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What do you think of Internet outrage of companies raising their prices, chiefly companies like Netflix and fast food restaurants? I think morally, it seems pretty iffy- it's a free market, and if they raise their prices, you can just stop buying what they offer. If the government got involved to set any sort of price ceiling, I think that'd definitely be a bad idea that'd lead to a shortage of some sort.
But if the outrage lets customers act as a pseudo-monopsony which gives them more power, I also don't really mind if they're able to use it to demand cheaper prices, even if I think the accusations of corporations being evil are vastly overblown. Especially when it comes to keeping the price of something like Netflix low, where much of their value comes from having exclusive rights to stream old shows and movies instead of all revenue to them going towards making new stuff or improving technology. If consumer outrage keeps the Netflix price $5 cheaper than it otherwise would be, is anything hurt besides shareholder bank accounts?
Large companies have zero incentive to reduce prices when they know that their competitor will do the same. McDonald’s has actually sued 12 of the major national meat suppliers for price-fixing simply based on the fact that each supplier knew the others’ pricing due to a shared analytic tool. All it takes is one reasonably intelligent analyst at the meat supplier board room to ask “so what happens if we lower our prices” for all to realize it’s an unprofitable move.
https://www.fooddive.com/news/mcdonalds-sues-meat-companies-pork-price-fixing/637572/
https://www.atg.wa.gov/news/news-releases/ag-ferguson-s-price-fixing-lawsuit-nets-105-million-washingtonians-tyson-foods
https://www.agriculturedive.com/news/agri-stats-sued-by-DOJ-for-role-in-meatpacking-antitrust-scheme/695196/
If you are McDonald’s and there’s a Wendy’s across the street, you have two options. You can both keep your prices high and split the pool of consumers 50/50, knowing that stressed American consumers will continue to buy your slop because it is time-efficient and they have formed a habit to your addictive slop. Or you can lower your prices, which the competitor will do next week, which leaves you back to the first option only with less profit. Of course they don’t do this. But if a brand new competitor moves in who doesn’t play ball, perhaps they will do this to squeeze him out — no new competitor can compete with the supply chain and the institutional knowledge of McDonald’s.
It’s an entrenched mythology of capitalism that companies lower prices based on competition. This hardly ever works in the real world. There’s no reason, for instance, for OnlyFans to rake in billions of dollars when anyone can create a similar site. But OnlyFans isn’t profitable because their service is better, but because the pornographer who operated it made the site a meme among the public (a kind of psychological rentseeking), because he had the previous institutional knowledge and capital to do this. And you see with car dealerships, there’s no reason for any used car dealership owner to make tens of millions. But in an intensive competition what they do is compete over psychologically manipulating the vulnerable, so the car dealerships compete over misleading pricing plans, overpriced itemization that the customer doesn’t have the knowledge to dispute, etc. It is horrifically inefficient and immoral as a system and it is only maintained due to various mythologies in the public imagination.
So I take it you're a socialist or communist of some sort?
What do you think it is that stops McDonald's from charging $10 for a bottle of water?
They can’t charge an amount that is so noticeably higher that you remember it and buy a pack of water for 1/20th of the price at a store. But they can (and do) overcharge on water, understanding that they can get away with it because it’s an inconvenience for you to get it elsewhere. That’s extremely economically inefficient, because McDonald’s surplus profit goes disproportionately to already-wealthy individuals. (It’s better for a nation to have more people with more money, versus some with extraneous wealth that doesn’t provide any benefit in terms of happiness or entrepreneurship or invention or culture.)
It would be more efficient if, for super-sized corporations, an agency stepped in and “auctioned” off the corporate positions and ownership according to who will do the job for the least amount of money, then pass the saved money to consumers. If that’s too much government interference, then allow the employees to form powerful unions, because the employees are more likely to identify with the interests of the consumer and stand to gain less as individuals from purposeful economic inefficiency.
There are a lot of problems with communism. People should be paid up to 10x more than median wages for performance, because humans have an instinct to be rewarded according to performance, that’s deeply evolutionary. Humans also have an instinct to care for things they own, and you see this in small businesses and entrepreneurship. The answer is a balance that accepts the importance of human instinct while also realizing that primitive capitalism can get harmful, antisocial and inefficient. For large corporations, no one should feel like they “own” it, and these trend toward pseudo-monopolies due to institutional knowledge accumulation and established supply chains. For a problem like used car dealerships, we should have some kind of Honesty Regulation akin to Cicero’s grain merchant at Rhodes thought experiments. The policy should make it so that even a very dumb person can immediately tell that something isn’t in his economic best interest.
Most fast food restaurants will give you a cup for water for free.
This is just wishful thinking. Look no further than dockworkers fighting tooth and nail against automation that would increase port throughput because there'd be less demand for their labor.
Dockworkers rightfully fight automation because they know that there are not other jobs for them with high pay as many other jobs lack unions; the “efficiency” goes to just a few at top. This is different from a scenario where unions are the norm across industries — suddenly the benefit of being a dockworker would not so large as to prevent them going through with automation. But even if for some reason dockworkers maintain a disproportionately high salary, we can imagine a system where the union of one industry negotiates (and can be overruled) by a broader “related-industry” or “affected industry” greater union body. There are many ways to incentivize efficient economic decisions which involve unions and cross-union negotiation.
This just evades the point, try again but for soda
He "evades" the point by offering directly contradicting evidence to your assertion? And then you literally move the goalposts by shifting the object from water to the substance that is single most responsible for the American pre-diabetic and diabetes epidemic.
This isn't just poor argumentation, it's a lack of understanding of the nature of consumer demand and vendor supply.
McDonald's continues to exist and generate profit because American (and foreign!) consumers really enjoy, and therefore demand, their product. Every time I hear someone go on about "the corporate overlords" I get a strong suspicion they've never worked in one of these large corporations. They're bureaucratic, slow, with pockets of poor management everywhere. Often, they're coasting on brand recognition and incumbent advantage. Sure, they may still have top line growth, but they're not innovating outside of buying potential challengers (see: McDonalds and Chipotle). The idea that there are these Gordon Gekko greed machines with incredible ability to manipulate the public is laughable. The lizard people don't exist.
The sad fact of the matter is that McDonald's CEO is a former soap salesman who did the handshakeful path of Harvard Biz School to Big Consulting. This is the kind of dude who looks forward to "networking with the family" for 45 minutes of Christmas Eve before diving back in to the sweet sweet womb of quarterly reports. He is a business nerd.
But you know who aren't business nerds? Construction workers getting their morning coffee, single moms too tired to cook, stoned teenagers, and (years ago) my drunk ass at 2 a.m. And we all like the convenience, predictability, and location density of McDonalds. And so we spend, together, billions of dollars on their product.
An auction. Yes. Like, perhaps, at a market. Like where people would buy and sell assets they own - their "stock" you could say. A kind of "stock market" if you will.
So we solve government interference by creating organizations that are intrinsically tied to the government.
What does this even mean?
Tell some undefined "truth" or you're committing a crime? George Orwell would like to see you in the hall.
This is just outlandish and I'm beginning to think I'm being trolled.
How is it possible that you don’t understand that it evades the point? That’s shocking, because it’s a very clear case of arguing against the substance — which should never be done because it wastes time (hence my terse reply, and now I have to waste time clarifying something so simple). It’s not just bad argumentation, it’s damaging to the whole discussion because of that.
We are talking about the overcharging of goods with water as an example. The one example is not the substance of the argument.
If someone wants a bottle of water they should be purchasing it at a reasonable price. Tap water has nothing to do with the claim. It’s not always possible to drive with an open cup of water in your car, depending on cupholders and road conditions
If some locations allow free cups of water, what does this have to do with the locations which do not? Even if points 1 and 2 don’t apply, the simple fact that there are locations which do not give free water makes this whole argument a wasteful tangent. See here, here, here
it’s crucial to understand the difference between substance and trivial details
Are you trolling?
I will read the rest of your post if you can confirm that you’ve understood why you are incorrect per the above
I'm far too dumb to do that.
Is this why my pants are wet?
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