this post was submitted on 20 Jul 2023
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Just chiming in to say that if organizations price fix, it's pretty rare a 3rd party can sustainably undercut them. The price fixers can agree to drop prices way lower, sell at a loss until the 3rd party is forced to price fix too or go out of business, and then resume the fixed price
So the outcome from a customer's perspective is that the price fixers have dropped their prices way lower? That's good, no?
And then once the 3rd party goes out of business and they resume their high price.... they're encouraging a new 3rd party to try again. So the prices lower again.
Meaning there's pressure on prices to be lower, which is what we want. Therefore, good system.
Of course, I'm not saying it's ideal. But is there a better system?
Why would 3rd party #2 even try if they just saw 3rd party #1 just get stomped in that way? Why would you start a business, a very expensive endeavour (monetarily, mentally, and temporally), if you knew how and why it would get driven out of business pretty quickly? In the scenario you describe, the pressure is for prices to be higher on average, with dips here and there.
What you’re talking about is a tendency towards monopoly.
The most efficient way to organize industrial capacity is in large centralized productive systems, because it gets the per unit cost low. These ‘economies of scale’ are the best way to offer the lowest prices to the consumer for industrial goods by far.
The problem arises because this creates a centralized power structure. We call the people who control this power structure capitalists. The capitalists use this structure to force unfair labor contracts on their workforce.
The ‘better solution’ is democratic oversight over the centralized productive apparatus. Which can be in the form of regulations from democratic institutions on the centralized productive apparatus; or just as well workers collectively owning the company they work for.
Matt Bruenig has a some really informative videos on how that might look.
https://youtu.be/MmeIGcI60oc
Here is an alternative Piped link(s): https://piped.video/MmeIGcI60oc
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I'm open-source, check me out at GitHub.
For most purchases, people really only have vanishingly few choices of companies to buy from. A truly free market might work, but the profit motives that have corrupted our political, legal and regulatory systems has made most markets into oligopolies. These companies work together to manipulate prices, without ever directly communicating in a way that can be punished.
For a free market to really drive prices down there needs to be real competition. When eggs went up in price, they allegedly did so because of avian flu. But that flu only affected a small amount of the production. Cal-Maine, the largest egg producer in the country, lost no egg production at all. Yet they increased their prices massively. If the market was working as you say it does, Cal-Maine would have kept their prices low to capture more market share. Instead they saw that other producer might have to raise prices and preemptively raised their prices.
Purchases such as...? Because basically all the things I purchase I have pretty solid options for, especially when you consider that a lot of good are interchangeable with each other.
small number of mega corps owns nearly all brands.
https://i.imgur.com/j6zvm7S.jpeg
This pic is old btw they ve moved on. It doesnt show all the brands they own.