Have the lockdowns and empty shelves that formerly held toilet paper really been that long ago? Artificially forcing sale prices to remain static when the underlying dynamic, which is to say the price, has changed creates economic dislocation and even suffering. Prices carry information and are not arbitrary.
Choose your emergency: paper products, bottled water after a hurricane, etc. Value is subjective; no item has an underlying True Intrinsic Price. When demand increases, the item becomes more valuable. The price should go up, at least in the short term. When held lower than the market price, runs occur and shelves empty. When allowed to rise, increased prices have a natural rationing effect to keep goods on the shelves for people who need them. Higher prices attract new providers, and the increased supply brings prices back down as circumstances return to normal.
Analyzed rationally, we see there’s no such thing as price gouging. The concept is an appeal to our base instincts.
When a potential employer demonstrates willingness to pay more with an offer that includes higher compensation, is the applicant a “price gouger” for charging a higher price than she would would have otherwise?
When someone is selling a house, is the seller a “price gouger” for accepting the higher of two competing offers for the same house?
Do you have any rhetorical examples that don't involve major negotiations? There's a big difference between two parties sitting down to hammer out a deal worth six or seven figures, and getting charged more in a retail transaction because the company has collected megabytes of data on my personal habits and they think I'll pay more for mouthwash.
People don't want every single retail transaction to turn into a negotiation on the level of buying a house or taking a new job.
It happens all around us. The term from the literature is market segmentation. Exceedingly bright people make a lot of money identifying, analyzing, and adapting to the boundaries of market segments. Airline prices tend to be more expensive during the week because business travelers occupy more seats, want to get home sooner, and are less price-sensitive due to employers footing the bill. In the U.S., your choice of Publix, Kroger, Walmart, or Aldi for grocery shopping demonstrates your most comfortable segment. After passing through the doors of your favorite grocer, further opportunities for market segmentation are in your choice between name brands or store brands, which both may have originated from the same supplier.
Grocery store margins tend to be thin. Where they really want you going is to the pharmacy, and surprisingly, what they want you to buy is generic drugs — more market segmentation. The name brand drugs tend to be really expensive. The generics are much cheaper in direct comparison, and for the store, the margin on generics is higher because name-brand prices create headroom. Yes, these broad generalizations have lots of exceptions, e.g., some generics are not perfect substitutes for name brand drugs, but the general pattern is there.
Market segmentation and dynamic pricing aren’t the same thing. Dynamic pricing is showing two different people different prices for an identical purchase based on your knowledge of the potential purchasers. It’s not, Amazon carries name brand and generic products because some people will pay more for the brand. It would be, Amazon shows me $10 for SKU X and shows you $20 for SKU X because their data says you’ll pay $20.
I reject the eschatology that your comment assumes. I believe we agree, however, that the answer is more competition, not less.
But imposing heavier regulatory burdens has disproportionately adverse effects on smaller would-be competitors. The big, established players know this and actively engage in enlargement of regulatory scope and regulatory capture to widen their moats. Historical examples of this are Jeff Bezos encouraging states to be more aggressive in requiring sales tax levies on internet purchases and more recently the calls by Sam Altman and Dario Amodei to “pace” AI through regulation. On the surface, they appear to be public-spirited moves but are deeply self-interested.
Breaking up big players does not impose anything on smaller competitors.
It's just that breaking up large companies has taken a very distant back seat to imposing "good for the consumer on the surface, but actually a moat" type regulations.
Yes - because "additional regulatory burdens" aren't the answer... breakups are.
Somehow we've settled into a spot where it's acceptable to have incredibly powerful monopoly/duopoly structures in American culture, sometimes with a "third wheel" of a small scattering of options to make it appear as though there's competition. Usually, the terms these companies operate under are substantially "the same" from a consumer point of view (whole related can of worms there - see: "tyranny of contract - starting with Engels and leading to Kreitner")
Want a computer? Choose: Microsoft or Apple.
Want a phone? Choose: Apple or Google.
Want to advertise? Choose: Google.
Want a credit card? Choose: Visa or Mastercard (third wheel: Discover/Amex)
Want a browser? Choose: Google (third wheel: Firefox/Safari/Edge)
Want a grocery store? Choose: Walmart or Kroger.
Want internet? Choose: ATT or Comcast.
Want to watch TV? Choose: Comcast or Disney (third wheel: Fox/Paramount/WB)
Want to stream a show? Choose: Disney or Paramount (third wheel: Amazon/Netflix)
Want to bank? Choose: JPMorgan Chase or Bank of America (lots of third wheels still, but they hold more than the next 6 combined in assets)
Want a political party? Choose: Republican or Democrat.
Want to sell a good online? Choose: Walmart or Amazon.
Want to do home improvements? Choose: Home Depot or Lowes.
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It's not about regulatory burden, its about a clear failure to provide competition by allowing a small number of dominate players to functionally own a market.
They're just competitive enough to shut down any real competition (by undercutting them via scale, cash-on-hand, and monopoly effects) but the impact is short-lived.
And I partly blame our response in 2008 - we appear to have decided that it entirely ok to be "too big to fail" and that's an acceptable state of the country.
And it's definitely "efficient" (in some respects - much like cancer is incredibly efficient at replicating and capturing resources) but I don't think it's particularly healthy for society. A very small number of folks are sucking up more and more wealth via a set of largely entrenched conglomerates. Meanwhile - any feedback mechanism or regulation that might stop that siphoning has been knocked away.
It feels like we had a nice breeze for a bit, but we're headed directly back to the "Robber Baron" age.
We’re too far apart on this. I reject “historical determinism” and “late-stage capitalism,” but in response you throw out Engels, Kreitner, and “tyranny of contract” as though they might be in any sense persuasive.
A contract formalizes the terms of an agreement: “I will provide X in exchange for you providing Y.” In the event of a dispute, the contract provides an objective record of what both sides committed to performing. This is how free people transact business. The people who want to sign their name to one agreement but then have a strong-arming outsider change the terms — allegedly in the name of “fairness,” “social welfare,” or some other aggressively undefined abstraction that may be manipulated “to mean anything or nothing at pleasure” — are expropriating parasites. They demand to replace clarity and order with “progress,” itself an undefined term with no end state and an infinite playground for radical revolutionaries. Throughout history, this has been a recipe for tyranny. Every accusation is a confession.
The state does not and cannot “provide competition.” The regulatory frameworks put up are inevitably captured because the witless regulators are intellectually undermatched. The allegedly independent but captured philosopher-kings now do the bidding of their corporate masters under color of law. Instead of realizing the gigantic systematic error, radical revolutionaries want to be even more destructive and bring out their sledge hammers to forcibly break up companies, even if doing so harms consumers.
This is not how free people deal with one another. Let peace and freedom cause a thousand flowers to bloom. Stop making it difficult for new competitors to enter the market. Get out of the way.
But we have to have common ground from which to start. If merely committing terms of an agreement to writing is alleged to be tyranny, so absurd that it’s hard to believe that anyone holds such a position in earnest — if the two camps cannot agree enough on the rules of the game to write them down, then they have no hope of uniting in a peaceful society.
Go actually read Kreitner - then consider the standard EULA you're required to accept for all services.
Consider whether his argument is at least a valid description of the issue of "free people transact[ing] business" when one side is literally the ONLY service provider, and the other is a utterly disposable customer.
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Your comment implies you don't actually understand the discussion.
They aren’t the “ONLY” service provider, and you know this. Competing and compatible products exist. No one is forcing, metaphorically or literally, you to do anything.
Sure, everyone would prefer to have all the stuff they want for low or zero cost. That’s Santa Claus economics.
> Sure, everyone would prefer to have all the stuff they want for low or zero cost. That’s Santa Claus economics.
This - this again implies you're not actually engaging in the conversation. I have zero interest in "free" things.
I do have interest in their being at least some real negotiation between parties signing a contract.
For pretty much all consumers - there is no negotiation. The contract says what the company wants it to say, and if you don't like it - fuck off. Same is mostly true for small business as well.
And yes - my WHOLE comment above is pointing out that often... they are literally the only provider. Or one of two or three providers that have essentially identical terms. (See - Apple and Google for mobile).
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So circling around again to the point - My stance is there are two functional paths forwards:
1. Break up the offenders into small enough pieces that meaningful competition around service levels, pricing, terms & conditions, and features exists again. When we go back in time - arguably this was the drive that ended the age of "Robber Barons" - laws like Sherman Anti-trust were a direct response to concentration occurring in the early to mid 1800s in railroads and oil.
To directly quote Sherman: "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life." Ring familiar when applied to Apple/Google in mobile today? (Be honest....)
2. Nationalize the fuckers. You and I probably disagree quite a bit here - but this is the route I'd argue is more productive long term. If a monopoly is natural (aka - market forces make it hard to avoid) then the people need to own it or regulate the absolute hell out of it. See - utilities.
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But no - continue blaming me for wanting "santa claus" economics instead of actually engaging or participating in the conversation. I'll leave it here. I don't think we're really conversing so much as you're ignoring what I'm saying and focusing on words where your presumed definition matters more than the context in which the discussion is happening.
So no - I don't want Santa Claus. I'd much prefer strong labor unions, a focus on consumer rights, and a political party in the US less interested sucking billionaire dick. Historically speaking - we'll get there, but its going to get ugly first.
Prices carry information and are not arbitrary. Insurance is a paid transfer of risk. Policies that have greater risk of loss require higher premium charges or the insurer goes broke.
Actuarial science is its own field that prices uncertain future events. As you’re bringing out here, the insurer has additional uncertainty as to the actual driving habits of their policyholders, so some conservatism is likely priced in. Aggressive drivers would like to pay the premiums of careful drivers.
This is related to the origin of GEICO, Government Employees Insurance Company. Back in the day, you had to be a state or federal employee for them to bind coverage. The investment thesis was that civil servants’ caution in their choice of employment was an accurate indication of their overall risk appetite and risk-taking behavior. GEICO was able price policies lower without going broke because they by design insured a lower-risk population.
In the early 2000s, I used the Tcl/Tk bindings to the VxWorks target management API. The application hotloaded and -unloaded test modules for a hardware in the loop lab. Tcl allowed the first working concept to come to life in a few days. I have no idea how long it would have taken with with C++ library.
As a teen I attended a weeklong ArsDigita workshop in the vault of their Pasadena office. It was in an old bank building on Green St. Aeron chairs, Sun Ray thin clients (iirc), a huge circular bank vault door...
I remember being introduced to regex one day, and later the instructor (a Caltech PhD?) being surprised my code passed all his tests in a class review.
I thank my cousin, who lived by the 7Cs, for hosting me and driving so far to pick me up the first night (after I hung out waay too long with new acquaintances in the AD office).
And I remember, after a day of learning Tcl, while waiting for an express bus back to Claremont, listening to a woman belt out opera on an empty Colorado Blvd in front of Vroman's, like a private opera rehearsal.
