The market is a force of nature
The Justice Department is once again demonstrating its miraculous ability to see into the future. Here’s an excerpt from Deputy Attorney General James M. Cole’s statement at the AT&T/T-Mobile press conference on August 31:
The Department filed its lawsuit because we believe the combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for their mobile wireless services.
Consumers across the country, including those in rural areas and those with lower incomes, have benefitted from competition among the nation’s wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to reap the benefits of that competition.
This was placed in an all-too-typical context by the cast of This Week in Google yesterday afternoon. Host Leo Laporte read this excerpt and declared, ”Two thumbs up, that’s great.”
Then Laporte concluded the conversation with this assetion: “I’ve heard libertarians say this: the one area of government involvement that does make sense in the economy is prevention of monopolies. That’s one thing we clearly need, and it’s one place that only the government can intervene. The market in fact promotes monopoly.”
I’m sure there are some who identify somehow with libertarian ideology who may demonstrate their ignorance of (or disdain for) legitimate libertarian laissez-faire market theory by making a statement like the one above. Indeed, people across the spectrum of libertarianism continually debate the proper role and scope of government in society. Nonetheless, I doubt there are many libertarians who would argue that of all the ways government can influence the market, preventing monopolies is the most legitimate or most effective. It is in fact neither legitimate nor effective.
The overwhelming opinion of Americans seems to be that a free market without any regulation or oversight will inevitably result in enormous monolithic companies that jack up prices and reduce quality and otherwise take advantage of consumers. The truth is that monopolies rarely last very long in a true free market scenario. From a free market perspective, as a monopoly becomes larger it becomes top heavy and inefficient, it loses focus and stops responding to consumer demand. Then it fails and something leaner, more focused, and more intent on providing what consumers want takes its place
You see, the market is not a “thing.” The market is not a group of investors or a gang of crooks. The market is a force, like gravity. It exists whether we want it to or not, whether we acknowledge it or not. If there is demand for blue jeans (or narcotics, or Bibles, or whatever), and an outside force attempts to quash this demand, it will be met in some other way. A black market will develop, styles will change, loopholes will be found. When the regulators look into their crystal ball, as Deputy Attorney General Cole has, and speculate about what may happen in order to inform their actions, they distort the market process just like the mass of a black hole distorts the fabric of space-time. All the rules of the market still apply, but the outcome is not optimal.
The market will dictate the outcome no matter what regulators decide. Once we realize that the market is not fertile soil for monopolies, we see that what has really been lost are the benefits that may have come from mergers and acquisitions. Suppose the regulators speculate that a merger will adversely affect the poor when in reality it would have positioned a company to better serve the poor in some way that the regulators hadn’t anticipated. And we’d never know.
Ron Paul at CPAC 2011 in Washington, DC. Image courtesy of Gage Skidmore on Flickr.
Thunderous applause and raucous cheers rise up each time Ron Paul makes a statement at one of the debates between the Republican presidential candidates. The response seems so disproportionate with that of the other candidates, I’ve heard several people comment about it. Even so, Ron Paul doesn’t seem to exist as far as the mainstream media is concerned.
Ron Paul finished a close second in Saturday’s straw poll in Ames, Iowa. He was just 152 votes short of Michelle Bachmann’s winning tally. But Sunday’s headlines tended to focus on Bachmann, Tim Pawlenty, who came in third, Texas Governor Rick Perry, and Mitt Romney, who finished sixth and seventh, respectively.
Ron Paul did finally make the news today. The Daily Show’s Jon Stewart was talking about how the media seem to be ignoring Ron Paul. At least someone noticed.
But seriously, why the media blackout? Presumably, the media ignore Congressman Paul because they think he’s a fringe candidate, a long shot. But the enthusiastic applause in those early debates and–even more–his strong showing in the Iowa straw poll demonstrate that Ron Paul is more than just another face in the Republican candidate crowd. The media have made the wrong call. Ron Paul can’t be ignored any longer.
Of the top 10 candidates in the straw poll, including Perry’s write-in votes, nine of them have relatively similar platforms. Most of them have indicated that they are in favor of torturing prisoners if it serves America’s interests. Most of them are in favor of continuing our wars and military presence all over the world. Most of them are in favor of expanding the powers of the federal government over the lives of individuals in America and around the world in one way or another. They all represent various similar-but-different shades of the Republican establishment. That establishment received 12,003 votes in Ames on Saturday.
Ron Paul, on the other hand, stands for individual liberty, sound money, and a small, Constitutional government that is accountable to the people it serves. His ideas resonated with 4,671 straw poll voters. Among those who cast ballots for the top ten candidates in the straw poll, one quarter saw that Ron Paul is something different. That’s more than a fringe. That’s a number that can’t be ignored.
Subway, not McDonald’s
From my perspective, Subway, not McDonald’s is the enemy of consumers.
McDonald’s seems to spend a lot of time in the spotlight for making Americans fat, making children unhealthy, and worse, I’m sure.
Subway, on the other hand, seems to slide under the busybodies’ radar. Perhaps it’s because their food is so stinkin’ healthy (after all that’s what their advertising tells us, so it must be true. Heaven forbid we should choose food because it satisfies our hunger and happens to be tasty!).
While we were out today, my daughter needed something to eat. She likes the sandwiches at Subway, and asked for one. At Subway, the grown-up combo comes with a bag of chips and a soda; the kids’ combo comes with juice or milk and apples or yogurt. Usually Katelyn gets some of the chips from my combo and we save the yogurt or apples for a snack later on. Today, since it was just Katelyn getting food, I asked if we could substitute chips for the side. The cashier shook her head and said that she couldn’t do that unless we paid extra for the chips.
For a while now, McDonald’s has allowed parents and kids to choose whether they want fries or apple slices with a Happy Meal. Recently, they announced that all Happy Meals would include a smaller portion of both items (no doubt to appease the nutrition Nazis).
Who’s responsibility is it to oversee childrens’ diets? Not McDonald’s, not Subway, and certainly not totalitarian dietitians. For consumers, more choices are always better. I’m less inclined to patronize a Subway because they are less inclined to give me what I want for my money. It’s as simple as that.
In the end, the clerk at our local Subway offered a compromise: I could get a cookie instead of apple slices, and still have the pleasure of purchasing the extra chips. Thanks so much, Subway, for looking out for me.
