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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: portage who wrote (7479)	8/21/2001 5:20:07 PM
From: Maurice Winn	Read Replies (3) \| Respond to of 74559

Portage, I understand the arguments about the need for state intervention, control, regulation, rationing to avoid profiteering in monopoly situations and as the decades have rolled by I have always learned that governments hash it up. They would be better to just drink gin and chase women [or go shopping in the case of women politicians]. Unfortunately, in a democracy, mob rule rules and power-hungry people always feel the need to do something and tell other people what to do. They are voted to power by ignorant populations who are largely cargo-cultists. The very structure of democracy means that diffuse costs and concentrated benefits causes wacky vote-buying decisions. Politicians try to give some sop to everyone, at the expense of all the rest. So, the allegedly greedy monopolists need to be restrained, in the minds of the cargo-cultists. However, there are easy entries to the market and freely available substitutes. There are Capstone turbines, gas instead of electricity, insulation instead of heating, efficient lights instead of inefficient lights. There are millions of ways to erode electricity demand if the price becomes too high. People can wear warmer clothes. If the monopoly is all that great, people should buy shares in the company, or invest in competitors who set up in business to bleed the monopoly. Once politicians start setting rules, there is no end to it because they need more rules to fix the leaks which inevitably spring out somewhere. Taking people prisoner, which is what regulation, control, rationing, intervention and power are about, is never a good way to get an economy zinging along. Buyers and sellers do NOT need a government bludger as a middle man. If voters dictate that a supplier shall be paid only a certain amount, the outcome is obvious = the supply will dwindle if the suppliers can make more money doing something else. If they are not allowed to build more capacity, and the price is fixed at a low level, then there will be shortages. Start at the beginning and remove all regulations other than environmental protection and other third party protection. You will find the shortage disappears overnight. New Zealand is in the midst of similar madness right now. We will have blackouts next winter. I am paying only half the cost of the electricity I use, in the midst of serious shortage. The government and retailers are spending a lot of money to get people to conserve electricity [to maintain water supply in the hydro dams]. I ignore them and use as much as I want to. If they want to transfer money from the electricity shareholders to me, that's fine by me. I will use what I want and pay them quarter of what they should be charging me. It's hilarious. Cargo-cultists are endemic in New Zealand and have a large voting majority. They have just had a 'Catching the Knowledge Wave' conference in Auckland. They want to make Kiwiland into a knowledge economy. It doesn't occur to them, but knowledge people don't want their computers or offices or houses getting electricity cuts. They won't set up shop in a country where water, electricity and other government-caused shortages and high costs are endemic. Do you have any links which would persuade me that Californian price controls and other government interventions are a good idea? I've read a bit about what's going on and everything I read confirms what I think. Every transaction is a monopoly. A transient monopoly. Really big profits can come from long-term monopolies such as state control of the money supply, CDMA and other patents which everyone on earth would like to use. Small profits come from brief monopolies such as a row of shops selling the same item. Each shop has an instantaneous monopoly on the prospective customer's time when the customer is in the potential supplier's shop. Because the customer can, at a small cost, walk next door, the monopoly profit the shop can get is related to the value of the time to the customer of walking next door. Most people have trouble with the concept of all transactions being monopolies. Sure, we can arbitrarily define a monopoly as having to involve a company with more than a certain market capitalisation or products with a particularly important use. But those are capricious, unobjective definitions. It would be better to just leave buyers and sellers to set their own terms. If one or other don't like it, they can take a hike! Mqurice