The left: not so wrong about price gouging

Economics Political Theory
1

while it is meaningless to speak of price gouging on a fully free market, the government can price-gouge for the services it offers, right? bureaucrats can eliminate all competition by force, then charge a hefty sum solely for the purpose of padding their take-home pay. we could call that price gouging and stay meaningful.

well then, since the hand of the government extends to every sector of the economy, where regulations favor current companies and keep competition lower than it would be on a fully free market, no existing company is a completely free-market organization. to some extent they are part of the government leviathan, and to that extent they have the capacity to price gouge. hell, they can even exploit workers, in the sense that those workers very likely would have had another better place to work if it weren’t for the government advantages bestowed on the existing companies.

this is the kind of subtle point that needlessly divides left and right, and although the left is surely much more careless on these items than ancaps are, there is still a hearty helping of sloppiness in the ancap approach.

the way to make a nuanced argument without compromising on your position is, simply, to be more accurate.

2

Where is this sloppiness on our part? The sloppiness is on the left’s part, who claim that price gouging can exist on a free market.

3

ZB who are you talking to specifically?

4

I don’t think Anarcho-Capitalists are arguing that the present economy is a truly free-market. If not, how are they sloppy?

5

the left is generally much sloppier, but anyone who claims that, say, comcast cannot price gouge is not stating things in a way that invites understanding.

this is addressed to anyone who defends companies categorically.

in the general case, people seem to see a bright line between government and private enterprise. any society that has a state has state privelege sown into all its entities to some degree. if we say that degree is zero, some sharp people of different mind will find fault. i think it is time to move to more nuanced arguments; not nuance for the sake of being nuanced—as some issues are surely black and white—but nuance when nuance is called for.

6

Who specifically did that?

7

Anglebert Humperdink my friend, you are correct. One of the many problems “us” leftists have with some of “you” rightists is our perception of some people’s want to defend any and all “private” enterprise.

(On a side note; price gouging can, and is inherent in a free market, imo. I can easily see myself [as a real entrepreneur who runs a real business] finding it in my interest to meet with my “competitiors” and try to establish a better deal for us all. And if I was really rich, and therefore powerful, I could use the apparatus of government to back my claim above all others . But, alas, this is all off topic)

8

lol

9

I couldn’t even muster a lol. If it’s not trolling, it’s really depressing. I hope it is trolling.

10

ibn Kalhoun, good sir, it’s Bingledack.

anyway, you seem to be calling a situation where there is a government a “free market”. i think what is generally meant here is a situation without a government. the mechanism you mentioned by which you could price gouge is certainly there…but only if there is a government to help you with that little cartel arrangement.

11

anyway, you seem to be calling a situation where there is a government a “free market”. i think what is generally meant here is a situation without a government. the mechanism you mentioned by which you could price gouge is certainly there…but only if there is a government to help you with that little cartel arrangement.

Even were the apparatus of government private (an cap), it would be no matter to use one’s wealth (and therefore power and influence) to skew it in your favor. First, I don’t need the government to collude w my competition. But if there is a government, I can use it to legitimize my cartel (this the two tr***s above would say is what unions do).

To the two of you; I said it, and I meant it. I will not buy into your “free markets are perfect” idealist hype. Markets historically have led to more statism, not less. The first supreme court judgement in the history of the US was a protection of one market actor against another, this is not a coincidence… imho.

12

Epicurus,

Even were the apparatus of government private (an cap), it would be no matter to use one’s wealth (and therefore power and influence) to skew it in your favor.

Yes, the seller prefers higher prices and the buyer prefers lower prices, but this doesn’t comment on how prices are actually formed on the market. Neither does it mention the barriers to this supposed “gouging” placed by competitive forces. In other words, it may behoove one of your “partner” firms in this supposed “cartel” that you speak of to lower prices and outsell you, because by doing so he maximizes his profits. In fact, this has been the theoretical and historical thorns that have beset market cartels, and one of the reasons which explains why no cartel has emerged on a competitive free market.

Markets historically have led to more statism, not less.

Care to offer reasoning? Or,at least, show the evidence?

13

  1. what do you make of the ancap argument that, absent government support and its regulations that raise the barrier for new competitors to enter, the temptation to cheat on the cartel agreement is too great for any cartels to last? not to mention that the prices fixed at a lofty level make a delicious profit opportunity for new competitors down the road?

  2. also seems to me that if your concern is wealthy people using their money to leverage things to their favor, your concern ought to center on THE LEVER itself: the state. as again on this forum “free market” seems synonymous with “stateless society”, in a free market there is no state, hence no lever. a rich guy will certainly have more sway than a bum, and that is scarcely avoidable, but the point is both that such sway is minimized on a free market (read: without a state) AND that there is nothing to sway on a free market except the individual actors themselves—and it takes a bit of real-world experience to realize this but the fact is it is just not efficient to do that.

14

Yes, the seller prefers higher prices and the buyer prefers lower prices, but this doesn’t comment on how prices are actually formed on the market. Neither does it mention the barriers to this supposed “gouging” placed by competitive forces. In other words, it may behoove one of your “partner” firms in this supposed “cartel” that you speak of to lower prices and outsell you, because by doing so he maximizes his profits. In fact, this has been the theoretical and historical thorns that have beset market cartels, and one of the reasons which explains why no cartel has emerged on a competitive free market.

First you would have to show me where this “free market” has ever existed. If (since) you can’t do that, you would at least have to show that a free market would be possible. It is my opinion that it cannot.

One of my competitiors may, and probably eventually will break the deal. THere is no honor amongst capitalists (there cannot be, if you’ve ever had to exploit markets that should be obvious). But a little price gouging here, is someone losing their house their, and someone else losing their job yet over somewhere else. That is not to say governments would not do the same thing. Just that the problems of government are not governments, they are people.

Care to offer reasoning? Or,at least, show the evidence?

I did, on both accounts.

15

note also, again, your term “exploit” could reasonably apply when a government is in there limiting the choices, but not otherwise. a government-coddled corporation can exploit workers in the sense that they can offer them very low wages while at the same time using the government to keep out competitors who would have otherwise been bidding up wages.

i suppose to be very very precise you could say that any company that gets too big, even in ancap, could start to exploit and gouge…but part of the theory is that companies would not get big without government to help them, so you may want to consider the possibility that that is a moot concern.

16

Epicurus,

First you would have to show me where this “free market” has ever existed. If (since) you can’t do that, you would at least have to show that a free market would be possible. It is my opinion that it cannot.

What bearing does this have on the present theoretical discussion? We are talking about prices in the free market, nothing else. We have already established that firms can fix prices “artificially high” through state-granted monopolies. That was never in question.

One of my competitiors may, and probably eventually will break the deal. THere is no honor amongst capitalists (there cannot be, if you’ve ever had to exploit markets that should be obvious). But a little price gouging here, is someone losing their house their, and someone else losing their job yet over somewhere else.

I’m sorry, but I can’t make sense out of any of this. I didn’t know that catering to the consumer and offering the best price is “exploitation”. It must be a product of your extremely confused understanding of catallactics. In regards to the last sentence, I am not sure about what you are trying to say. What does people losing home and their jobs have to do with price gouging?

I did, on both accounts.

No, you made an assertion. There was absolutely no evidence. To say that the first supreme court case was a regulation of a market actor says absolutely nothing about the circumstances which said case revolved around. There were plenty of antitrust cases throughout the history of the United States; none of them had anything to do with actual monopolies.

17

1. what do you make of the ancap argument that, absent government support and its regulations that raise the barrier for new competitors to enter, the temptation to cheat on the cartel agreement is too great for any cartels to last? not to mention that the prices fixed at a lofty level make a delicious profit opportunity for new competitors down the road?

Too many maybe’s. Hopeless idealism. It would happen here and there, and more often in luxury markets than in necessity markets. But generally, businessmen cannot take ethics into account (only insofar as they can add profits), and if it proves more profitable to collude, they will. (Even a short collusion can mean widespread desperation)

2. also seems to me that if your concern is wealthy people using their money to leverage things to their favor, your concern ought to center on THE LEVER itself: the state. as again on this forum “free market” seems synonymous with “stateless society”, in a free market there is no state, hence no lever.

Elites did not need the modern state in ancient times to leverage against the population. The lever is the apparatus(es) of power amongst human social operations. The trading of daughters for marriage is one of the oldest institutions known. A little trade here, a little exploitation there.

a rich guy will certainly have more sway than a bum, and that is scarcely avoidable, but the point is both that such sway is minimized …(read: without a state)

ok. i agree so far

AND that there is nothing to sway on a free market except the individual actors themselves—and it takes a bit of real-world experience to realize this but the fact is it is just not efficient to do that.

The Scorpion King would disagree. Give elite’s enough power and they will just buy the police.

18

note also, again, your term “exploit” could reasonably apply when a government is in there limiting the choices

It can, and does.

, but not otherwise. a government-coddled corporation can exploit workers in the sense that they can offer them very low wages while at the same time using the government to keep out competitors who would have otherwise been bidding up wages.

There will still be police and courts to be bought. Now we’re moving into the realm of anti-statism, or anti-government in general. But if you get rid of the police, who will protect your property?

i suppose to be very very precise you could say that any company that gets too big, even in ancap, could start to exploit and gouge…but part of the theory is that companies would not get big without government to help them, so you may want to consider the possibility that that is a moot concern.

What evidence is this “theory” based on? You’re right that “companies” don’t get exploitive without “government” help. But only insofar as how you define the terms. What is the difference between a company, and a cartel; between a government and a state? Imo, it’s just a matter of degree.

What bearing does this have on the present theoretical discussion? We are talking about prices in the free market, nothing else. We have already established that firms can fix prices “artificially high” through state-granted monopolies. That was never in question.

What discussion could there be had if this thing could never exist? It is my opinion that the “free” market is nothing more than an ideal. It’s all in how one defines their terms. My follow up question still stands in an ancap society.

I’m sorry, but I can’t make sense out of any of this. I didn’t know that catering to the consumer and offering the best price is “exploitation”. It must be a product of your extremely confused understanding of catallactics. In regards to the last sentence, I am not sure about what you are trying to say. You are right. The largest confusion comes from a difference in the definition of terms. Exploit; as in, to take advantage of. I use it in this sense, to varying degrees, everytime I use it.

“Catering to the consuer and offering the best price (sic)” is a means to an end; profit. Once again, if you’ve ever had to exploit a market, you should know this. Your business doesn’t grow if you don’t profit, and you don’t attract more investors if you don’t grow. I will refer you back to my links (https://forum.freecapitalists.org/t/i-love-the-state-post-office/16545 ) on what the “best” price means in real capitalism.

What does people losing home and their jobs have to do with price gouging?

A consumer gets gouged, sure it may be his ignorant fault. But now he defaults on his mortgage.

A cartel gouges out the competition, a worker loses her home. She defaults on her mortgage.

To say that the first supreme court case was a regulation of a market actor says absolutely nothing about the circumstances which said case revolved around. There were plenty of antitrust cases throughout the history of the United States; none of them had anything to do with actual monopolies.

It’s all in how you define your terms. One should start with the “free market.”

19

Chiseling.

20

Epicurus,

What discussion could there be had if this thing could never exist? It is my opinion that the “free” market is nothing more than an ideal. It’s all in how one defines their terms. My follow up question still stands in an ancap society.

You are utterly failing to get the point. We are talking about whether there is a theoretical tendency towards an unrestricted rise in prices, at the expense of the consumer, in the market. That is, a catallactic relationship, not an institutional relationship. By arguing that there has never been a free market you have disingeniously shifted the goal posts, but unfortunately for you the people you are debating are not ignorant or dull.

“Catering to the consuer and offering the best price (sic)” is a means to an end; profit.

How is making a profit exploitation? When the primitive man fashioned a tool and sold it to a fellow man for profit (on this, see Reisman’s “primacy of profits” principle that totally debunks the Marxist “primacy of wages” doctrine), did he exploit that man? No, both men gained from the exchange.

Once again, if you’ve ever had to exploit a market, you should know this.

Running a business does not make you an economist, so please stop appealing to your false authority.

A consumer gets gouged, sure it may be his ignorant fault. But now he defaults on his mortgage.

Please, show me where the gouging took effect. Our current problems are more complex than supposed “gouging”.

A cartel gouges out the competition, a worker loses her home. She defaults on her mortgage.

I don’t see a connection. Stringing random concepts doesn’t make a valid point.

It’s all in how you define your terms. One should start with the “free market.”

Please, stop trying to change the subject.