is low, businesses far too often choose to continue producing products they KNOW are dangerous, because it is more profitable than alternatives.

Please read the following with an understanding that libertarians and conservatives believe that the market would correct the problems described and opposed regulations to make these activities crimes....
Northampton, Mass. - If future historians ask which developing economy was the bigger counterfeiter of consumer products – China or the United States – it won’t be easy to decide. Product adulteration is neither a foreign monopoly nor a new issue.

Current scandals might lead people to believe that food and product safety regulations were the natural evolution of business and good government. But it took consumer outrage to bring needed changes in America in the early 20th century.

A century ago, US consumers feared domestic products. They distrusted everything from candy to meat to medicine. Newspapers broke stories daily revealing that even reputable department stores sold flatware with less silver content than advertised and walnut furniture made of gum wood. Buyers had to be wary or they would be cheated or, worse, poisoned.

Product adulteration was already a venerable tradition in America by then. During the Civil War, Union soldiers’ shoddy uniforms fell to pieces and their shoes disintegrated. They paraded barefoot, and recruits sometimes had to use flour sacks to hide their bare backsides.

Why was long underwear red? Because red dye wouldn’t take well to cotton. So the bright red color was proof that long johns were genuine wool.

By the time Upton Sinclair published his exposé of the meat industry, "The Jungle," in 1906, the adulteration of meat was old news. During the 1898 Spanish-American war, consumers became sensitized to the issue of "embalmed beef" when a general went public about the impurity of Army meat rations. The defense that the beef was no different from that sold to the public only increased the alarm. Although the charges were never proved that spoiled meats were doctored to make them appear fresh, a skeptical public demanded more government watchdogs.

Any food could be other than what it seemed. Blackberry brandy, a remedy popular with invalids, rarely contained even a trace of blackberries, but plenty of coal-tar dye. Candy, too, was colored with harmful dyes and tainted with ingredients such as paraffin and shellac. Milk, meanwhile, was preserved with formaldehyde.

Still, Americans prefer to look abroad for culprits. Asians have always been an easy target. When Chinese restaurants emerged in the 1890s, rumors spread that they served cat and rat meat. British tea growers proclaimed to the US market that their teas were 100 percent pure, but that Chinese teas contained foreign matter. Today, it is hard to credit how stigmatized the "Made in Japan" label once was.

Food adulteration and product counterfeiting has nothing to do with nationality, ethnicity, or even supposed backwardness. Economic development actually facilitates adulteration. Although it is as old as the history of trade, in its modern manifestations it is often the stepchild of science.

Scientific development breeds sophisticated trickery via new preservatives, dyes, and fillers. The conditions that promote adulteration are clear: a rapidly expanding economy and lax government controls, combined with bargain-hungry consumers driving a market for cheap goods. It can happen anywhere.
If every business operated on the assumption that every customer was their mother, we probably we would not need regulations, but obviously we know that this is not the assumption that many business operate from.
Mess with your customer base in an unethical manner and have that word get out (and it will) and it can be the death penalty for your company."
And yet companies keep doing it, and would more if they could get away with it.

This is a fundamental problem with libertarianism, the misguided notion that the market will cause men to behave with honor or punish them if they don’t. It is the mirror image of those that say communism can work, that human nature will just change for the benefot of the greater good.

I think the failure is in a lack of understanding of the nature of markets themselves as something that can be free at all. This is wrong, because markets themselves are artificial, they are constructs with built in prejudice and built in advantages. If you want to see a free market, look at Mogadishu 10 years ago. That’s what a free market looks like. When you build in rules to prevent the worst aspects of Mogadishu, it’s no longer a free market.

The best we can hope to do try to balance a desire to maximize freedom while at the same time minimizing exploitation.

Cap

 
Written By: Captin Sarcastic
URL: http://
I consider this utopian thinking and historically false.
And I think you’re missing the point just as Klein did. I don’t deny those things happen, my point is that "free marketeers" and "market boosters" don’t try to kill their customers. Hardly utopian and certainly, given the vast preponderance of successful "free marketeers" and "market boosters" who’ve never done that vs. the criminal types you describe, a fact of history.
 
Written By: McQ
URL: http://www.qando.net/blog
And I think you’re missing the point just as Klein did. I don’t deny those things happen, my point is that "free marketeers" and "market boosters" don’t try to kill their customers.
"Try to kill their customers"?

Okay, you got me there. I agree, it is not their goal to kill their customers, and I would assume that they hope that the free market they boost would not include companies that will make balance sheet decisions on acceptable losses (deaths) that would more expensive to prevent than it would be to just eat the liability when it comes. But companies do this on a regular basis.

Think Big Tobacco, Big Pharm, Big Oil... all have examples in the history of making exactly those decisions.

Your comment sounds like the Billy Beck "Exception rule".

Sure companies do horrific things in capitalist systems, but since those things are not in keeping with accepted morality, they are excluded from being considered as part of that system, therefore, any company that DOES poison it’s customers (think lead based paint in the US, AFTER we knew it was dangerous, but before we outlawed it) cannot be considered capitalists (or in this case, free marketers or market boosters), and therefore not one single capitalist enterprise violates accepted morality.





 
Written By: Captin Sarcastic
URL: http://
"Think Big Tobacco..."
Hey, moron: I’m the one who makes that decision, every single time I light up.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
Hey, moron: I’m the one who makes that decision, every single time I light up.


Wow, you are insufferably dense on this. Smoking in general is a choice, and I have no problems whatsoever with companies willing to cater to people’s desires, even when they are unhealthy. This has absolutely nothing to do with the unethical behaviors of the tobacco companies in their efforts to obfuscate reports of the dangers of smoking and to enhance the dangers of the product for maximum danger and maximum profitability.

It’s fine for them to sell cigarettes. On this point I am sure we agree.

It’s not fine for them to lie about the dangers of cigarettes when they clearly knew they were lying. And it’s not for for them to make the product more dangerous, not to make it more appealing, but to make it more addictive, purposely. Apparently, on this point, we disagree. You must obviously support this behavior, or, you are too stupid to recognize that this was my point, not YOUR decision making, but THEIR balance sheet decisions on acceptable losses (deaths) that would be more expensive to prevent than it would be to just eat the liability when it comes.

Tobacco companies have been manipulating nicotine levels in cigarettes in order to create and sustain addiction, this has been the scientific, and legal finding.

So yes, you have been making choices, but they have too, and they have chose to make cigarettes MORE dangerous to enhance their bottom line.

So, is this capitalism Billy Beck? Are the companies that do these kinds of things capitalist companies? Are they?


 
Written By: Captin Sarcastic
URL: http://
Sure companies do horrific things in capitalist systems, but since those things are not in keeping with accepted morality, they are excluded from being considered as part of that system, therefore, any company that DOES poison it’s customers (think lead based paint in the US, AFTER we knew it was dangerous, but before we outlawed it) cannot be considered capitalists (or in this case, free marketers or market boosters), and therefore not one single capitalist enterprise violates accepted morality.
That’s not what I said. I pointed out that violations happen all the time, but that the market, which obviously includes the customer base, deals with it an various ways depending on the nature and gravity of the violation, anything from finding a substitute until the company comes back in line with its pricing or service to the literal "death sentence" where a company is forced from the market because of its activities/actions when the consumer refuses to deal with it anymore.

There are few, if any, who can claim to be ’free marketeers" or "market-boosters" and advocate screwing over their customer base as a foundational principle of a free market. It is simply illogical.

Information is the key to the proper functioning of a free market and as information becomes more readily available to the customer base fewer and fewer examples of long running poor performers will be evident. They’ll be punished and pushed out of the market much more quickly.

The two Chinese companies cited in the update are most likely going to be punished fairly severely by other brands who may be doing business with them now, but have lost confidence in them and will move that business elsewhere. If you don’t think other companies who stand to benefit won’t take notice of the problems and insure they don’t duplicate them, you’re wrong.

That sort of information makes an informed consumer and one who can identify the choices available and exercise his freedom to choose for whatever reason is important to him. And that choice has consequences when multiplied by others choosing one competitor over another for the very same reason.

That’s how it works, and the more information and the more readily available that information becomes the faster that happens. That argues powerfully that the ’free market’ doesn’t accept the premise that "anything goes" as a base principle, such as you and Klein seem to be contending.
 
Written By: McQ
URL: http://www.qando.net/blog
"So yes, you have been making choices, but they have too, and they have chose to make cigarettes MORE dangerous to enhance their bottom line."
And who doesn’t know this?
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
Really? Explain, then, Blockbuster, the video rental store.
What’s to explain? theyre losing money, closing down stores- they announced they were closing 282 stores almost 2 months ago.
 
Written By: h0mi
URL: http://
And who doesn’t know this?
So now we get to the bottom of it.

Caveat emptor, expect immorality.

I asked you if this is capitalism, I guess your failure answer shows that you do not want to explicitly admit your hypocrisy.

Is a business that is amoral still a capitalist enterprise?

I am so looking forward to an answer to this, or no answer, either way your own words will close this out.

 
Written By: Captin Sarcastic
URL: http://
"So now we get to the bottom of it.

Caveat emptor, expect immorality."
Really? Is that your bottom line? If it really is, then I’d like to see you account for the innumerable businesses that conduct themselves honorably. For instance, tell me why you think PepsiCo ratted-out the Coca-Cola employee who stole the formula and offered to sell it to them.

"Expect immorality"? No, thank you: I don’t do that any more than I "expect" every person I meet on the street to be a criminal, and for all the same reasons. But none of those reasons guarantee that criminals do not exist. They do, and they’re why we hold the concept of criminals in mind.

This logic is also at the root of a rational concept of capitalism.

And that’s as far as I’m going to go at attempting to reason a fool like you out of a position that he didn’t reason into, to begin with.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
Really? Is that your bottom line?
I am not the one who, when when confronted with amorality in our system shrugs his shoulders and says... "And who doesn’t know this?"

You are the one who brushes off gross immorality by suggesting that people should just have somehow known that their tobacco products were being carefully manipulated for maximum danger of addiction, while at the same time the same tobacco companies were publicly denying health risks they KNEW to be present in their product.

What I heard from YOU was that we should have EXPECTED IMMORALITY.

I don’t expect immorality, but I recognize it’s existence and want to take steps to stop it. It’s you and your ilk that suggest I am immoral for interfering in the free market while you sluff it off like it’s no big deal.
And that’s as far as I’m going to go at attempting to reason a fool like you out of a position that he didn’t reason into, to begin with.
He who establishes his argument by noise and command shows that his reason is weak.
 
Written By: Captin Sarcastic
URL: http://
"You are the one who brushes off gross immorality by suggesting that people should just have somehow known that their tobacco products were being carefully manipulated for maximum danger of addiction..."
Wrong. I’m the one who rejects the equivocation of immorality with "capitalism".

You have become confused (almost as badly as that tripe you typed into comments at that other post) but I’m always here to help.

No charge.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
Wrong. I’m the one who rejects the equivocation of immorality with "capitalism".
Is this your way of answering my original question....
Are the companies that do these kinds of things capitalist companies?
If you are saying that it is NOT capitalism, fine, then I revert to my original point....

Think Big Tobacco, Big Pharm, Big Oil... all have examples in the history of making exactly those decisions.


Here’s YOUR logic, restated to emphasize the lunacy... All capitalist enterprises are honest, any purported enterprise that is dishonest is not a capitalist enterprise. And with that circular logic, you IGNORE immorality within the system and pretend that any immorality or amorality is alien to the system.

Maybe you should do a little reading about marketing in America or anywhere, and then get back to me on that whole equivocation thing.
No charge.
And worth exactly that.
 
Written By: Captin Sarcastic
URL: http://
"All capitalist enterprises are honest, any purported enterprise that is dishonest is not a capitalist enterprise."
That’s exactly right, for all the very same reasons why we don’t call an honest person a criminal. You can call it "circular" if you want to, but that’s your problem with identification according to essentials, and nobody is responsible for it but you.
"And with that circular logic, you IGNORE immorality within the system and pretend that any immorality or amorality is alien to the system."
I most certainly do not. That’s your assertion and it is not true.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
I most certainly do not. That’s your assertion and it is not true.
Can you explain why your response to immorality by a huge industry was "And who doesn’t know this?"?

Are you agreeing they are immoral? Are you saying they are not capitalist? Are you just acquiescing to corruption?

When you made the comment, "And who doesn’t know this?" you certainly seem to be nonplussed by an example of deadly immorality, further confirmed by your assertion that the tobacco companies have nothing to do with people’s choice to use their product.

I have to ask, in view of this logic, "All capitalist enterprises are honest, any purported enterprise that is dishonest is not a capitalist enterprise." , I have to ask, is any enterprise that does anything dishonest not a capitalist enterprise, or is this a matter of degrees?

Does the butcher who put his thumb on the scale once equate to the mafia?

A tobacco company says there is no evidence that cigarettes are addictive (a while back, while they were still denying, but the science was in) Is it different when a movie ad campaign quotes a critic as saying "sleek and sexy", when the critic actually said, "sleek, sexy, and utter crap" (true story, the movie was Ultraviolet). Sure, in one case, customers may end up dead and the other will only kill 80 minutes and waste $9, but they are bith dishonest, right? Neither can be capitalist, right?

American companies were selling lead paint after the dangers were known, all the way up until it was made illegal to do so, and then some after that, because the margins were good. That does not define American capitalism, but it is endemic. Does this recognition on my part make me anti-capitalist, or just a good consumer? I think the latter.

Let’s test the honesty of this statement,
"Expect immorality"? No, thank you: I don’t do that any more than I "expect" every person I meet on the street to be a criminal, and for all the same reasons. But none of those reasons guarantee that criminals do not exist. They do, and they’re why we hold the concept of criminals in mind.
Do you purchase products based on a companies advertising, or do you do independent research? If you don’t buy based on advertising, why not, don’t you trust them?





 
Written By: Captin Sarcastic
URL: http://
"Can you explain why your response to immorality by a huge industry was ’And who doesn’t know this?’?"
Yes. I can.
"Do you purchase products based on a companies advertising, or do you do independent research?"
It completely depends on the product.

You have an extraordinarily crippled conceptual faculty.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
Yes. I can.
"Do you purchase products based on a companies advertising, or do you do independent research?"
It completely depends on the product.

You have an extraordinarily crippled conceptual faculty.
Yeah, yeah... you’re all flame, no fire.

Face it, you cannot support your own words without contradicting your own words, so now you are reduced to empty insults.



 
Written By: Captin Sarcastic
URL: http://
Call it an insult if you want to: I see a fact.
 
Written By: Billy Beck
URL: http://www.two—four.net/weblog.php
I see a fact.
When you figure out the difference between an opinion and a fact, maybe you’ll be capable of participation.



 
Written By: Captin Sarcastic
URL: http://
Examples of unethical behavoir by executives are not examples of market failures.

A market failure would occur only if the executives could continue to act unethically with impunity. This can happen when there is a monopoly or insufficient competition due to barriers to entry or when customers are unaware of the problem.

Case in point - I remember a story (on 60 minutes, I think) about a Soviet pharmaceutical manufacturer that substituted saline for insulin when production fell short. Without any competition the problem went uncorrected for years.
 
Written By: JL
URL: http://
This is a fundamental problem with libertarianism, the misguided notion that the market will cause men to behave with honor or punish them if they don’t. — Captin Sarcastic
I expect those men and women at the helm of any business I deal with to understand that if I am displeased with their product or service in any way I will not hesitate to complain, demand satisfaction, drop them like a rock, warn others of the problems I’ve had, patronize their competitors and in any other way I like go along my merry or disgruntled way without any regard whatever for their well-being and bottom line. With the glaring exception of Verizon, may it be forever cursed, most establishments I engage seem to understand this perfectly, and the whole set-up for the most part works like a charm. I’m generally impressed by how easy it is to get what I want.
It is the mirror image of those that say communism can work, that human nature will just change for the benefot of the greater good.
I’m not sure what you are saying here. Is it that any notion of the market exerting a good influence on human behavior is just as quaint – and wrong – as the communist notion that we all want to get up each morning and serve “the common good”?

If so, I disagree. When I have the array of choices that the market ever more diligently and satisfactorily provides, anyone wishing to obtain and keep my business – and avoid such penalty as I may exact if I’m disappointed – will treat me well. That’s just common sense.

Also, I just have to say something about that whack-ass CSMonitor article you quoted earlier. Particularly:
Current scandals might lead people to believe that food and product safety regulations were the natural evolution of business and good government. But it took consumer outrage to bring needed changes in America in the early 20th century.
For the life of me, I can’t imagine why the author supposes that “consumer outrage” would somehow be a force not subsumed by “the natural evolution of business and good government.” It is as though she thinks nature or natural evolution shouldn’t allow for people getting angry and for that anger having an impact.

And what the hell is a person supposed to make of her assertion, “Economic development actually facilitates [food] adulteration”? That’s one of the most screwball alarmist statements I’ve ever read and, since I’m commenting anyway, I just wanted to say so.
 
Written By: Linda Morgan
URL: http://
McQ: You might not possibly know, but at the point that the supplier was identified to the market at large, it is hard to believe that a brand, doing due diligence concerning it’s suppliers, wouldn’t know (unless,of course this brand chooses suppliers blindly without checking them out and then I’d have to doubt their ability to survive for any long term).
Wallstreet in entranced by ’made in China’.
Wal-Mart, the biggest retailer, is also supposedly entranced by ’made in China’.

Adding to those pressures, your competitors that are there getting some benefit of the cheap labor. You take the crap shoot that you won’t be the one that this backfires on. Or, you become non-competitive in the short term and go out of business.
 
Written By: jpm100
URL: http://
I expect those men and women at the helm of any business I deal with to understand that if I am displeased with their product or service in any way I will not hesitate to complain, demand satisfaction, drop them like a rock, warn others of the problems I’ve had, patronize their competitors and in any other way I like go along my merry or disgruntled way without any regard whatever for their well-being and bottom line.
I say that it is a misguided notion that the market will cause men to behave with honor or punish them if they don’t because is it IS a misguided notion. Customer satisfaction certainly has an impact on how enterprises treat their customers, true enough, but that’s a sliver of transaction, the most important to the consumer, but a small piece of the total transaction.

Customer’s generally don’t get mad at companies behave unethically, as long as they get decent service, a good price, and an acceptable quality product. So all along the way of the transaction companies have many, many ways to behave unethically and still provide their customer’s with a good experience. As I pointed out earlier, some examples of these unethical behaviors by some of our largest INDUSTRIES (not individuals, not companies, but entire industries) are the tobacco companies manipulation of the nicotine levels in cigarettes for maximum additive potential, the oil companies who’s own internal memo’s show that they WANTED to reduce refining capacity, because the excess capacity we had in the past two decades was keeping the profit margins down, and finally, the pharmaceutical industry, which was involved in several huge scandals, including the 1990 generic drugs scandals, where pharm companies were handing bags of money to FDA officials.

Corporations are run by CEO’s who have one job, maximize shareholder value. They need to avoid upsetting customers, they need to provide good service, and perceived good products, and perceived good prices, and they need to make as much profit as they possibly can in the process. As much as a free market might encourage the positive behaviors of good service and fair pricing, it also encourages unethical behaviors, and there are no market forces to address behaviors that do not negatively impact customer service and perceived product price and quality.

The market does not police itself, and it was not the market that uncovered lead in the paint and aduleration of foods from China, it was government regulatory bodies, which were vehemently opposed by "free marketers" and "market boosters".

 
Written By: Captin Sarcastic
URL: http://
Cap, in your zeal to hammer those you believe to be purists, you over extend.

The market does police itself, though not always completely and never with perfection. What would you call the Consumer Union (publishers of Consumer Reports)? And why would you expect the market to create redundant policing entities for everything when, ostensibly, government bodies exist to do that (even though they also fail)? Why would the market add more costs to the taxes already spent for these govt. agencies unless the need was overwhelming?

You’re hung up on ’perceived’ as well. You don’t think the market will react if a product causes actual harm?
 
Written By: Grimshaw
URL: http://
What would you call the Consumer Union (publishers of Consumer Reports)?
If we, as consumers, relied more on Consumer Reports, and less on marketing, then I would agree that market could police itself quite well. An educated, and perhaps socially conscious, consumer could make many regulatory bodies and laws redundant and unnecessary, but in a nation of 300,000,000 people, about 1% subscribe to Consumer Reports.

I could say that I am disappointed with consumers, but the point is that our consumers don’t do much to prevent the behaviors I have described.

And then there’s the media, the fifth column, the watchdogs, oh, and the people who’s income is derived from the marketing dollars of the companies we would have them watch.

I am not saying that capitalism is bad, it’s the best system that could possibly be, but people who want to leave companies to their unethical behavior and "let the market sort it out" are just wrong, because the market won’t sort it out.

As I said, a good market is a balance between providing as much freedom as possible to enterprises, balanced against protecting consumers and labor from exploitation, because without protection against exploitation (often with it), exploitation will happen... it has happened over and over again.

Cap
 
Written By: Captin Sarcastic
URL: http://
"but people who want to leave companies to their unethical behavior and "let the market sort it out" are just wrong, because the market won’t sort it out."
So are you concerned for yourself (and family) because you may be a victim of unethical behavior that you can’t detect and/or are you concerned for others being victims?
 
Written By: Grimshaw
URL: http://
So are you concerned for yourself (and family) because you may be a victim of unethical behavior that you can’t detect and/or are you concerned for others being victims?
I am more concerned with the integrity of the market, that impacts both.
 
Written By: Captin Sarcastic
URL: http://
That’s how it works, and the more information and the more readily available that information becomes the faster that happens. That argues powerfully that the ’free market’ doesn’t accept the premise that "anything goes" as a base principle, such as you and Klein seem to be contending.

Except that it’s happening under a regulatory state. In China, where bureaucratic inefficiency and local greed creates, basically, a free black market, you can get away with putting as much lead in your paint as you want.

It’s precisely because America isn’t a libertarian free market, that this is being stopped. Otherwise it would only stop once we formed mobs and burned stores. That’s how it used to go down, before regulatory states existed. That’s still how it works in third world countries.
 
Written By: glasnost
URL: http://
I am more concerned with the integrity of the market, that impacts both.
More concerned with the integrity of the market than how it affects you? How utterly selfless - and unbelievable.

 
Written By: Grimshaw
URL: http://
Customer’s generally don’t get mad at companies behave unethically
Customers get mad at companies all the time for all sorts of reasons including ethical lapses. It’s not at all uncommon for such anger and perceptions — rational and well-founded or not — to become key factors in a person’s dealings with a given company.

You seem to think it problematic that people, when they’re out and about with their consumer hats on, don’t always make the business ethics of companies their top priority in deciding who to do business with. There’s neither any reason or need for people to do that. The whole idea of a marketplace is predicated on the assumption that people — when they’re buying, selling, competing, whatever — will look out for their own self-interests and put their own well-being and prejudices and various moods and what-have-you first. You conduct yourself with that assumption — recognition, really — in mind and watch as the whole vast enterprise takes off.
it was not the market that uncovered lead in the paint and aduleration of foods from China, it was government regulatory bodies
But according to that CSMonitor article you excerpted, it was customer outrage that opened the door for government to create those regulatory bodies to begin with. Remember: But it took consumer outrage to bring needed changes in America in the early 20th century. I would personally disagree that all those changes or the many many further governmental intrusions that followed were all that necessary, but it’s a given that they’re there to do a job. Do you think if the government hadn’t muscled in on the task of oversight than no other institutions would have taken it up? Or, do you think that Mattel and others are dragging their feet unnecessarily now regarding recalls or, for that matter, the overall wisdom of doing business with the Chicoms? Seems to me they’re stepping pretty lively, not because Uncle Sam says so but because of their very well-founded fear of what their customers will do.
If we, as consumers, relied more on Consumer Reports, and less on marketing, then I would agree that market could police itself quite well.
Do you work for them or something?
I could say that I am disappointed with consumers
This is just sad. And kind of amusing.
 
Written By: Linda Morgan
URL: http://
"Otherwise it would only stop once we formed mobs and burned stores."
I don’t really see the problem with this. If someone is knowingly poisoning my child, it’s the least he deserves.
 
Written By: Grimshaw
URL: http://
b. Do you think if the government hadn’t muscled in on the task of oversight than no other institutions would have taken it up?

Sure they would have - see my comment:

It’s precisely because America isn’t a libertarian free market, that this is being stopped. Otherwise it would only stop once we formed mobs and burned stores. That’s how it used to go down, before regulatory states existed. That’s still how it works in third world countries.

I’m not sure the Mobs Burning Down Stores marks a more economically efficient approach.
 
Written By: glasnost
URL: http://
Or, do you think that Mattel and others are dragging their feet unnecessarily now regarding recalls or, for that matter, the overall wisdom of doing business with the Chicoms? Seems to me they’re stepping pretty lively, not because Uncle Sam says so but because of their very well-founded fear of what their customers will do.
So what ? It’s too late - the damage is done. You don’t pardon a criminal because he stops his criminal behaviour once caught, you put him away and try to engineer a system that excludes the criminal behaviour. Are you seriously saying that it’s OK for consumers to die from lead poisoning as long as the market reacts afterwards ? What about those people who could have been saved if, rather than exposing the greedy businesspeople to the temptation of employing cheap but dangerous materials or methods, we use our democratic power of government to regulate business behaviour so that consumers are not put in mortal danger every time they buy a product ?

To argue that it’s OK to trust the market because it reacts is beneath contempt ! It shows a socipathic disregard for those whose lives are necessarily harmed in order that the market can be informed and react ! It ignores the fact that entrepreneurs don’t need to work within the system in perpetuity, they just need to make enough to get rich. It is a false and mendacious argument which uses semantic suggestion to try and characterise the movement of capital as ’free’ but the power of democratic regulation as anti-libertarian, when in fact it is the very regulation of all manner of behaviours - driving, housebuilding, cooking, manufacture - that gives people the freedom to live their lives in relative safety and comfort.
 
Written By: blewyn
URL: http://
"I’m not sure the Mobs Burning Down Stores marks a more economically efficient approach."
I’ll bet it is because I bet in the long run it minimizes immoral practices a h*ll of a lot faster than what we call justice today.
 
Written By: Grimshaw
URL: http://
"rather than exposing the greedy businesspeople to the temptation of employing cheap but dangerous materials or methods, we use our democratic power of government to regulate business behaviour so that consumers are not put in mortal danger every time they buy a product ?"
Are you arguing that government regulation makes us safe? Are you arguing that in absence of said regulations we would be in mortal danger every time we buy a product?

 
Written By: Grimshaw
URL: http://
Are you seriously saying that it’s OK for consumers to die from lead poisoning as long as the market reacts afterwards ? — blewyn
No kiddies are going to die for having gnawed on Elmo’s leg or whatever part of whatever toy was painted with the offending paint. I’d give you a source for that, but the information is ubiquitously available so you should be able to allay your own hysteria. But are you seriously suggesting that in this dangerous dangerous world some network of government regulatory bodies can actually pre-empt and prevent every sort of mishap that has anything to do with commerce (and might therefore be blamed on a manufacturer or vendor)?
To argue that it’s OK to trust the market because it reacts is beneath contempt ! It shows a socipathic disregard for those whose lives are necessarily harmed in order that the market can be informed and react ! It ignores the fact that entrepreneurs don’t need to work within the system in perpetuity, they just need to make enough to get rich.
To argue that it’s imperative to trust government regulation because it pre-empts and prevents market mishaps is beneath stupid ! It shows a sociopathic disregard for those whose lives are necessarily bled away in order that government can seize and then throw their money around willy-nilly and convince shrill shrieking dolts like you that it’ll take extra-special good care of you always ! It ignores the fact that taxpayers do need to work in perpetuity to pay for so much nonsense, because you’re credulous enough to believe that government and only government can protect you from life itself.
 
Written By: Linda Morgan
URL: http://
I’m not sure the Mobs Burning Down Stores marks a more economically efficient approach. — glasnost
Amazing, isn’t it, glasnost, that such unruly witless rabble as ourselves manage to uphold so refined and efficient an edifice as our federal government? And that it’s all made possible, somehow, by their holding us down.
 
Written By: Linda Morgan
URL: http://
Are you arguing that government regulation makes us safe? Are you arguing that in absence of said regulations we would be in mortal danger every time we buy a product?
Yes.
 
Written By: blewyn
URL: http://
No kiddies are going to die for having gnawed on Elmo’s leg
This time....
so you should be able to allay your own hysteria.
Demanding proper regulation of the behaviour of those who - as history has shown time and time again - are unable to resist profit no matter what harm it causes to others is hysteria ?

Wanting to live in a building that won’t collapse on me is hysteria ?
Wanting my kids to have toys that won’t poison them is hysteria ?
Wanting to drive a car that doesn’t explode when you indicate left is hysteria ?
But are you seriously suggesting that in this dangerous dangerous world some network of government regulatory bodies can actually pre-empt and prevent every sort of mishap that has anything to do with commerce (and might therefore be blamed on a manufacturer or vendor)?
Not all of them, no, but certainly a very significant proportion, both by detection and punishment, and the deterrent effect.
To argue that it’s imperative to trust government regulation because it pre-empts and prevents market mishaps is beneath stupid !
Well I’ll take stupid over evil any day of the week, but let’s hear your psycho argument anyway...
It shows a sociopathic disregard for those whose lives are necessarily bled away in order that government can seize and then throw their money around willy-nilly
Er...so let me get this straight. You’re saying that to prevent businesspeople from actually killing or maiming others by selling them dangerous products in the hope of gaining riches.....is sociopathic because you’re depriving those businesspeople of the money they would have otherwise made ?

Or are you suggesting that tax is sociopathic, because you’re taking money from some people and giving it to other people ?
and convince shrill shrieking dolts like you that it’ll take extra-special good care of you always !
That’s what it’s there for. Why else would I pay it ?
It ignores the fact that taxpayers do need to work in perpetuity to pay for so much nonsense, because you’re credulous enough to believe that government and only government can protect you from life itself.
If you won’t work, who will do the work ? Do you think other people should do the work for you ? Why ? Who will do the work for them ?

I don’t ask the government to protect me from life (whatever that means), but I do ask it to do what it can to protect me from people who would poison me just to save a buck. Funnily enough so do most people, which is why, as a democratic majority, we generally get our way on this question. If you don’t like that, you know what you can do.

 
Written By: blewyn
URL: http://

 
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