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by ineedasername
2488 days ago
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I'm not having any trouble distinguishing anything here. I understand the market allows for gradients in quality. But I'm arguing against the premise that started this thread. It was that a free market would result in the highest quality goods at the lowest price. The mere presence of cheap junk does itself undermine that argument. The free market isn't especially efficient if massive resources are used to produce short-lived items when they might instead be used to produce more durable ones. The incentives of the free market tend to align to choose near-term benefit whether or not it might result in long term harm, or simply greater cost. Anyway, your comments on the potential for a better system and market externalities show we're probably not too far away from each other on the general issue. Somehow we just ended up on opposite sides of this particular thread. There's not much of a better alternative on the table. I agree regulation shouldn't be the first course of action to any issue that might reasonably be solved by the market within a reasonable amount of time. What is "reasonable" being dependent on any particular issue's circumstances. (as examples, the market might be left to resolve issues of consumer inconvenience, but ones of public safety should get much closer scrutiny). The pendulum between the excesses of capitalism and those of regulation will swing back and forth, hopefully better approximating the ideal balance with each pass. And maybe at some point we'll be able to do better than this messy method. |
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I haven't made myself clear enough then: "The best" can still be awful, it's just better than whatever the next best alternative is, from a market perspective.
The market, at the end of the day, is people. If people reward short-lasting and cheap products over long-lasting and more expensive products, those are the "best products" in terms of adaptation to market demand.
They're never the best products in terms of resource usage or the environment or some other externality. That is unless that's what the market rewards, which it does to some degree, see "green advertising".
> The free market isn't especially efficient if massive resources are used to produce short-lived items when they might instead be used to produce more durable ones.
Nevertheless, market economies tend to be more efficient than non-market economies at allocating resources to where they are needed. This is because of local information advantage.
As I said, perhaps some future technology can be even more efficient at allocating resources than a market made out of people.
> But I'm arguing against the premise that started this thread. It was that a free market would result in the highest quality goods at the lowest price.
You didn't read that right. The OP started out by saying what companies should do: Produce the best products at the lowest prices. It's a prescription, not a prediction.
Of course what companies actually would like to do is sell the worst products at the highest prices. It's just that the market won't let them get away with it, unless they have really good sales and marketing, which is a big cost in and of itself.
In effect, the tendency with mass market products is to lower prices towards marginal cost and improve (or reduce) quality to acceptable levels, but not beyond. In the niches, for those people who really care and are ready to pay the price, there's still room for excellent products, maybe with a "lifetime warranty"