thank you, price 'gougers'

[tylerdurden]

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Not producing enough product to meet supply while promoting an artificially low price point in order to drive demand way up. It's obvious consumer psychology. I don't have any problems with the practice (other than I wish I had my Xbox360 now). I certainly don't think there should be any regulation of the practice. But they are doing it.

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OK, I guess we're basically in agreement. Sure, they're setting conditions on their trade. There's really nothing wrong with this.

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Actually, I don't think that wholesalers should be able to control retail channel pricing. That does get in the way of a functioning free market. I believe that at some level this is actually illegal but that they get around it by offering promotions and incentives that are unavailable to retailers who sell below the MSRP. For example, it's legal to sell xbox at a premium on ebay, even though MSFT could cut the balls off a Best Buy for selling it a different price. I think that gives MSFT too much power.

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They're not going to "cut the balls off" anyone, but they might decline to distribute product to best buy in the future. What's wrong with that?

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My only point is that it's irrational to believe that markets operate free of intervention or manipulation by producers. In many if not most cases, that manipulation does not cause significant harm to warrant any government intervention, but in some cases it does.

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I have no concern over "intervention or manipulation by producers", as this is so vague that it could include ever transaction ever conducted. Any time a producer asks a price that someone else might like to see lowered, the producer is in a way manipulating the market. The thing is that the producer has a *right* to this manipulation, since he owns the resource.

Government intervention, on the other hand, is unjust because the government has no legitimate right to the property in the transaction. In fact, we can show that government can never have a legitimate right to *any* property, but that's another ball of wax.

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But if you look at what some drug manufacturers, or insurance providers, or gas producers are doing, you have to wonder if they cross the line that Porsche and MSFT stay on the right side of.

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Most of the abuses you're alluding to are specifically enabled by government coercion, not in spite of it.

[tylerdurden]

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http://blogs.mercurynews.com/aei/200..._sales__1.html

As you can see from this article, MSFT is losing about $153 per Xbox360. Why? Because they are creating a market for their video games. Just an example that companies will manipulate markets for their benefit. I'm not saying that the practice should be stopped or regulated. But pretending it doesn't occur is silly.

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Sounds like consumers are benefitting, too.

[tylerdurden]

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These are not coercive forces, these are the forces that make it easy to do business in America. Try negotiating the biz world in Africa and Asia where the rules change all the time and you will realize that anarcho-capitalism (that is really what you get in a corrupt society) does not work.

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This is an extremely pathetic strawman arguement. Tinpot dictatorships that primarily seek to enrich the dictator at the expense of the populace (what you find in many locations in Africa) are not AC systems.

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Good business people want a consistent and predicatble set of rules (and yes we want the rules as we dont want to agree to ALL the rules ALL the time).

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There's no reason that standardized rules would be prohibited in anarcho-capitalism. In fact, the number one rule you seem to value (strong respect for property rights) is more valued in anarcho-capitalism than in US law.

[natedogg]

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My point was that our economy is structured quite differently than was that of the classical civilizations. I think one could make an argument that not having price controls, or other political "interference" in the "free" market could lead to death.

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Can anyone please explain to me how the size of the organization that is doing the selling can affect the laws of economics so that price controls are now viable? Any examples? I'd really like to hear this.

Bear in mind that I do agree multinational corporations present a problem to the free markets but ONLY BECAUSE governments have intefered in their favor.

natedogg

[wacki]

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Any examples?

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De beers did a wonderful job making a somewhat common rock a prized possesion.

There are also plenty of occurances of predatory pricing in the past.

More later....

[tylerdurden]

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Any examples?

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De beers did a wonderful job making a somewhat common rock a prized possesion.

There are also plenty of occurances of predatory pricing in the past.

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Did they put a gun to anyone's head and make them buy a diamond? Good marketing is "predatory pricing"???

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More later....

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I can't wait.

[mosta]

the only natural law is that if I can bash your skull in I'll take all your ice creams and your bananas. (but we know that while hobbes was the only consistent utilitarian theorist, it is not of empirical value (even though economists still can't and won't ever be able to get beyond that).)

but that's not to suggest I'm in favor of price controls!

[wacki]

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Did they put a gun to anyone's head and make them buy a diamond?

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He wanted an example where a company, thanks to its size and power, can artificially push the price higher than it should be. I gave him one.


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Good marketing is "predatory pricing"???

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The key word in that sentence was "also".

[tylerdurden]

I fired off a quick response last night after coming back from a party where I had a few too many. [img]/images/graemlins/smile.gif[/img]

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Did they put a gun to anyone's head and make them buy a diamond?

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He wanted an example where a company, thanks to its size and power, can artificially push the price higher than it should be. I gave him one.

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Wait, what "should" the price be? Even though they control the supply, their prices are still subject to demand pressures. Prices might be lower if the supply were not controlled by one supplier, but that doesn't by itself prove any unjust action by debeers.

The real key to the question is *how* did they obtain their cartel position - how much governmental power did they leverage to get there? The answer is "a lot."

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The key word in that sentence was "also".

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Yeah, I saw that this morning.

[MMMMMM]

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Did they put a gun to anyone's head and make them buy a diamond?

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He wanted an example where a company, thanks to its size and power, can artificially push the price higher than it should be. I gave him one.

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I'm not so sure, Wacki. The diamond market has fluctuated enormously over the years. Granted, DeBeers, as the biggest player, wields some serious clout and can futz around with the prices and supply, creating short-term or perhaps even medium-term anomalies--but doesn't it all tend towards equilibrium after a while (just like all markets)?

Let's pretend, just for a moment, that DeBeers (or equivalent) had never existed. Would the price of diamonds likely be higher, or lower, than it now is?