Poor Mexicans Heart Walmart

[JayB]

"I also said that, if JAYB's consumer cared only about price the way he asserted they did, they might not look at externalities even if they were about to bite them in the face."

 

My assertion wasn't that consumers, however poor they may be, care only about price - it was that they should not be subject to regulations that force them to pay artificially high prices for the things they need (and are most likely already buying elsewhere) by imposing regulatory barriers that prevent competition, and that doing so cannot be justified either on economic or ethical grounds.

 

With regards to "externalities," I think the same liberties that pertain to any other action in a free society should pertain here. That is, we should be free to do anything that doesn't directly injure someone else or infringe on their rights, and the same should apply to whatever we are talking about under the banner of "externalities." Should the law prevent me from stealing from a merchant, and could he claim that the injury that he sustains as a result of my theft is direct enough that it should be illegal? Yes. Should he be able to claim that my choosing to buy whatever it is that he sells from another person who is...willing to give me a better deal on the same legal product that this other guy has on his shelves, I happen to like more, is closer to my home, has nicer help, is painted my favorite color, makes donations to political causes I support etc, etc, etc amounts to an injury/externality that the law should prevent on his behalf? No. This is where I think that you and I differ.

[Peter_Puget]

And thanks for finally explaining what the mandarim class and Coase's theorem have to do with what I wrote.

 

Matt – My point was no less clear at the start.

 

 

However, you still seem to misunderstand: I did not there nor anywhere else have I stated that the only way externalities are going to be taken into account is if intellectuals and civil servants work together to do something good for "the people." I DID say that understanding the cause and mechanisms of acid rain, or the safety benefits of seat belts, came about through the work of "experts" or something like that, and that government intervention was required or I don't think any corrective action would have been taken. I believe this is true. (Do you disagree?)

 

Matt the clear implication of the following:

 

if they are elected representatives DO THEIR JOB and take action based upon a perception of the common good rathern than upon corporate earnings and election contributions.

 

is that based on their (elected officials) determination of the public good actions should be taken even if they were elected by constituents with an opposing viewpoint. How do the elected officials get this new idea of the common good? Anser: Your intellectuals. A good politician follows the common good as necessarily determined by an elite. (Enemy of the People?!?!)

 

Anyway I have said this over and over. If all you are saying is some subjects require a degree of specialization to understand you are saying very little.

Safety is a selling point for many cars. Take Volvo for an example. Go to a dealer and they will hit hard on safety. The perception that they are safer cars has resulted in higher sales prices. Given this it does not seem unreasonable that seatbelts would not have become standard equipment w/o government action.

 

Edited March 11, 2007 by Peter_Puget

[Peter_Puget]

PP, your writing, as clean as it is, nevertheless presents all the class of shit smeared on an outhouse wall. Did you work at your editorial skills or do they just come naturally, you know, sort of like a big dump of corn-filled crap after a Saturday night fish fry? (God all fucking mighty, somebody please, the ignore button, where is it?)

 

[mattp]

Matt – My point was no less clear at the start.

 

I hate to break it to you, PP, but I just looked back at the post in question. After all of this discussion, I still can't understand it. Not your first rebuttal paragraph, anyway. In the second I still see that you think I'm a Nazi.

 

I'm left wondering: do you really believe that it is Nazi [facisism] for a group that may not be composed of those most directly affected to study an issue and try to impact public policy with respect that issue?

[Peter_Puget]

(I just wanted to make one post that didn't cause us to disagree )

 

 

Matt – My point was no less clear at the start.

 

I hate to break it to you, PP, but I just looked back at the post in question. After all of this discussion, I still can't understand it. Not your first rebuttal paragraph, anyway. In the second I still see that you think I'm a Nazi.

 

I'm left wondering: do you really believe that it is Nazi [facisism] for a group that may not be composed of those most directly affected to study an issue and try to impact public policy with respect that issue?

 

Here is my first post mentioning Coase:

 

I have always thought the Tragedy of the Commons was a very poor example of externalities. For the most part it can be avoided through the proper delineation of property rights. A better example would be how my neighbor maintains his/her property. If they the put a lot of effort and money into their property their work would increase my property value. Of course if they parked old cars and washing machines in their front yard my property’s value would decrease. Land owners have often banded together and created “private rules and regulations” to limit this. For example, an area with Sound views may prohibit large trees. Coase’s Teorem formulated well before the Tragedy of the Commons article was developed out analyzing grazing practices essentially states that the externalities disappear with well define property rights regardless of the initial allocation of resources. (the usual caveats apply) so to the extent government (& attorneys too) increase transaction costs they also can have the perverse effect of increasing externalities. “Externalities are not anything unique to “Free Market” and free markets may tend to minimize their impact.

 

While it is not up to Crux's standards I think with a little thought it makes sense. Ah maybe it is this that confused you: “usual caveats apply” by this I meant the traditional impossible to achieve economic assumptions like perfect information and in this case zero transaction costs. In any event it seems a bit out there to think (like you did) that the point of this paragraph was to rebut the idea that externalities are exclusive to free market economies. We will just have to disagree on this one.

 

Matt you saw straw men where there are none and now you claim that I have said that it is Nazi [facisism] for a group that may not be composed of those most directly affected to study an issue and try to impact public policy with respect that issue? I do not recall saying anything of the sort.

 

What I saw as NAZI like in your position is: 1) The contempt you hold for the little guy and those in business 2) How you seem to be so willing for politicians to ignore the will of the people for the “common good”. 3) Your veneration of a specific elite. A post or two above I summarized what you appeared to be saying. I just now highlighted it in red.

 

Edited March 11, 2007 by Peter_Puget

[mattp]

Peter, this is painful. I wouldn't even bother with you if I wasn't stuck at home with a bad back and getting bored.

 

Where have I ever expressed contempt for the little guy or businessmen? Is it contemptful to suggest that the little guy is unlikley to spot many of Prole's externalities by the very nature of the fact that they are externalities?

 

Is it wrong to suggest that there may be cases where our leaders should in fact ignore the will of the people? I believe you may be against nationalized health care while the polls favor it. Would you have our leaders obey "the will of the people?" Or 911: many Americans wanted blood after 911, and they really didn't care if it was in any way likely to reduce terrorism or make us more secure - they mostly wanted us to punish Afghanistan. I believe over half were in support of invading Iraq, too, at least in part because they had been lied to, but that is another old argument we've had on this board. You might have thought it was pretty cool; I think it was a big mistake. History will tell, but I hope our President and his buddies talked about whether or not it was a good idea and not "what do the polls say" went they sent troops to Afghanistan and Iraq.

 

And what is this elite I so wrongly venerate? Experts? If you want to learn about the issue of automobile safety you consult with people who study the matter. Years ago, this included Ralph Nader, who many regard as nothing but a crackpot and whose book "unsafe at any speed" was largely debunked although I think some of that has since been vindicated. However it also included a whole lot of people who were a lot less self-promoting and more cautious in their conclusions. It also included the auto makers, but I certainly wouldn't want our lawmakers to have relied primarily upon information coming from automakers proclaiming that the American industry would be crippled by the enactment of safety standards. Is that contempt for business?

 

I tried for three or four posts in a row to get you to tell me how it was that you think I'm a nazi and what did Coase's thoerem have to do with this. It takes a lot of effort to get you to say what you mean, and meanwhile you call me names and I return in kind. This is nutty.

 

Heil Hitler.

[mattp]

Ok, Jay. Where you been?

 

I would agree in principal that consumers should not be subject to regulations that force them to pay “artificially high” prices for the things they need. I’m afraid we’ll disagree until the end of time about whether standards applied to US markets in necessities – stuff like food and clothing – impose “artificially high” prices. For example, I bet you’d say that rules regarding flame retardant baby clothes or labeling standards for food or a myriad other things are anti-competitive impediments foisted upon business and that these kinds of requirements create artificially high prices. If not these particular regulations, we could easily find others.

 

I can’t fully figure out what you are saying about externalities in your second paragraph. I agree that the merchant has a right to a law saying shoplifting is illegal. I agree that we should be free to do anything that doesn’t injure someone else or infringe on their rights, but I would include indirect but demonstrable harm among the externalities that generally require some kind of disclosure and maybe regulation.

 

I also think that businesses do not and should not enjoy the same "rights" as individuals. Because it is an artificial entity, the owners of a Corporation get built-in liability protection. Business also gets a great deal of support from the State - whether it is the provision of utilities and a legal system way beyond what normal "consumers" require, direct tax breaks, or indirect subsidies, or ... (on and on). The externalities associated with many buiness operations are way more damaging and certainly more remote than those stemming from a neighborhood of consumers: the increased nitrogen flowing into the nearby river or the CO2 and particulates heading into the sky from 100 chimneys, the toxic waste from discarded florescent lights or the additional burden placed on local public health resources. Here I am sure we disagree, but I believe that regulations are absolutely necessary in most business activity and the net effect is positive even though many business regulations are certainly clumsy or imprecise.

 

I also believe it is fair to regulate business. We subsidize business activity at virtually every level from the kid mowing yards to Boeing, and there is nothing wrong with requiring the kid to use weedkiller properly or to dispose of his clippings or his crankcase oil in a responsible manner. Similarly, it is fair to require Boeing obey labor standards, comply with environmental regulations, etc. etc. etc.

[Peter_Puget]

Peter, this is painful. I wouldn't even bother with you if I wasn't stuck at home with a bad back and getting bored.

 

 

I tried for three or four posts in a row to get you to tell me how it was that you think I'm a nazi and what did Coase's thoerem have to do with this. It takes a lot of effort to get you to say what you mean, and meanwhile you call me names and I return in kind. This is nutty.

 

Heil Hitler.

 

Ya Matt it is painful but in this case the meds must be impacting your comprehension.

 

Here is the part of my inital post where I reference NAZI:

In your first sentence you come very close to discovering a real truth but then you descend into something close to being a NAZI.

 

I did not say you were a NAZI but that you were getting close. Coase theorem related to externalities in general. The NAZI comment on how you would deal with them. That you cannot see the distinction is a failing on your part not mine.

 

In you last post addressed to Jayb you wrote:

I agree that we should be free to do anything that doesn’t injure someone else or infringe on their rights, but I would include indirect but demonstrable harm among the externalities that generally require some kind of disclosure and maybe regulation.

 

How would you determine harm? This is far more complicated than you think. Eventually you would have a increasing body of regulation and administrators to manage the process. The regulations themselve would cause increasing negative externalities. (for example: increasing mandated pollution controls => loss of employment => loss of tax base=> poor eduction funding) Leading to more regulation and attempts to revalue harm. While the commies tried to eradicate capitalism altogether the national socialists tried to tame it via an unholy alliance of corporate institutions mediated by an intellectual/political elite.

 

Oscar Lange once wrote:"The real danger of socialism is that of a bureaucratization of economic life. Unfortunately, we do not see how the same or even greater danger can be averted under monopolistic capitalism."

 

Somebody else once called it the Road to Serfdom.....

 

 

 

[mattp]

Ya Matt it is painful but in this case the meds must be impacting your comprehension.

 

...

 

In you last post addressed to Jayb you wrote:

I agree that we should be free to do anything that doesn’t injure someone else or infringe on their rights, but I would include indirect but demonstrable harm among the externalities that generally require some kind of disclosure and maybe regulation.

 

How would you determine harm? This is far more complicated than you think. Eventually you would have a increasing body of regulation and administrators to manage the process. The regulations themselve would cause increasing negative externalities. (for example: increasing mandated pollution controls => loss of employment => loss of tax base=> poor eduction funding) Leading to more regulation and attempts to revalue harm.

 

First of all: F*CK YOU. You complained that I was flippant in my first post responding to Jay, but you have gone out of your way to include smarmy insult or innuendo in most if not every post.

 

Second of all: I see where you are going with the above. Pollution controls certainly increase the cost of doing business. This may in some cases lead to a reduction in business activity or higher prices to consumers. However, I'm not sure the cause and effect relationship is always as you have described. For example, there is a profitable industry associated with environmental clean up and installing scrubbers and etc. and while some industrial operations have closed or shrunk as a direct result of environmental standards, I'm not entirely sure of the net affect on tax base or productivity. In addition, the higher cost of a refridgerator that results from environmental regulation is certainly reflected in the purchase price, but one could say this may only be reflecting the fact that some of the externalities are now includeld in the price. And as far as I know, Amana and GE are doing OK.

[Peter_Puget]

First of all: F*CK YOU. You complained that I was flippant in my first post responding to Jay, but you have gone out of your way to include smarmy insult or innuendo in most if not every post.

 

 

 

Again you are simply wrong. I wasn't complaining about your flippancy to Jayb. You wrote: I guess your economic theory professor has never told you about the tragedy of the commons.

 

Later I responded:"For grins I just ran a Google search on Tragedy of the Commons and in the first link shown guess what? Coase is mentioned. How odd that you tell Jayb in a smart ass manner to look up Tragedy of the Commons and then ridicule me for bringing up Coase. Pretty lame."

 

 

 

 

Second of all: I see where you are going with the above. Pollution controls certainly increase the cost of doing business. This may in some cases lead to a reduction in business activity or higher prices to consumers. However, I'm not sure the cause and effect relationship is always as you have described. For example, there is a profitable industry associated with environmental clean up and installing scrubbers and etc. and while some industrial operations have closed or shrunk as a direct result of environmental standards, I'm not entirely sure of the net affect on tax base or productivity. In addition, the higher cost of a refridgerator that results from environmental regulation is certainly reflected in the purchase price, but one could say this may only be reflecting the fact that some of the externalities are now includeld in the price. And as far as I know, Amana and GE are doing OK.

 

Now Matt let's look at GE some more...for example GE has moved much of its manufacturing outside of the US. GE has reduced retirement benefits for its employees. GE is changing from a manufacurer into a finance compnay. Of course the ownership still has a great return on their investment; however, the decline in US workers wages resulting from the loss manufacturing increases the distance between the rich and the non-rich. It looks like the rich are getting richer and the poor poorer! What's the solution? Raise taxes! Force Walmart to pay for health insurance......

[ashw_justin]

Should he be able to claim that my choosing to buy whatever it is that he sells from another person who is...willing to give me a better deal on the same legal product that this other guy has on his shelves, I happen to like more, is closer to my home, has nicer help, is painted my favorite color, makes donations to political causes I support etc, etc, etc amounts to an injury/externality that the law should prevent on his behalf? No.

 

He [the shopkeeper] can claim whatever he wants, just as the consumer can purchase any "legal product" that they want.

 

In the corporate world, "legal product" means something only due to constant regulation by the government that we have appointed to protect us, against the constant drive to offer products which maximize profit for the corporation, at usually certain expense to the society as a whole*. Anyone has the right to oppose the way in which a corporation does business, going as far as lobbying to redefine the legality of it. Now the likelihood of that succeeding is directly related to political influence, and the validity of the arguments made by the "leftist intellectuals," which under a democratic system depends ultimately on the people/public opinion. If support is too weak, then the lobbying will fail. End. Of. Story.

 

(*which I refuse to refer to as "externalities" because that sounds like a word invented for the purpose of making it easier to disregard the adverse effects of business.)

 

JayB this was almost your point at the outset, and I'm almost guilty of a "strawman"...

 

Glad to hear that the poor people in Mexico are using their collective buying power to tell the coalition of Leftist intellectuals and price-fixing retailers to STFU.

 

But in what society do you live where people who take exception to corporatocracy should just STFU? Your clearly biased opinion shows through a veneer of fairness. Don't pretend to care about the poor--your concern is that people are lobbying against a business, a vile sin under the free market dogma.

 

So, explain to me how the criticism of free market capitalism, and concern over the local impact of building a corporate box store, is socially or politically invalid? It sounds like you are promoting a world governed solely by the theories of free market capitalism, instead of one in which people have a right to participate, debate, and shape the society in which they live, whether the almighty Dollar agrees with it or not.

[mattp]

So, explain to me how the criticism of free market capitalism, and concern over the local impact of building a corporate box store, is socially or politically invalid?

 

It is the footwear that makes the whole thing invalid. They wear Birkenstocks for Christsake! If the American Enterprise Institute takes the opposite stance, it is totally valid.

[JayB]

First the general:

 

I have never argued against the notion that law, in the form of regulations, are unnecessary for a market economy. It's clear that just as laws governing and restraining the conduct of individuals in order to prevent them from depriving their fellow citizens of their rights and liberties, regulations are necessary for the maintenance of a functioning marketplace. This is clearly not the point of contention here, although one would never know this from the number of rebuttals that have thus far been offered up to this point of non-dispute.

 

Now to the specifics:

 

With respect to "big box" retailing here or anywhere else, we are not talking about someone trying to generate excess profits by selling goods which are illegal, adulterated, or engaging in any attempt to deceive or harm them. We are talking about a merchant who is able to sell items which are similar or identical to those already on the market at a lower price. The critics of these retailers have claimed that the availability of the said items at a lower price will generate harmful consequences that outweigh the benefits of generated by the lower prices. I have simply stated that those claims are either false, disingenuous, or the harm in question is so nebulous and subjective that it is best evaluated - both on economic and ethical grounds - by the local consumers themselves instead of those who presume to speak on their behalf. You make not like or agree with the choices that they make when they decide where to shop, just as you may not like what they say, or how they vote, but not liking these actions is one thing, and imagining that you have the right to restrict or deny them the right to do any of these things is quite another. This is where we may differ.

 

[ashw_justin]

I'm much more inclined to agree with you on the grounds of social justice than on any economic principle. A person has the right shop wherever they want--totally valid argument. However, I think it's equally valid for someone to argue that they don't want to see a Walmart go up in their community. For every person who wants to pay less, there may be another person who doesn't want a box store in their town. You may not respect their reasons, but they do have a right to oppose it through any legal means available.

 

As an aside, for every 'price-fixing retailer' there is a greedy developer pulling the same strings in the local government. No town should be a developers' amusement park, or a virgin canvas for the corporate masterpiece. Development is regulated and subject to the scrutiny of the community. A town ruled by the free market is a slave to the dollar (or appropriate currency), its people left with no say in the way their community develops. Suppose in this case that they don't want the 'buying power' of their community bleeding out through a strip-mall artery to a far off land, never to be seen again.

 

There are always compromises--absolute freedom is an illusion. There is no right or wrong on this issue. Some will get what they want, and others will get screwed, but in the end the community will decide what is best for itself, whether or not this agrees with free market principles. There are plenty of examples of special expenses being levied on the general public to appease the desire of the community as a whole. I could buy a lot more shit at Walmart if I didn't have to pay these school levies, but the community decided to pull some money out of my pockets for the greater good. I am forced to pay these taxes because I live in a community that doesn't accept illiteracy, just as your poor Mexican might be forced to forgo big savings in a community that doesn't accept Walmart. (Although for the sake of argument I am willing to concede that illiteracy is probably worse than Walmart.)

 

But I can't stand to restrain my own leftist intellectual bias any longer-- The tragedy of the box store is that the customers will be dazzled by lower prices for long enough that the local businesses shut down, but will not realize that they are actually buying shittier products, getting abysmal "service", hemorrhaging the value of their local economy to non-local interests, and irreversibly changing their communities for the worse, until it is too late. I call it the "Reliably Tunnel-Visioned Price-Seeker Theory," although the corporate elite appear to have already come up with this theory and made billions off of it.

[pink]

walmart used to be a local five and dime shop.