Originally Posted by MicroNix
Choice is good. Competition is good. I only wish Apple fans would be able to see that.
Competition is good, competition drives innovation and progress.
These and similar statements are regularly declared as absolute facts especially by USians and yet they demonstrably aren't in many cases. I suggest that competition is like a tool or process, it depends how it is used and it can be used for good or evil.
Most of what we have is less than optimal, much of it is junk, 'competition creates junk' arguably is just as true as 'competition drives innovation'. A company may make a top product, top quality ensuring a decent product life, low maintenance, good support and whatever else goes in to making a good product. Competition brings in another company that trims a bit here and there and offers a lower price point, say 25%, and that is taken back usually more so over the life of the product or the lack of life because it craps out sooner. The fragmentation of the market means that the quality manufacturer can not take advantage of the economies of scale that would accrue if the lowballing competition was not there so the end user is the loser.
In reality what usually happens is that there will be a number of cheap competitors shaving prices and seeking to differentiate their products and persuade people to buy them, with a 25% cost saving they can put some of that towards advertising. Now in many industries, and people in business will know this or can easily find out with a little research, the advertising spend is recommended to be 10% - 15% of revenue. So as a consumer for 12.5% less you end up with a product that is 25% worse and that 25% will be paid back in time with higher maintenance and more rapid depreciation. So the cheap junk is actually much more expensive.
Shopping is a cost, takes my time, I'd rather be doing something else. Every time I feel the need to buy a new cell I spend a few hours checking things out and making a decision. I would much rather be happy with one for a few years and save those hours to spend doing something more rewarding. If I hear of a new feature that sounds great yes maybe I'll buy a new one sooner, when I hear means from a real person, in real life, on a forum or blog or even a review in the press each opinion naturally weighted for the credibility of the source. Advertisements are not good sources of information and get ignored, I have to pay for them anyway in the cost of the products that I buy I sure as hell don't want to pay for them in time too.
Advertising is a propaganda tool, persuading people to accept it throughout their lives is essential for those who want to tell us untruths. Advertising was never as pervasive as it is now, there are still some laws prohibiting advertising in some places and for some categories of products but much has been repealed over the last few decades. The promise of cable TV was pay a subscription and get no advertising, that didn't last long.
The most offensive abuse of competition and advertising is food. Most food is junk, people know it is junk and still eat it, what passes for food is far from what one should be eating and nothing like what your great grandparents ate for mostly they ate organically grown local food. Powdered corn and soya glued back together with some artificial colour and flavour is not good food. It appears to be cheap but is actually very expensive for remedies for the ill effects far outweigh paying double or triple for proper food. Visits to the gym are likely to be needed, spending money and time, to get rid of excess fat. Personal hygiene products are needed to dispel the odours created by junk foods, need medical treatments attempt to ameliorate the effects of junk foods. Constantly pushing surplus through the dietary system wears it out faster, shoes wear out faster carrying more weight, chairs need to be wider, transportation takes more fuel and millions of other tiny incremental expenditure increases result from bad food.
Real good food would cost less than the aggregate costs of junk food with economies of scale in food production and savings in overheads and remedial costs. Plus the benefits of more healthy time to profit from work or simply to enjoy the pleasures of life.
Competition is not necessarily good but a monoculture is undeniably fraught with great danger, I don't argue for either and anyway that is not the problem. Companies should exist to create benefit for their customers, to do that they need to pay their overheads, have a reserve to maintain operations in tough trading conditions, pay wages including to the owner who is also perhaps due some additional reward for taking the risk. Instead companies' primary obligation is to return profits for the shareholders and this takes precedence over doing the right thing by their customers.
Companies driven by the urge to make great products usually do, they usually are managed by the owner or founder. With good judgment, dedication and the customers benefit as the first priority a company can rise from nowhere to lead an industry in just a decade. The worst aspects to deal with are the dirty tricks from the competition, they may have to be avoided, addressed and rebutted but must not divert the focus of attention away from building great products otherwise they have won.
Most companies are controlled by the bankers, by Wall Street and the City of London, they aren't interested in the good of the consumer, they are interested in buying their next Lamborghini, Cartier or island in the sun. They have no loyalty to the company and less to the company's customers, their loyalty is to the dollars. They also like the power that they gain from advertising and control of the media.
Competition vs monopoly is not the question neither is conservative vs socialist the structural changes that are required need to address the problems of expensive junk and lack of quality information. The financial system which is designed to remove control of companies from the founders to the bankers needs to be addressed with more equitable distributions of money and responsibility. Ownership of the media the gatekeepers to information and funding of the media by advertisers in other words the corporations controlled by the bankers needs to be addressed.
Competition only works when there is real competition, the vast majority of companies are controlled by the same group of people, the bankers, and competition between such companies is an illusion. Competition as it is currently perceived and enacted does not benefit the people of this planet just a select few.