The free market myth number two

I often see folk opine how the solution to everything is the free market . This to me is part of the confusopoly . There has never been a free market and I would be happy for anyone to show me where one is :-)
The reasons for this are down to state intervention on one hand either because of health and safety concerns , standardization , taxation or because of the tendency of the formation of cartels and monopolies . This latter is best shown my the behavior of Walmart .
Walmart finds a small town served by just enough people to make it profitable so it opens a store. Then it sells stuff at a loss driving the other shops in the area out of business . Now with it's monopoly position it rises priced . The. town with all the little shops gone becomes run down , people leave because the town is run down , eventually Walmart leaves as with less people it cannot make a profit .
Since there is no free market is it not better to have a planned one with prioritys set by the govt rather than we all be at the mercy of monopolies? Openly admit that is what is happening now and go with it ? Then maybe the environment could come first :-) rather than monopoly profits

David


David

I have seen no evidence that Walmart is selling at a loss in some stores then raising prices when local competition leaves. They may, and probably are, selling "loss leaders" at a loss, but then most grocery stores have been doing that for ages. When I see these sorts of complaints without evidence I usually think its an indicator of the person's bias.

Yes, there is no truly free market, but it would be the fairest and most practical way to go if we can just get people to stop using government to foist their views on everyone else.

And underlying all of the issues with the market is the money. The Federal Reserve system with its debt based inflationary currency is at the heart of the problem. It is unsustainable and is one of the primary causes of the wealth & income disparity we have been seeing lately. That is, the banks and politicians have conspired to ensure that they get rich at everyone else's expense. But I am hopeful that crypto-currencies will allow us to defeat debt based currencies and restore a more sensible, fair, and sustainable monetary system.

I don't think that Walmart has different prices for different stores. They are useful to me, only if I want junk food. I don't buy their clothing, tools, food, or electronics. Low quality is the issue.

I will sometimes buy kitchen and bathroom stuff. If the brand is the same, I'm not willing to pay a penny more, to get it elsewhere.

Walmart probably gets 2% of my retail business. Various organic markets get about 60%, and makers of superior tools get much of the rest.
.........
I find most of my soap, shampoo, spices, cleaning supplies, light bulbs ... in houses that I demolish. Some of it probably came from Walmart. I prefer higher end stuff, but beggars ... Last month an ocean front house produced organic olive oil and 50 spices. Shopping, without the troublesome issue of having to pay.

I think this article is of interest.  I read it last year shortly after it was posted, and I still think about it and wonder how the people are doing today.  If they've been able to grow more of their own food.  If they've found ways to create and keep alive community.  If they've survived.

What happened when Walmart left
https://www.theguardian.com/us-news/2017/jul/09/what-happened-when-walmart-left

Predatory pricing and Walmart
https://ilsr.org/walmart-charged-predatory-pricing/

Lori Whit wrote:I think this article is of interest.  I read it last year shortly after it was posted, and I still think about it and wonder how the people are doing today.  If they've been able to grow more of their own food.  If they've found ways to create and keep alive community.  If they've survived.

What happened when Walmart left
https://www.theguardian.com/us-news/2017/jul/09/what-happened-when-walmart-left

That was a good read. In it I saw very clearly "The Seen and the Unseen". The town was dying because the major job source, coal mining, was drying up. It looked to me like Walmart extended the life of the town by ten years, but could not prevent it from further erosion. Walmart did a lot for the town, but when they left people got mad at Walmart because they expected it to last forever. I'm sure others will read the article differently than me.

Ron
I addressed the gov vs the people thing in the other thread . In short I think the answer is in the constitution :-)
As far as the money / debit thing I think that is another issue separate to the idea of free trade . I may start another thread about it .
As for the free market being the fairest for me it's the worst choice as I have seen it leads to monopolies etc etc In this I think Marx was right .

David

While I believe that the debt /bank corporate monopoly bulls hit must go down, I don't think the bit coin model is the path to go down.  The reason is that bit coin currently burns up more electicity than Ireland to 'mine' it's algorithms with computers.  And, number two, it is right now it is a small market, and number 3 is only accessible by the techno elite.  

I've also seen the argument that crypto currencies have no inherent value beyond what people believe it is worth. So it's really no better than paper money or say comic books/baseball cards from 50 years ago. There's a limited number of cards/comics from way back too, but if nobody cares they are worthless, just like crypto currency. The currencies have a small edge in that they can be used in trading, but really it's only useful in bypassing government control, which for some is all that matters. So I personally think crypto currency will continue to have a value based on that, until tech catches up enough to fake or hack it.

I think the crypocurrenty thing is a big big fail waiting to happen . It has even less basis the the debt based currency we have at the moment

David Livingston wrote:I think the crypocurrenty thing is a big big fail waiting to happen . It has even less basis the the debt based currency we have at the moment

I agree. I don't know anything about non-tangible electronic cryptocurrency that computers pull out of thin air, but how long before cryptocurrency is counterfeited? I imagine someone somewhere is smart enough to make fake cryptocurrency.

James Freyr wrote:

David Livingston wrote:I think the crypocurrenty thing is a big big fail waiting to happen . It has even less basis the the debt based currency we have at the moment

I agree. I don't know anything about non-tangible electronic cryptocurrency that computers pull out of thin air, but how long before cryptocurrency is counterfeited? I imagine someone somewhere is smart enough to make fake cryptocurrency.

Without a really, really long and technical description, I can tell you it would be far easier to counterfeit paper currency than cryptocurrency.  In a very real sense, counterfeiting cryptocurrency is "impossible".  The bigger risk with cryptocurrency is having hackers steal it.  I don't agree with David's idea that it has less basis than our current currency because they are both based on the same thing.  People agree that the "money" is worth something, and so it is.  The real hurdle for cryptocurrency is that no one has come up with a really easy way to deal with trading or buying and selling real goods with them.  Cryptocurrencies are too "techy" for most people.  They don't understand how creating the currency works, and people seem to only think money is "real" if they can hold it in their hands.  Ignore the fact that a huge percentage of transactions now use debit and credit cards.  People want to know that if they chose, they could go to the bank and someone could hand them their money.  Right up until the government outlaws cash transactions...

Ok, so if cryptocurrency is nothing but 1’s and 0’s that computer’s “mine”, what backs it? How is it different than our current american dollar where the gubment just prints money at will, since it’s no longer backed by gold & silver like it used to be? I don’t understand cryptocurrencies, but to me, it just seems like manufacturing money from nothing.

Its too magic beans for me too - For me its part of the confusopoly

James Freyr wrote:Ok, so if cryptocurrency is nothing but 1’s and 0’s that computer’s “mine”, what backs it? How is it different than our current american dollar where the gubment just prints money at will, since it’s no longer backed by gold & silver like it used to be? I don’t understand cryptocurrencies, but to me, it just seems like manufacturing money from nothing.

James, that's my point.  Nothing backs it.  Exactly like the currency we use right now :)  Both currencies are worth something simply because people decided they are.  I'm not saying cryptocurrencies are good or bad.  They simply are.

I think it would be reasonable to say that governments back currencies not always very well I accept as for cryptocurrencies .....
I still think it's a bubble
Anyone for some Black tulips ?

David Livingston wrote:
Anyone for some Black tulips ?

My money's in beanie babies.

David Livingston wrote:Predatory pricing and Walmart
https://ilsr.org/walmart-charged-predatory-pricing/

The town I live in is actually named in that article.

The biggest difference between the US dollar and cryptocurrencies is that the United States has the world's largest military and will use it to back the currency. If you don't believe it has value, you can have that argument with a fleet of Predator drones circling your house. You may not enjoy how that argument pans out.

For me, one of the most interesting aspects of our existing market is a similar story. It is the story of strategic reserves. Boiling things down, it comes from the idea that the United States Military has a mandate to have the best and the most of every single aspect of warfare. The most technically capable weapons. The largest military industry. … and the most food for soldiers (logistics wins wars).  This is the biggest reason preserved foods are so much cheaper than vegetables in grocery stores. United States subsidizes companies like Kraft to maintain factories capable of generating an extraordinary surplus of food. Enough say, to feed an army for a decade. This food needs to be shipped anywhere in the world, last years carried in adverse conditions, and be prepared with minimal equipment. Like say, twinkies or mac & cheese… In times of peace though, these factories can be used for the company's will. So they have massive factories subsidized by the government, which drives down the cost of preserved foods far past otherwise free-market conditions. There is no way to compete against this. It's a military mandate, backed by one of the world's richest countries, and it skews the world food markets something severe.

And of course, the same could be said for why corn is so heavily subsidized… corn is a high calorie, versatile food. It turns out the military has an interest there too. They want farmers growing far more corn than we consume. Just in case. In that light, I fail to understand how our current militaristic culture could ever put the environment first. It's just not in the mandate.

Which brings us back to freemarkets as the USA has in reality I think a planned economy in the form of the congressional industrial military complex , a very communist ideal they would rather you did not  realise :-)


David

Free markets exist, but only locally, between individuals.  When you get large organizations involved, they naturally take over.  Being larger, and more powerful, they obviously are better (in their minds, anyway) and justice requires that they assist the "little people".  Of course, they will shift things for their benefit.

This is really a discussion of human nature.  Any large, powerful group (govt., business, drug lords) will try to shift the situation for their own advantage.  If they aren't apposed, they WILL take over.  They may even try to help, bout on their terms.

The inherent flaw some people have is assuming the government is somehow more honest or philanthropic than any other organization.  I've worked for the feds over 30 years and I think most of the people I've worked with were pretty good competent people.  Among the management, I would say much less so.  Their hope of promotion is dependant on pleasing the guy above them, and many of them really, really want that next step up (the whole system is still based on patronage, only now there is more paperwork to make it legal).  Sometimes enough to do bad things, or to allow ill informed decisions to pass with little or no pushback.  

Of course, all of these things exist in industry also.  They are part of any hiarchial system.  Somehow many people have assumed it isn't a big part of govt.  It is huge!  The larger the system, the bigger it gets.

The reason hiarchial systems work is because they allow the king (whatever his title) to focus large numbers of people on a single goal.  Militarily, this gives them a huge advantage over the more socially equal groups.  Doesn't mean it's better, but I think that's why the major societies are now hierarchical.

The problem is that the people most attracted to such power are assholes.  Look around at political leaders in the world.  If you cut through the cover their press gives them, almost all of them are assholes.  

Hence, the need for small local business and government.  There will still be unsavory types attracted to the job, but they are easier to recognize on a local level.

On another note, a decision that might be bad on a national level might be good on a local level, or vise versa.  Example, Wal-Mart sells it's spring stuff starting in Feb.  Probably makes sense in #Florida.  Didn't make sense in Alaska when a kids winter coat got destroyed in Feb and Wal-Mart had no winter coats because corporate made them get rid of the winter stuff and push the spring stuff.  In Feb,in Alaska!  Stupid!  And the federal govt does the same kind of stuff too.  It's the size of the organization that does it.

Ive opened businesses and ran businesses in which major competitors have come in to town. It gives me some insite into your walmart theory. The first insite is walmart doesn't have to lowball pricing when it first comes to town. The advantage walmart (or any new business) has, is that it can only take business away from the existing businesses because it starts out with zero business. This means the existing business can only lose business to walmart because it has it all. The inability for that business to deal with a 10, 20, 50% reduction in business is the reason for their demise. Doesn't really matter if its walmart, a welder, or a carpet cleaner. The amount of business is now split. There are exceptions. I opened one business and our customer base was new customers to the area because the city was growing at a fast pace. We got to 100% capacity without competitors sales declining.

In defense of lowball pricing, lets go back to the welder. If i was a new welder in town,  with my thumb up my butt all day cause i had no business, i would lower my prices till i got my market share and reputation up and then work on raising prices. My family needs fed. Yes, i can advertise, but it costs money also. Why not give that money straight to the consumer? Or should that welder take the high road and let his business fail? If the welder can, why not walmart?

If a person needed an sd card and bananas, would they go to 2 different stores.  Maybe.  What if they needed socks also? Would they go to 3 stores? Probably not. Advantage walmart. If there was no doubt that walmart has nutella in stock and the old grocery store may or may not have nutella, would you drive to the other places with hope, or go to walmart for the sure thing?

I see businesses failing to change with the times. Its choice. I'm not here to criticize their choices. Its their business to run. I'll give one example. Feed stores. One store is computerized. They store my sales data. In January they mail out a statement of everything i bought for the tax man. Another store writes out a paper sales receipt,  collects the money, and the transaction is done. Now your fiddling for receipts at the end of the year for the tax man. Advantage computerized feed store.

Southpark handled this brilliantly when a big named coffee house came in to town. The old coffee shop campaigned to keep the new guys out of town. Some locals started picketing and the city council created laws to keep them out. The old coffe shop did so well that they reinvested their profits into a bigger store, then more stores.  It wasnt long before they were the ones being picketed. Walmart was a game changer. They were the mom and pop, which became the big conglomerate because their vision worked.  Now they are the bad guys because they were successful.  But now they have a real threat with Amazon

If you let the govt make those decisions, you are acknowledging that the govt is of the people and for the people. While it sounds good, we (USA) are a 50/50 nation.  You have to trust that you will accept the decision regardless of which side of the political preferences you are on. And it will change in 4 to 8 years. Its an utter mess right now, so much that political peeps cant eat in a restaurant without a pop up riot taking place to chase them out. Even at the local level i see crazy happening. If govt decides who will succeed, i couldnt comprehend this. If it was decades ago, the internet may not be here for fear it would collapse the paper industry, or the postal system. Any assertion that the govt should control something is an assumption that they will do what you want, not the other 50% of the population.  Good luck with that.

NOT having a Walmart has actually been a big failure for my town. For years, my town has been trying desperately to keep out Walmart with rules and laws, and it has worked; they have not come in. Unfortunately the town has not thrived because of it.

When I bought a car from my local car dealership, he told me what was really happening. He said that most car dealerships have their best selling day on Saturday, but at that location, their best day was actually Monday. The reason is simple, during the weekend the residents do not stay in town, they go to the towns that DO have Walmart for their buying needs. So while the small shops like to make the claim that Walmart would drive them out of business, the truthis, the residents are leaving anyway. A trip there on a weekend proves it; the place is DEAD! Everyone leaves. The only reason the car dealership has a great Monday is because people do not find what they want outside of town, so they go back on Monday and shop. If Walmart was there, people would not leave and the car dealership, and other stores would actually do better!

Now another city not far from me; the city of Newport, they passed laws to keep out Walmart, and they too were successful, unfortunately the main part of town was on the outside of the city limits, so Walmart just bought vast acerage just over the line in Palmyra and opened a big Super-Walmart. The residents of Newport lost it all. Not only do they not get the taxes from the store, they get all the new traffic. In the meantime Palmyra is getting a ton of tax revenue as new businesses like Autozone, Family Dollar and others have sprung up across the line. In essence the City of Newport is shifting, but out of the city.

Now that was Walmart I was talking about, Home Depot and Lowes is a different story here...

For years they have tried to gain market share, but other then a few home owners doing Do It Yourself projects, they really have not penetrated the house building market at all. Hardly any professionals go there, but here is why. The local building supply companies all deliver for free, have estimators for free, and basically have service that cannot be competed with.

I once called my local building supplier, told them what I needed, changed my mind and called them back and hour later, and they said "we cannot swap that out, the truck is headed to your house now." If memory serves me right, they were backing in before I got off the phone. Because of the size of Home Depot or Lowes, just shopping inside the store takes longer than I can order it and have it at my house from my local dealer, and that says nothing about the 45 minute drive to the store, then another 45 minutes back home.

I remember another ime my skillsaw burned up and so I gave a call to my local building supply dealer and within the hour a new 8-1/4 worm drive saw showed up. So it is service like that which Home Depot and Lowes cannot even begin to compete with. I think I pent $15 more than Home Depot, but $5 would have been spent in gas, not to mention a 3 hour delay in building time. My personal time has value unto its own.

So it depends, but when people start throwing around accusations, I too get suspicious too. Not everything is a conspiracy.

As an outsider looking in, I see many strange patterns of behaviour in The USA.
Your system of government seems to have been taken over by interest groups, your electoral system is so open and manipulated it does not seem to have any security.
Voluntary voting IMO is the worst form of voting, if folks can't be bothered walking down and voting, then maybe they need to think about it.
In Australia turing up to vote is compulsory. You don't have to vote, just get your name marked off.
I read about people who complain about their rights being violated , being forced to vote!!!
I think non compulsory voting makes it easier to 'game' the situation.
Our electoral management is independent of government, public servants deal with it and its very hard to manipulate it.

Your anti monopoly laws are better than ours, but nobody seems to want to pay taxes.
It fact I have seen comments, that taxes to help the poor is theft??
What ever happened to Christian values.

Schools, police, fire service etc are all financed by the star, from state taxes.
As are public hospitals.This means everybody has a good chance of having the same quality service everywhere.

The issue of the working poor in your country is astounding, but it is creeping into Australia.

Overall I see all around the world, people unhappy about the way they are governed, and all seem to think the politicians forget what they are supposed to do, lead by example and govern.
Perhaps people just need to be more vocal and write more often to their representatives to force change.

Travis, i agree that the big box stores are not getting a bulk of the lumber packages, but they are getting the bulk of the fixtures (Plumbing and electric). It is probably by design.  50% + gross margin for fixtures vs 20% margin for framing lumber. Plus the extra cost of delivery and the constant loss from crooked lumber and returns. The local lumberyard, when talking about framing lumber  WILL be the sure thing for lumber. Opposite of my walmart/nutella example. Local guy will have 32' 2x6s for the rafters for your 12/12 pitch roof. Big box store won't.


A local plumbing supply house hates dealing with retail customers. The 10 minutes to sell a $1 fitting was a waste of time.  So much so that they charged that unsuspecting retailer $5 for the $1 part. They  talk about the idiot that couldnt comprehend that a 1/2" flair fitting wont fit a 1/2" compression fitting. Then one day a home depot comes to town and they wonder where all their profit went. It came from customers they didnt want. By the time they realized it, it was too late.

John C Daley wrote:As an outsider looking in, I see many strange patterns of behaviour in The USA.
Your system of government seems to have been taken over by interest groups, your electoral system is so open and manipulated it does not seem to have any security.
Voluntary voting IMO is the worst form of voting, if folks can't be bothered walking down and voting, then maybe they need to think about it.
In Australia turing up to vote is compulsory. You don't have to vote, just get your name marked off.
I read about people who complain about their rights being violated , being forced to vote!!!
I think non compulsory voting makes it easier to 'game' the situation.
Our electoral management is independent of government, public servants deal with it and its very hard to manipulate it.

Your anti monopoly laws are better than ours, but nobody seems to want to pay taxes.
It fact I have seen comments, that taxes to help the poor is theft??
What ever happened to Christian values.

Schools, police, fire service etc are all financed by the star, from state taxes.
As are public hospitals.This means everybody has a good chance of having the same quality service everywhere.

The issue of the working poor in your country is astounding, but it is creeping into Australia.

Overall I see all around the world, people unhappy about the way they are governed, and all seem to think the politicians forget what they are supposed to do, lead by example and govern.
Perhaps people just need to be more vocal and write more often to their representatives to force change.

Yes, pretty sad isn't it, but things are changing.

I disagree with mandatory voting, if people do not want to vote, that is their choice, but then they have no right to complain either in my opinion.

But here in Maine, the first state in the nation to do so, we have Ranked Choice Voting which means it is not an all-or-nothing system. I can vote for who I want to win the most, then my next preference, and right down the line. Collectively, the voters of the State of Maine decide who will win based entirely on popularity, not by percentages. There is a saying in Maine, "As Maine goes, so goes the nation." It is only a matter of time as other states adopt our new way of voting and intergrate it.

I love the ranked ballot idea. I hope more states adopt it.

Sure, it won't do anything about the meddling of foreign interests, corporations, or that bloody abortion of an electoral college system, but it at least makes strides in letting the people properly voice their opinion.

As to the weekend exodus problem, that is a common occurrence in small-town Ontario, should they not have their own big-box retailers; if you can't shop in town, you drive a couple of hours to the nearest small town that does. Incidentally, our towns are easily thirty to fifty thousand people, so small ones really aren't.

I do think the boom and bust model is accentuated with the phenomenon of big-box retailers taking advantage of population booms caused by resource development. They may stretch out the existence of what was once referred to as "company towns," or the model that succeeded that historical phenom, but as the bulk of the population goes, so goes the business, and eventually, what was slated to go out of business before does so just a little later.

I think it's a little more complicated than Walmart swooping in, low-balling competitors out of business, then raising prices as much as they can, but I think that the profit motive overriding any other considerations is a key factor in how this and many other system dynamics are broken.

-CK

In Australia we have 'preferential voting' which sounds just like your system as described.

I think it is far fairer than ' first past the post"

Back to mandatory voting, do you think those who do not vote and then start complaining remember they chose not to vote?

My view is very harsh, we get English people migrating here and complaining about the compulsory voting, I enjoy telling them to think about going home if they cannot even be bothered taking part in something many countries have fought over the right to have!