My Beautiful Wickedness

What say?
June 28, 2007, 11:14 am
Filed under: Uncategorized

Arrrrrrr! This the the goddamn limit!

According to the fuckwits on our Supreme Court,it’s ok to collude on price floors as long as it increases competition. Because, you know, true conservatives are all about the free market — removing regulations to allow business the freedom to fuck consumers freely.

So long, FTC. Buh-bye, SEC. (I have friends working in the FTC and they report — though strictly off the record — that they are already so discouraged and impeded from investigating anti-trust issues that they’ve been doing a lot of their own research and writing just to stay busy.)

I know I have economists out there among the readership. Justice Kennedy insists that there’s a literature out there that argues that price floors are a good thing. Who is writing these works? What is their theoretical framework and what’s their evidence? In what industry and under what conditions would this make sense? What’s the counter-argument?


4 Comments so far
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I’m not an economist, but my guess is that he is citing some of the new school arguments about monopoly. The idea there is that as long as there is ANY choice in the market, consumers are free to engage in “price-finding” behavior and business is restricted in its ability to engage in “price-fixing” by the functioning of the market (blessed be its holy clearance). Therefore the only time government needs to take any action on this sort of thing at all is if there is literally only one provider of something – and that will never happen because an unregulated market will call competitors into being “as if by an invisible hand.”

My counter argument would be that whatever the math, markets are human institutions and the ability to dominate them ties in with things like perception and belief. Monopoly is not a binary thing; yes or no, on or off. It is a continuum. Government has a public interest to serve in restricting this sort of thing.

Ultimately, though, I don’t think this has anything to do with economic theory, it is about political economy. The Bush majority have sided with this almost religious faith the neo-cons have in the beneficial effects of free markets. They believe any outcome created by a “free” market (read “unregulated”) is inherently superior to any outcome from a regulated one. All of these Anti-Trust decisions are of a piece – government regulation of market interactions is bad and should only happen when there is a blatantly clear public interest in doing so – and in reality the public interest is always best served by unregulated markets.

I think you can equate how these guys think about the free market to how Medieval Scholastics used Aristotelian logic to explore the nature of God. There was never any uncertainty about God’s existence or the basic tenants of the Church – logic served as a way to explore truths that were already known. These guys use economic theory the same way – to prove what they already know, that the Market is Good.

Comment by Gerald

You might remember one of our former grad school colleagues arguing that just because other investors could theoretically enter into meatpacking given sufficient appetites for risk, there was no reason to think that IBP’s absolute domination of the industry and its undue influence over the USDA was problematic.

I thought that was a doofus idea then and I think it’s a doofus idea now.

Comment by bridgett

Wasn’t this the same gentleman who argued that the existence of large-scale patterns of migrant labor in Africa indicated an efficient labor market?

Doofus, indeed.

Well, I’m off to hire a new history instructor for our little Harvard-near-the-Yadkin.

Comment by Gerald

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