Posted 7 April, 2012 in:

Competition vs. the US

If you are wearing shoes, are they brand-matched with your socks? Does the brand of your belt match your pants? Do your pants use a patented belt loop system that makes them incompatible with other belts?

Look at what you are wearing. Did it all come from the same store? Look at your feet. If you are wearing shoes, are they brand-matched with your socks? Does the brand of your belt match your pants? Do your pants use a patented belt loop system that makes them incompatible with other belts? These days, the barriers to entry are rising faster than Jesus beats it out of the tomb on Easter to get himself a (preternaturally kosher) green eggs and ham sandwich. Even a seemingly mundane industry like farming has Mount Anto scrambling to bind the farmers’ hands and brand their hides. It’s the same story almost everywhere you look. Businesses trying to subvert the marketplace in favor of their own profits. It’s a recipe for disaster. Subverting the marketplace is the economic equivalent of deforestation. In the short term you get tons of cheap wood and farmland, but in the long term you have tossed away some of your greatest resources for stability in favor of a few years of profits. Even our leaders can’t help themselves, though. They have long blocked any real competition for governance, savoring their cushy seats so much that they now increasingly risk their oligopoly due to the ever-escalating war of words they must rely on to keep their constituents in a frenzy rather than letting them calmly pore over the issues. But it’s harmful. The creation of commerce depends upon diversity and choice. When industries couple themselves together, they remove choice from the market, and they decrease the overall creation of commerce. More precisely, they usurp the individual’s choice and act as a proxy for it. You might prefer one firm’s shoelaces, and another firm’s shoes, but without the choice to relace the shoes, you must decide which is more important. If the barriers to entry are low, that’s fine, because the firm that’s losing can simply improve on their faults. But when barriers are high, and many choices are coupled, it’s much harder. Consumers are making thousands of tradeoffs and only choosing amongst a few firms in doing so. The USA currently has lackluster competition in a variety of key areas (including the political markets), resulting in subpar economic performance. Until that changes, consumers get inferior goods, investors get inferior returns, and stability will remain more fragile than it needs to be.

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