Fixing the market

[plakboek]

A colleague who works for another government department remarked to me that he saw nothing wrong with cartels, monopolies or even a monocultural market operating free of any government regulation. At the time, I harboured some deep reservations about what could go seriously wrong if we restrict a free market with little real competition or choice.

Fortunately, one of my Livejournal contacts just posted a link to this page about market share that nicely lists my concerns:

1. When companies only care about being cheap and efficient, buyers end up with a dreary monoculture and are cheated with poor quality, while artisans and workers are exploited. Example: Wal-Mart.
2. When companies interfere with a market by fixing prices or negotiating cartel pacts, consumers are overcharged and get a poor selection, while artisans and workers are exploited. Example: the RIAA Labels.
3. When companies monopolize a market and prevent any natural competition from occurring, prices stay high, innovation lags, and the threat of government regulation looms. Example: Microsoft.
4. When governments interfere with markets and try to set prices artificially, it commonly results in just the opposite of what was intended: production stagnates and prices inch up anyway. Example: The 70s.

(Market Share vs Installed Base: iPod vs Zune, Mac vs PC)

Hmmm ...