The market does not always do right by us

One of the basic libertarian axioms (at least for many of the libertarians I’ve read) is that a completely deregulated market is a sweet deal for us consumers. The market doesn’t need government to make businesses do right; they have to do right to attract customers. If they fail to give good service (or good products), we shop with someone else and they go belly-up.

Last week’s godawful flight was a reminder what a load of codswallop that is.

I like flying, but the decades since the government deregulated air flight in 1978 (not complete deregulation), it hasn’t gotten better for us consumers. If anything, the airlines thrive on making things worse, then offering extra money to upgrade. As the Consumerist blog put it, though I can’t find the link, it’s in their interest to make us miserable so we’ll upgrade. Seats are small (and could get worse), service is poor and the airlines stay solvent by not having much redundancy: if a flight gets canceled or a crew member doesn’t show, it’s often not easy to find an alternative (in fairness, there are financial reasons for that).

Or consider calling your Internet service, power company, insurer … well, pretty much anyone. Some small businesses pick up the phone; with big ones (or even slightly big ones)  it’s a tedious slog through a phone network. In one case (dealing with one of my mother’s banks), I could not find an answer in the list of “press 1 for X, 2 for Y” options.

Having human operators would be a vast improvement, but that would cost them money; much better to stick us with the wasted time we spend on the phone (Slacktivist points out that we also get the burden of handling Internet and debit card security).

In both cases, we consumers are stuck. It’s often impractical or massively inconvenient to drive out of state (to Mysticon, for instance). If we need to talk to someone on the phone, we need to talk to someone on the phone. And unless we have a boatload of alternatives, we’re stuck. So we suffer, they make more money and the shareholders/owners suck it up. Which is why I also see libertarians explaining this is the way it should be: the only people companies aren’t allowed to screw over are the owners.

Just to be fair, I’ll look at a counter-argument. The conservative flagship National Review has been a welfare case for years. They rely on donations, even to pay their legal bills in a case a few years ago. So they’re not depending on success with consumers to stay afloat. And without the pressure to compete in the marketplace we get articles like Kevin D. Williamson’s (yes, that Kevin D. Williamson. Who’s also the Kevin D. Williamson who claimed Romney was more of a man than Obama because five sons beats two daughters) explanation for why Swedish-style socialized medicine won’t work here. To wit, because Swedes are responsible, while Americans just mooch and want a handout. No, it doesn’t make any sense — but without free-market pressure, it doesn’t have to.

3 Comments

Filed under economics, Politics

3 responses to “The market does not always do right by us

  1. Zosimus the Heathen

    I feel your pain re air travel within the US, for my last experience with it myself (during an eight-or-so-week holiday in the States in 2013) wasn’t all that crash hot (eh, probably not the best phrase to use!) either. One thing that struck me about many of the providers I used to get around the country was just how *stingy* so many of them were; on many flights you’d be lucky to get a single complimentary drink (invariably half a plastic cup of some half-flat soft drink). On one, we didn’t even get *that*, though my ears perked up at one point when an announcement was made that, because we’d been such a great bunch of people to fly with, the airline had a special treat for us. Unfortunately, said “treat” turned out to be nothing more than a stupid credit card offer, which caused my momentary excitement to instantly vanish.

    Unfortunately, some of the domestic airlines here aren’t that much better. One particularly bad offender is one called JetStar, which promises dirt cheap flights at the expense of absolutely no comforts or amenities unless you pay for them; a ridiculously strict check-in policy (apparently, if you’re so much as a minute late checking in, your ticket is cancelled and you don’t get a refund); and an apparently terrible level of service. Not that I’d know personally as I’ve never used them – I was turned off them when they were one of the first companies in Australia to take advantage of an odious bit of industrial relations legislation called WorkChoices[*] to put all their staff on shitty new contracts that drastically cut their pay and conditions (still I suppose their precious shareholders were happy about that, which is all that really matters). Of course, that’s another area where libertarians love, love, LOVE deregulation – the workplace. After all, nothing says FREEDOM quite like being so desperate to put food in your belly and a roof over your head that you’ll agree to work for Third World wages in a deathtrap of a workplace.

    *I may have mentioned this before. It was a positively Orwellian bit of policy introduced by our version of the Republican Party in 2005, which essentially turned the whole country into one big “right to work” state. Thankfully, it was pretty much universally hated, and later repealed.

  2. Zosimus the Heathen

    I agree with the rest of your post too. I’m heartily sick of hearing the almighty
    MARKET treated as a veritable god (particularly by Christians who seem to have forgotten that whole “God vs Mammon” thing), and its decisions treated as infallible[*]. We’ve had a whole bunch of privatizations here as well, and, as you’ve found yourself, they never do what the politicians who carry them out (almost invariably against the wishes of the public) promise. Invariably they seem to lead to people paying more and more for less and less, and having to contend with bureaucracies just as bad as those of any government department (if not even worse). In extreme cases, that sort of crap seems to lead to the kind of corruption that exists in the Third World, and which has made that part of the world a perpetual basket case. For example, I once read a book about Cambodia (Joel Brinkley’s excellent “Cambodia’s Curse”) which stated that that country had become so ridiculously libertarian (I’m guessing as a reaction to once practicing such an extreme and horrifying version of communism) that children there had to go to school each day with wads of cash in their pockets, just to bribe their (ridiculously underpaid) teachers to keep educating them!

    *This reminds me of the time a member of our own version of the Libertarian Party did an AMA (ask me anything) on Reddit. One of the participants in that AMA posed the hilarious series of questions: What is your favourite colour? What is the Market’s favourite colour? Should those be the same question? Sadly, they did not get a response.

  3. “After all, nothing says FREEDOM quite like being so desperate to put food in your belly and a roof over your head that you’ll agree to work for Third World wages in a deathtrap of a workplace.” I have seen this argument often enough.
    Heck, I’ve known someone who once tried to argue “slavery is a choice” in that slaves chose to submit rather than die fighting. I presume his point was to minimize slavery’s importance (they could have resisted!) but I didn’t have the stomach to actually discuss it.

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