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Wallstreetatheist
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9/14/2012 9:01:49 AM
Posted: 4 years ago
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises
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jat93
Posts: 1,440
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9/14/2012 1:22:03 PM
Posted: 4 years ago
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

I generally agree, but lately I've been wondering, what if big business simply brainwashes the customers via advertisements and messages on tv, internet, radio, signs etc... Big business can screw with the free market by convincing people to make irrational choices, or choices that they wouldn't necessarily make without the ads and the subliminal messages or whatever methods big business would use to get people to buy their products.

Essentially my point is, big business can counteract the natural free market by creating a consumer who will not necessarily be acting in their own rational self interest. If this is true, (and if it isn't, why not?) doesn't that kind of spell a problem for the free market?

I'm not making the case for government intervention, because even if the consumer was probably making irrational choices there's no reason to think government workers would magically have all the knowledge/solutions that elude most of the individuals in society. Still, when I think of how many billions of dollars a year big corporations spend making sure that the consumer is brainwashed and that they buy products not necessarily for the right reasons, I become skeptical of the free market, and then I'm kind of in a dilemma because I don't see the market as inherently amazing given the power of big business, but I don't see any better alternative...
darkkermit
Posts: 11,204
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9/14/2012 1:24:42 PM
Posted: 4 years ago
At 9/14/2012 1:22:03 PM, jat93 wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

I generally agree, but lately I've been wondering, what if big business simply brainwashes the customers via advertisements and messages on tv, internet, radio, signs etc... Big business can screw with the free market by convincing people to make irrational choices, or choices that they wouldn't necessarily make without the ads and the subliminal messages or whatever methods big business would use to get people to buy their products.

Essentially my point is, big business can counteract the natural free market by creating a consumer who will not necessarily be acting in their own rational self interest. If this is true, (and if it isn't, why not?) doesn't that kind of spell a problem for the free market?

I'm not making the case for government intervention, because even if the consumer was probably making irrational choices there's no reason to think government workers would magically have all the knowledge/solutions that elude most of the individuals in society. Still, when I think of how many billions of dollars a year big corporations spend making sure that the consumer is brainwashed and that they buy products not necessarily for the right reasons, I become skeptical of the free market, and then I'm kind of in a dilemma because I don't see the market as inherently amazing given the power of big business, but I don't see any better alternative...

I actually agree with this. Humans surprisingly don't act to fulfill long-term happiness.
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socialpinko
Posts: 10,458
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9/14/2012 1:32:05 PM
Posted: 4 years ago
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:

"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

......that and intellectual property enforcement, externalization of transportation costs, regulatory measures (like licensing requirements, quality standards, etc.) that take quality out as an object of competition and add higher overheads to non-established market actors, etc. etc. Do you really think Apple, Microsoft, Johnson and Johnson, the majority of large banks, the majority of large auto manufacturers, etc. etc. got to their size solely owing to satisfaction of consumer demand? Big businesses as we see them today would seem not to be sustainable in a free market.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
:
: I disagree.
jat93
Posts: 1,440
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9/14/2012 1:37:16 PM
Posted: 4 years ago
At 9/14/2012 1:24:42 PM, darkkermit wrote:
At 9/14/2012 1:22:03 PM, jat93 wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

I generally agree, but lately I've been wondering, what if big business simply brainwashes the customers via advertisements and messages on tv, internet, radio, signs etc... Big business can screw with the free market by convincing people to make irrational choices, or choices that they wouldn't necessarily make without the ads and the subliminal messages or whatever methods big business would use to get people to buy their products.

Essentially my point is, big business can counteract the natural free market by creating a consumer who will not necessarily be acting in their own rational self interest. If this is true, (and if it isn't, why not?) doesn't that kind of spell a problem for the free market?

I'm not making the case for government intervention, because even if the consumer was probably making irrational choices there's no reason to think government workers would magically have all the knowledge/solutions that elude most of the individuals in society. Still, when I think of how many billions of dollars a year big corporations spend making sure that the consumer is brainwashed and that they buy products not necessarily for the right reasons, I become skeptical of the free market, and then I'm kind of in a dilemma because I don't see the market as inherently amazing given the power of big business, but I don't see any better alternative...

I actually agree with this. Humans surprisingly don't act to fulfill long-term happiness.

I mean forgetting about how humans would do/act naturally, there's the fact that big business by its very nature tries to counteract the free market via brainwashing or advertising or whatever you want to call it, and thus create an irrational consumer.

My big question is, if this is a problem evident in an unregulated free market, what's the solution? I can think of no way to solve this without invoking government or some regulator, and I can think of no reason why if this is a problem evident in humanity, government/regulators would somehow be better. The only way to really solve that problem would be to somehow guarantee a more rational consumer, but I'm not sure how that could happen.
darkkermit
Posts: 11,204
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9/14/2012 1:42:18 PM
Posted: 4 years ago
At 9/14/2012 1:32:05 PM, socialpinko wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:

"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

......that and intellectual property enforcement, externalization of transportation costs, regulatory measures (like licensing requirements, quality standards, etc.) that take quality out as an object of competition and add higher overheads to non-established market actors, etc. etc. Do you really think Apple, Microsoft, Johnson and Johnson, the majority of large banks, the majority of large auto manufacturers, etc. etc. got to their size solely owing to satisfaction of consumer demand? Big businesses as we see them today would seem not to be sustainable in a free market.

What about facebook? There's no way that "government intervention" caused facebook to become so big. This is because it gained through the network effect. In other words, because more people are using facebook, the more people that use it, the more valuable it become. A site like facebook can be so large because of market forces, and not government.
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socialpinko
Posts: 10,458
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9/14/2012 1:45:46 PM
Posted: 4 years ago
At 9/14/2012 1:42:18 PM, darkkermit wrote:
At 9/14/2012 1:32:05 PM, socialpinko wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:

"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

......that and intellectual property enforcement, externalization of transportation costs, regulatory measures (like licensing requirements, quality standards, etc.) that take quality out as an object of competition and add higher overheads to non-established market actors, etc. etc. Do you really think Apple, Microsoft, Johnson and Johnson, the majority of large banks, the majority of large auto manufacturers, etc. etc. got to their size solely owing to satisfaction of consumer demand? Big businesses as we see them today would seem not to be sustainable in a free market.

What about facebook? There's no way that "government intervention" caused facebook to become so big. This is because it gained through the network effect. In other words, because more people are using facebook, the more people that use it, the more valuable it become. A site like facebook can be so large because of market forces, and not government.

I guess my point was more about traditional type goods and services. The Internet allows for a huge amount of decentralized management and overhead seems to be a lot lower for purely Internet ventures as opposed to manufacturing.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
:
: I disagree.
darkkermit
Posts: 11,204
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9/14/2012 1:45:49 PM
Posted: 4 years ago
At 9/14/2012 1:37:16 PM, jat93 wrote:
At 9/14/2012 1:24:42 PM, darkkermit wrote:
At 9/14/2012 1:22:03 PM, jat93 wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

I generally agree, but lately I've been wondering, what if big business simply brainwashes the customers via advertisements and messages on tv, internet, radio, signs etc... Big business can screw with the free market by convincing people to make irrational choices, or choices that they wouldn't necessarily make without the ads and the subliminal messages or whatever methods big business would use to get people to buy their products.

Essentially my point is, big business can counteract the natural free market by creating a consumer who will not necessarily be acting in their own rational self interest. If this is true, (and if it isn't, why not?) doesn't that kind of spell a problem for the free market?

I'm not making the case for government intervention, because even if the consumer was probably making irrational choices there's no reason to think government workers would magically have all the knowledge/solutions that elude most of the individuals in society. Still, when I think of how many billions of dollars a year big corporations spend making sure that the consumer is brainwashed and that they buy products not necessarily for the right reasons, I become skeptical of the free market, and then I'm kind of in a dilemma because I don't see the market as inherently amazing given the power of big business, but I don't see any better alternative...

I actually agree with this. Humans surprisingly don't act to fulfill long-term happiness.

I mean forgetting about how humans would do/act naturally, there's the fact that big business by its very nature tries to counteract the free market via brainwashing or advertising or whatever you want to call it, and thus create an irrational consumer.

Doubt it. We are irrational ourselves. We consume based on irrationality not because of some "brainwashing". Advertisement doesn't cause big businesses to form because other companies can advertise as well. New guys need a form to spread the message of their product.

My big question is, if this is a problem evident in an unregulated free market, what's the solution? I can think of no way to solve this without invoking government or some regulator, and I can think of no reason why if this is a problem evident in humanity, government/regulators would somehow be better. The only way to really solve that problem would be to somehow guarantee a more rational consumer, but I'm not sure how that could happen.
Open borders debate:
http://www.debate.org...
darkkermit
Posts: 11,204
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9/14/2012 1:48:41 PM
Posted: 4 years ago
At 9/14/2012 1:45:46 PM, socialpinko wrote:
At 9/14/2012 1:42:18 PM, darkkermit wrote:
At 9/14/2012 1:32:05 PM, socialpinko wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:

"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

......that and intellectual property enforcement, externalization of transportation costs, regulatory measures (like licensing requirements, quality standards, etc.) that take quality out as an object of competition and add higher overheads to non-established market actors, etc. etc. Do you really think Apple, Microsoft, Johnson and Johnson, the majority of large banks, the majority of large auto manufacturers, etc. etc. got to their size solely owing to satisfaction of consumer demand? Big businesses as we see them today would seem not to be sustainable in a free market.

What about facebook? There's no way that "government intervention" caused facebook to become so big. This is because it gained through the network effect. In other words, because more people are using facebook, the more people that use it, the more valuable it become. A site like facebook can be so large because of market forces, and not government.

I guess my point was more about traditional type goods and services. The Internet allows for a huge amount of decentralized management and overhead seems to be a lot lower for purely Internet ventures as opposed to manufacturing.

However, its just speculation. A lot of goods/services rely on the networking effect.

I'm also curious how far your willing to take "against copyright/patents". Is it already If I make a soda brand and label it as "Coca-cola"?
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darkkermit
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9/14/2012 1:50:05 PM
Posted: 4 years ago
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.
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socialpinko
Posts: 10,458
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9/14/2012 1:50:52 PM
Posted: 4 years ago
At 9/14/2012 1:48:41 PM, darkkermit wrote:
At 9/14/2012 1:45:46 PM, socialpinko wrote:
At 9/14/2012 1:42:18 PM, darkkermit wrote:

What about facebook? There's no way that "government intervention" caused facebook to become so big. This is because it gained through the network effect. In other words, because more people are using facebook, the more people that use it, the more valuable it become. A site like facebook can be so large because of market forces, and not government.

I guess my point was more about traditional type goods and services. The Internet allows for a huge amount of decentralized management and overhead seems to be a lot lower for purely Internet ventures as opposed to manufacturing.

However, its just speculation. A lot of goods/services rely on the networking effect.

I'm also curious how far your willing to take "against copyright/patents". Is it already If I make a soda brand and label it as "Coca-cola"?

I'm not totally sure yet myself. I suppose though there's some point where putting out a product like that moves from imitation to actual fraud i.e., a company claiming to be selling products from the Coke company or whatever.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
:
: I disagree.
darkkermit
Posts: 11,204
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9/14/2012 1:54:42 PM
Posted: 4 years ago
At 9/14/2012 1:50:52 PM, socialpinko wrote:
At 9/14/2012 1:48:41 PM, darkkermit wrote:
At 9/14/2012 1:45:46 PM, socialpinko wrote:
At 9/14/2012 1:42:18 PM, darkkermit wrote:

What about facebook? There's no way that "government intervention" caused facebook to become so big. This is because it gained through the network effect. In other words, because more people are using facebook, the more people that use it, the more valuable it become. A site like facebook can be so large because of market forces, and not government.

I guess my point was more about traditional type goods and services. The Internet allows for a huge amount of decentralized management and overhead seems to be a lot lower for purely Internet ventures as opposed to manufacturing.

However, its just speculation. A lot of goods/services rely on the networking effect.

I'm also curious how far your willing to take "against copyright/patents". Is it already If I make a soda brand and label it as "Coca-cola"?

I'm not totally sure yet myself. I suppose though there's some point where putting out a product like that moves from imitation to actual fraud i.e., a company claiming to be selling products from the Coke company or whatever.

Because coca-cola gets its power from its brand name. There's been studies showing that people prefer no-coca cola products if the brand name isn't seen. In fact, the networking effect is what gives brand names its power. So the networking effect exists almost everywhere.
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socialpinko
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9/14/2012 1:56:15 PM
Posted: 4 years ago
At 9/14/2012 1:50:05 PM, darkkermit wrote:
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.

Trade secrets I think are a different matter. Like I wouldn't theoretically have a problem with Coca-Cola choosing to keep its formula a secret. There's obviously no reason that this infringes on what anyone else is doing and I think that if regulatory oversight and quality standardization as services were allowed to operate on the market there would also be ways to unearth some trade secrets (for quality/safety practices). Of course yeah it's all speculation anyways.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
:
: I disagree.
socialpinko
Posts: 10,458
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9/14/2012 2:00:34 PM
Posted: 4 years ago
At 9/14/2012 1:54:42 PM, darkkermit wrote:
At 9/14/2012 1:50:52 PM, socialpinko wrote:
At 9/14/2012 1:48:41 PM, darkkermit wrote:

However, its just speculation. A lot of goods/services rely on the networking effect.

I'm also curious how far your willing to take "against copyright/patents". Is it already If I make a soda brand and label it as "Coca-cola"?

I'm not totally sure yet myself. I suppose though there's some point where putting out a product like that moves from imitation to actual fraud i.e., a company claiming to be selling products from the Coke company or whatever.

Because coca-cola gets its power from its brand name. There's been studies showing that people prefer no-coca cola products if the brand name isn't seen. In fact, the networking effect is what gives brand names its power. So the networking effect exists almost everywhere.

That's fine. I just think (side-stepping the problem of consumer irrationality) there are mechanisms to offset the existence of corporations getting as big as say Microsoft or Coke. Informational barriers when companies grow too large and centralized, the existence of free software and lack of IP enforcement, removal of barriers to competition and lowering of overheads due to increased technological efficacy are theoretical mechanisms which I think would offset this. But I guess that's getting away from the actual topic which was originally consumer irrationality.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
:
: I disagree.
Wallstreetatheist
Posts: 7,132
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9/14/2012 2:02:17 PM
Posted: 4 years ago
At 9/14/2012 1:32:05 PM, socialpinko wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:

"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

......that and intellectual property enforcement, externalization of transportation costs, regulatory measures (like licensing requirements, quality standards, etc.) that take quality out as an object of competition and add higher overheads to non-established market actors, etc. etc. Do you really think Apple, Microsoft, Johnson and Johnson, the majority of large banks, the majority of large auto manufacturers, etc. etc. got to their size solely owing to satisfaction of consumer demand? Big businesses as we see them today would seem not to be sustainable in a free market.

The quote assumes a free market. Also, those things you mentioned is why I posted the video. :)
DRUG HARM: http://imgur.com...
Primal Diet. Lifting. Reading. Psychedelics. Cold-Approach Pickup. Music.
darkkermit
Posts: 11,204
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9/14/2012 2:04:30 PM
Posted: 4 years ago
At 9/14/2012 1:56:15 PM, socialpinko wrote:
At 9/14/2012 1:50:05 PM, darkkermit wrote:
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.

Trade secrets I think are a different matter. Like I wouldn't theoretically have a problem with Coca-Cola choosing to keep its formula a secret. There's obviously no reason that this infringes on what anyone else is doing and I think that if regulatory oversight and quality standardization as services were allowed to operate on the market there would also be ways to unearth some trade secrets (for quality/safety practices). Of course yeah it's all speculation anyways.

I don't see how keeping trade secrets is any different from patent law. Trade secrets allow monopolization to occur. Plus it makes it more difficult for smaller businesses to enter the market because they can't have access to the trade secrets. They can buy the trade secrets. However, you can look up patents for free and try to come up with new products or use them as inspiration for new ideas. And THEN you can pay for the royalties once the product is created.
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Wallstreetatheist
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9/14/2012 2:08:50 PM
Posted: 4 years ago
At 9/14/2012 1:22:03 PM, jat93 wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

I generally agree, but lately I've been wondering, what if big business simply brainwashes the customers via advertisements and messages on tv, internet, radio, signs etc... Big business can screw with the free market by convincing people to make irrational choices, or choices that they wouldn't necessarily make without the ads and the subliminal messages or whatever methods big business would use to get people to buy their products.

Essentially my point is, big business can counteract the natural free market by creating a consumer who will not necessarily be acting in their own rational self interest. If this is true, (and if it isn't, why not?) doesn't that kind of spell a problem for the free market?

Companies that convince people to buy their products who do not do it in a way to satisfy consumer demand never last long. This includes false advertising, outright lies, cheaply constructed products, etc. I think the role advertising plays is to affect consumer tastes and remind people that whatever they're selling is still available (or has become available).

The free market has a check on this as well: annoyance-->boycot-->less business. Imagine if you were constantly bombarded on the internet, television, billboards, radio, even in the bathroom stall of a product. The response would probably be disgust or annoyance, and a skepticism about why this producer needs to advertise so much.

Anyway, as much as I hate advertising, I'm willing to pay the price for slightly altered preferences as long as it funds the awesome stuff I love.
DRUG HARM: http://imgur.com...
Primal Diet. Lifting. Reading. Psychedelics. Cold-Approach Pickup. Music.
Wallstreetatheist
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9/14/2012 2:09:19 PM
Posted: 4 years ago
At 9/14/2012 1:50:05 PM, darkkermit wrote:
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.

Business models are monopolies.
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darkkermit
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9/14/2012 2:14:17 PM
Posted: 4 years ago
At 9/14/2012 2:09:19 PM, Wallstreetatheist wrote:
At 9/14/2012 1:50:05 PM, darkkermit wrote:
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.

Business models are monopolies.

Not sure what you mean by that. Businesses of course want to make sure that there aren't more suppliers. This can be through government intervention but there's no reason why market mechanism can't do the trick as well.

I often find it misleading that "in a free society" or "without government intervention". The government and laws are the ones that set the rules of the game. Businesses just follow the rules or pay the cost for breaking the rules. There would still be rules of the game and laws in a stateless society.
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darkkermit
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9/14/2012 2:15:44 PM
Posted: 4 years ago
At 9/14/2012 2:08:50 PM, Wallstreetatheist wrote:
At 9/14/2012 1:22:03 PM, jat93 wrote:
At 9/14/2012 9:01:49 AM, Wallstreetatheist wrote:
"Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers. Big business depends entirely on the patronage of those who buy its products: the biggest enterprises loses its power and its influence when it loses its customers." -Ludwig von Mises

I generally agree, but lately I've been wondering, what if big business simply brainwashes the customers via advertisements and messages on tv, internet, radio, signs etc... Big business can screw with the free market by convincing people to make irrational choices, or choices that they wouldn't necessarily make without the ads and the subliminal messages or whatever methods big business would use to get people to buy their products.

Essentially my point is, big business can counteract the natural free market by creating a consumer who will not necessarily be acting in their own rational self interest. If this is true, (and if it isn't, why not?) doesn't that kind of spell a problem for the free market?

Companies that convince people to buy their products who do not do it in a way to satisfy consumer demand never last long. This includes false advertising, outright lies, cheaply constructed products, etc. I think the role advertising plays is to affect consumer tastes and remind people that whatever they're selling is still available (or has become available).

The free market has a check on this as well: annoyance-->boycot-->less business. Imagine if you were constantly bombarded on the internet, television, billboards, radio, even in the bathroom stall of a product. The response would probably be disgust or annoyance, and a skepticism about why this producer needs to advertise so much.

Anyway, as much as I hate advertising, I'm willing to pay the price for slightly altered preferences as long as it funds the awesome stuff I love.

my main point, not sure if this is different from jat, is that consumers don't know what's best for their long term happiness. Do you think a cocaine addict wants to buy more cocaine? Do you think he's acting rationally?
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Wallstreetatheist
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9/14/2012 2:17:02 PM
Posted: 4 years ago
At 9/14/2012 2:15:44 PM, darkkermit wrote:
my main point, not sure if this is different from jat, is that consumers don't know what's best for their long term happiness. Do you think a cocaine addict wants to buy more cocaine? Do you think he's acting rationally?

Different people are different. He's maximizing his utility via his reward circuitry. That's why we do everything.
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darkkermit
Posts: 11,204
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9/14/2012 2:25:10 PM
Posted: 4 years ago
At 9/14/2012 2:17:02 PM, Wallstreetatheist wrote:
At 9/14/2012 2:15:44 PM, darkkermit wrote:
my main point, not sure if this is different from jat, is that consumers don't know what's best for their long term happiness. Do you think a cocaine addict wants to buy more cocaine? Do you think he's acting rationally?

Different people are different. He's maximizing his utility via his reward circuitry. That's why we do everything.

Neoclassical economics might state that people maximize their utility, but behavior studies on happiness state otherwise.

Do you really believe that humans are utility maximizers? That we can some how do lagrange multipliers in our head to solve multivariable calculus equations in our head.
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Wallstreetatheist
Posts: 7,132
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9/14/2012 2:26:09 PM
Posted: 4 years ago
At 9/14/2012 2:14:17 PM, darkkermit wrote:
At 9/14/2012 2:09:19 PM, Wallstreetatheist wrote:
At 9/14/2012 1:50:05 PM, darkkermit wrote:
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.

Business models are monopolies.

Not sure what you mean by that. Businesses of course want to make sure that there aren't more suppliers. This can be through government intervention but there's no reason why market mechanism can't do the trick as well.

I often find it misleading that "in a free society" or "without government intervention". The government and laws are the ones that set the rules of the game. Businesses just follow the rules or pay the cost for breaking the rules. There would still be rules of the game and laws in a stateless society.

1) There is no punishment for copying products in the free market, so producers will naturally come in to copy a product/business/service to provide for some of that demand for profit. In order to keep your business' market share somewhat high, your business model needs to be strong and dynamic.

2) Each business model is a monopoly with respect to its competitors.

3) I agree, Market Anarchy =/= lawlessness. Dispute resolution agencies would likely handle the issues of business fraud, pollution, etc.
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socialpinko
Posts: 10,458
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9/14/2012 2:27:34 PM
Posted: 4 years ago
At 9/14/2012 2:04:30 PM, darkkermit wrote:
At 9/14/2012 1:56:15 PM, socialpinko wrote:
At 9/14/2012 1:50:05 PM, darkkermit wrote:
I also forgot to mention that even if you make it so that you get rid of patent law, then it isn't like these businesses are going to give away their trade secrets for free.

Trade secrets I think are a different matter. Like I wouldn't theoretically have a problem with Coca-Cola choosing to keep its formula a secret. There's obviously no reason that this infringes on what anyone else is doing and I think that if regulatory oversight and quality standardization as services were allowed to operate on the market there would also be ways to unearth some trade secrets (for quality/safety practices). Of course yeah it's all speculation anyways.

I don't see how keeping trade secrets is any different from patent law. Trade secrets allow monopolization to occur. Plus it makes it more difficult for smaller businesses to enter the market because they can't have access to the trade secrets. They can buy the trade secrets. However, you can look up patents for free and try to come up with new products or use them as inspiration for new ideas. And THEN you can pay for the royalties once the product is created.

The difference lies in the fact that you can work towards figuring out the secret on your own or trying to come up with a better formula. The problem with patents or copyrights is that it *necessarily* grants monopolistic control whereas trade secrets are just *contingently* monopolistic. I also pointed out that when quality/standard control becomes a service on the market there would also be some mechanisms for unearthing trade secrets which may allow for detrimental products.
: At 9/29/2014 10:55:59 AM, imabench wrote:
: : At 9/29/2014 9:43:46 AM, kbub wrote:
: :
: : DDO should discredit support of sexual violence at any time and in every way.
:
: I disagree.
Wallstreetatheist
Posts: 7,132
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9/14/2012 2:28:35 PM
Posted: 4 years ago
At 9/14/2012 2:25:10 PM, darkkermit wrote:
At 9/14/2012 2:17:02 PM, Wallstreetatheist wrote:
At 9/14/2012 2:15:44 PM, darkkermit wrote:
my main point, not sure if this is different from jat, is that consumers don't know what's best for their long term happiness. Do you think a cocaine addict wants to buy more cocaine? Do you think he's acting rationally?

Different people are different. He's maximizing his utility via his reward circuitry. That's why we do everything.

Neoclassical economics might state that people maximize their utility, but behavior studies on happiness state otherwise.

Do you really believe that humans are utility maximizers? That we can some how do lagrange multipliers in our head to solve multivariable calculus equations in our head.

No, not utility maximizers. But, we do want to maximize stimulation to our reward circuitry.
DRUG HARM: http://imgur.com...
Primal Diet. Lifting. Reading. Psychedelics. Cold-Approach Pickup. Music.
darkkermit
Posts: 11,204
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9/14/2012 2:29:50 PM
Posted: 4 years ago
At 9/14/2012 2:28:35 PM, Wallstreetatheist wrote:
At 9/14/2012 2:25:10 PM, darkkermit wrote:
At 9/14/2012 2:17:02 PM, Wallstreetatheist wrote:
At 9/14/2012 2:15:44 PM, darkkermit wrote:
my main point, not sure if this is different from jat, is that consumers don't know what's best for their long term happiness. Do you think a cocaine addict wants to buy more cocaine? Do you think he's acting rationally?

Different people are different. He's maximizing his utility via his reward circuitry. That's why we do everything.

Neoclassical economics might state that people maximize their utility, but behavior studies on happiness state otherwise.

Do you really believe that humans are utility maximizers? That we can some how do lagrange multipliers in our head to solve multivariable calculus equations in our head.

No, not utility maximizers. But, we do want to maximize stimulation to our reward circuitry.

Which isn't always good. Our reward stimuluation system was designed for survival in prehistoric times, not modern societies.
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FREEDO
Posts: 21,057
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9/14/2012 5:59:09 PM
Posted: 4 years ago
Point being? Oh, right, that big business must always be good then. It would only be fair for the best to do the most well off afterall, wouldn't it?
Well, lets look at a few things that neglects.

1. Customer Irrationality I
Brand loyalty is an example of customer irrationality that affects this issue. It's quite a influential phenomenon. People will stick to one brand over it's competitors, despite what facts or experience is presented which would paint a bad picture of them. The idea that costumers will always keep the best company in the lead is entirely falsifiable.

2. Customer Irrationality II
This then actually creates an incentive for businesses to increase customer irrationality. The businesses which are most adapt at using psychological tricks for taking advantage of customers will receive an advantage.

3. Working Conditions
This process includes no mechanism for selecting business which treat their workers better. In-fact, the business which can most effectively cut jobs and wages generally do better.

4. Exterior Affects
Besides the affects on customers and workers, there is also a bounty of other people it affects. Customers may be paying the company due to their desire to take advantage of others and the service which the company offers helps them do that. Or perhaps taking advantage of others is not the objective but is still a side-effect. Or perhaps harm is being caused without anyone gaining from it, just being collateral damage, such as in many cased of environmental destruction.

5. Market Manipulation
Once a company becomes excessively powerful, it gains the ability to use monetary leverage on it's competitors to create an unfair race. That is, if we're judging "fair" as the ability to meet customer satisfaction.

So the truth is, companies do not go through a simple process of natural selection for selecting the most beneficial company to society. It doesn't even do a great job at naturally selecting the best for customers. There are many other things at play.
GRAND POOBAH OF DDO

fnord
Wallstreetatheist
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9/14/2012 6:42:16 PM
Posted: 4 years ago
At 9/14/2012 5:59:09 PM, FREEDO wrote:
Point being? Oh, right, that big business must always be good then. It would only be fair for the best to do the most well off afterall, wouldn't it?

Silly FREEDO didn't watch the video! You're pro-business now, remember?

Well, lets look at a few things that neglects.

1. Customer Irrationality I
Brand loyalty is an example of customer irrationality that affects this issue. It's quite a influential phenomenon. People will stick to one brand over it's competitors, despite what facts or experience is presented which would paint a bad picture of them. The idea that costumers will always keep the best company in the lead is entirely falsifiable.

If the quality of my shaving cream declines to the point that it's setting my pubes on fire, it's time to change brands.

2. Customer Irrationality II
This then actually creates an incentive for businesses to increase customer irrationality. The businesses which are most adapt at using psychological tricks for taking advantage of customers will receive an advantage.

Again, such an advantage doesn't mean shi'ite if the product is really bad.

3. Working Conditions
This process includes no mechanism for selecting business which treat their workers better. In-fact, the business which can most effectively cut jobs and wages generally do better.

Reputation factors, labor market competition, private sector unions :)

4. Exterior Affects
Besides the affects on customers and workers, there is also a bounty of other people it affects. Customers may be paying the company due to their desire to take advantage of others and the service which the company offers helps them do that. Or perhaps taking advantage of others is not the objective but is still a side-effect. Or perhaps harm is being caused without anyone gaining from it, just being collateral damage, such as in many cased of environmental destruction.

And your solution to environmental destruction is what? More public land for the tragedy of the commons to occur in? More government agencies to get away with dumping in rivers, streams, oceans, lakes, etc? Have you seen Lake Baikal during the USSR? US DOD compounds are the most polluted sites in the US. The free market causes people to 1) take good stewardship of their land because it is economically encouraged, and 2) refrain from polluting too much to cause others harm, which will result in torts being filed against the company and a bad reputation.

5. Market Manipulation
Once a company becomes excessively powerful, it gains the ability to use monetary leverage on it's competitors to create an unfair race. That is, if we're judging "fair" as the ability to meet customer satisfaction.

The moment it does, 1) competitors will come in who can serve customer better, 2) copy-cat companies will be able to replicate some of their products to reduce their market share, and 3) an example of a monopoly forming without government aid and existing for any reasonable period of time has never occurred in history (except De Beers and the NYSE from 1860s to 1930s).

So the truth is, companies do not go through a simple process of natural selection for selecting the most beneficial company to society. It doesn't even do a great job at naturally selecting the best for customers. There are many other things at play.

Do you know of any system that better provides for human wants than the free market?
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Wallstreetatheist
Posts: 7,132
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9/14/2012 6:43:54 PM
Posted: 4 years ago
At 9/14/2012 2:29:50 PM, darkkermit wrote:
At 9/14/2012 2:28:35 PM, Wallstreetatheist wrote:
At 9/14/2012 2:25:10 PM, darkkermit wrote:
At 9/14/2012 2:17:02 PM, Wallstreetatheist wrote:
At 9/14/2012 2:15:44 PM, darkkermit wrote:
my main point, not sure if this is different from jat, is that consumers don't know what's best for their long term happiness. Do you think a cocaine addict wants to buy more cocaine? Do you think he's acting rationally?

Different people are different. He's maximizing his utility via his reward circuitry. That's why we do everything.

Neoclassical economics might state that people maximize their utility, but behavior studies on happiness state otherwise.

Do you really believe that humans are utility maximizers? That we can some how do lagrange multipliers in our head to solve multivariable calculus equations in our head.

No, not utility maximizers. But, we do want to maximize stimulation to our reward circuitry.

Which isn't always good. Our reward stimuluation system was designed for survival in prehistoric times, not modern societies.

That's definitely true. This is the root of any harmful addiction (drugs, sex, porn, gambling, fatty/sugary/salty food).
DRUG HARM: http://imgur.com...
Primal Diet. Lifting. Reading. Psychedelics. Cold-Approach Pickup. Music.