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Free Markets Aren't
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Author Topic: Free Markets Aren't  (Read 18127 times)
Heq
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« Reply #15 on: February 26, 2009, 12:46:55 EST »

Just to be a jerk...

Moore has the intellectual honesty of Gonzo.  I move we put both of them in a pit and force them to fight, with the winner being allowed to devour the loser.  The winner would then be shot.

Anyway...

The problem from where I sit looking at the American system is the costs.  The easiest way is not to get all spas-tastic, but to give the right to perscibe for simple afflictions to nurses.

Ta-da!  Money saved!  This is why they pay me dozens of dollars for my input.  If you have an infection you may not need to see a doktor to get anti-biotics, as he will just say "Here, take these, fuck off."
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"No common man could believe such a thing, you'd have to be an intellectual to fall for anything as stupid as that."-Orwell
wodan46
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« Reply #16 on: February 26, 2009, 13:05:49 EST »

Quote
Well, I know Michael Moore made a film about this, but I'm not sure that makes it true.  Even if it is true all that it mainly a problem with the legal system in the US.

I haven't seen "Sicko". My knowledge of the situation comes from conversations with Americans and various US media. To me, it's pretty much mind-boggling how these guys get screwed by the insurance companies.
I have.  Regardless of Michael Moore's honesty, he hardly needs to lie to make the American Healthcare system look bad, and I've had little reason to believe that what is said in the movie is anything other than true, and little reason to believe that the counterarguments (such as long wait times) are anything but myths.

What people don't seem to get is that not helping sick and uninsured people incurs far higher costs than helping them does, because we still have to pay the emergency room fees, we have to pay for their worsened sickness rather than the early sickness, and we have to pay for their loss in productivity and wellbeing.  US spends a greater percentage of its GDP, than any country in the world on healthcare, only for it to neither have universal healthcare, while also ranking 37th in the world for its quality to those it does give to.
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The plural of "anecdote" is "anecdotes". Not "data".
Medivh
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« Reply #17 on: February 26, 2009, 18:57:50 EST »

Heh. Universal health care would actually reduce government power, if taken from the overall view... Irony, how I love thee.
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And if i catch you comin' back my way
I'm gonna serve it to you
And that ain't what you want to hear
But that's what I'll do
-- "Seven Nation Army", The White Stripes

So what you're telling me is that LTV's fudge factor means more than it's independent variable?
Yes...
Current
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« Reply #18 on: March 03, 2009, 07:57:49 EST »

Quote from: Ihlosi
Quote from: Current
I'm sure many would have continued to downplay the risks yes.  A business that adopts seat belts though can advertise them and point out the protection they afford.  This is what Saab and Volvo did in the 1960s in Europe.

Customers can choose whether to examine the products they buy carefully or not.

That would require near-perfect information on the side of the customer. Which, even without any interference by the businesses, is an untenable premise. Taking marketing into account, it a downright ridiculous premise.
To say you're exaggerating would be putting it mildly.

This doesn't require "near-perfect information".  All that it requires is that the customer be alert to what he or she is buying.

Quote from: Ihlosi
Quote from: Current
What about profit?  Are there not many situations where profit gives businesses reasons to improve their products.  I know there are where I work.

There are situations where profit gives businesses reasons to improve their products, but also situations where making inferior products results in higher profits, at least temporarily (and that's all that counts for the manager making the decision).
I don't think that temporary profits are all the counts.  If the owners find out that the profits are only temporary and will be followed by loses then they will not give their consent.

I think that doing this is much too difficult in large companies.  But that is mostly down to laws put in place to limit the power of shareholders.

Quote from: Ihlosi
As a recent example, see the "big three".
Do you mean the big three car manufacturers in the US?  In what way are they an example?  The only reason they're still in business is government handouts.

Quote from: Ihlosi
Quote from: Current
Also, you fail to really compare the situation to its alternative.  Governments too have many reasons to downplay risks, and they often have.  Just as the "profit motive" often gives reasons to downplay risks, the "vote motive" does the same.  (It is also true that both parties have reasons to play up risks for example organic food companies play up the risks of ordinary food and the US government constantly played up the risks of the USSR in the 1950s and 60s).

A good point. However, in government, you usually have an opposition that has an interest in not playing that game, while whole industries depend on basically every single corporation downplaying the risk of their product, even without the need of any collusion since each business will arrive at that decision independently.
Government are not really that different to private industry here.  During the cold war both parties played up the risk posed by the soviets.  Both had a common interest in doing so, it garnered them more power.

The same is true today.  For example, in Britain there have been some embarrassing scandals recently.  Some Lords who are members of the Labour party were caught rather obviously offering to change the law for a fee.  The opposition parties mentioned this, but didn't make a fuss about it.  The leader of the opposition could have made it big news by attacking the government at prime ministers question time, he didn't.  The most likely explanation is that the opposition have being doing similar things.

There has been another scandal about MPs expenses.  A cabinet minister and a few others were caught fiddling their expenses.  These expenses claims were for second homes, in Britain an MPs second home near parliament is financed by the taxpayer.  Now an attempt is underway to prevent the location of these second homes being revealed.  It is an opposition MP that has come up with this proposal.

A fourth example would be the government debt of western economies.  In most parties of both sides play down the significance of the debt.  They rarely mention the huge amounts of tax go into maintaining it today.  They do this because it suits their collective interests.

So, party politics is often very similar to an industry.  Industries though often have more competition than party politics does.

In both cases the driver for change often comes from outside.

Quote from: Ihlosi
See the tobacco industry, for example. If they hadn't been slapped down hard repeatedly, they'd still be trumpeting that smoking does not affect your health adversely, or is beneficial, even. No tobacco company by itself would have any interest in actually saying the truth.
No tobacco company would have done no.  That doesn't mean though that others would not have had said it.  In fact, this is what happened.  Tobbaco was revealed to damage health long before tobacco companies admitted it.  Doctors and people in the healthcare business showed it.  Government and private parties both played a part here.

Also, the situation with tobacco companies is different.  They claimed their products were safe to use when in fact they were not.  This is quite justifiably illegal.  This is not the same as the car companies.  The car companies failed to mention that their cars could be made safer by seat belts.  In my view this is not something that can be legislated against.  With any product there are ways that it can be improved that the manufacturers don't mention.  If they had to mention them all a small book would be required with every product sold.

Quote from: Ihlosi
Here's a very simple example: Health insurance company A tries to spread risk among its customers and to offer insurance to pretty much everyone without asking detailed questions. Health insurance company B tries to optimize their profits by cherry-picking whom they offer insurance to. Of course, company B can offer lower prices to its customers and basically siphon away any customers of company A that meet their criteria. The business model of company A ceases to work, because they end up being stuck with risky customers only. Ultimately, their choices are either to adapt their prices to the increased risks (which will make them lose customers as many won't be able to afford the insurance anymore, and possibly drive company A out of business altogether), or adapt the business model of company B and start cherry-picking their customers, or start hemorrhaging money and eventually go out of business. Any halfway sensible manager will pick the second option, because it's the best bet for future profitability of the company.
I agree to some extent.

Those customers who are good risks pay lower premiums, those who are bad risks pay higher premiums.  There are different market segments for the varying levels of risk.  High risk customers must pay more, low risk customers less.  Is there anything really undesirable about this?

Surely the situation where the low risk customers pay higher prices to subsidise the high risk ones is worse?  That is exactly what you have argued in the thread about the drugs ban.  The drugs ban is set up to serve a similar end to price discrimination by insurers.  The difference is that government works using prisons and police and businesses use questionnaires and fines.

Quote from: Ihlosi
Quote from: Current
You're belief in Democracy is touching, but not reasonable.  Certainly the voter has power, but only a tiny, tiny portion of it.  So little they have no reason to use it wisely.
Over the decisions of a company, you only have as much power as you own stock.
Well, you have some as a customer.  The main difference though is that you have much more control over what businesses you deal with than you do over what governments you deal with.  I've dealt with many thousands of businesses in my life.  I've only dealt with two governments though.

Quote from: Ihlosi
Quote from: Current
The individual voter is not the same as the electorate.  Defying government can be very dangerous for an individual voter in a situation of mob rule.
That's why elections are supposed to be secret.
You missed what my criticism of Wodan was.

He said:
Quote from: wodan46
In the mean time, for the Social Democracy, the power is always in the hands of the voter.  They suffer no consequences for defying the Government, in fact doing so is liable to replace it with one more amenable to their wishes.
What I mean here is that the power of the electorate is not the same as that of the individual voter.  I think folks on this forum are apt to mistakenly think of people as a sort of homogeneous mass that are essentially alike and have common interests.

If a single individual defies the government in the polling booth then that is certainly completely safe.  That wasn't my point, my point was that it is not safe otherwise.  Not unless there is some sort of agreed minority protection.

Quote from: Ihlosi
When dealing with a company you do not necessarily have to "abstain" from the services.  You can pick another supplier.
Yes.  And if that is the case for some necessary good provided only by a monopoly then there is a case for government involvement.
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Ihlosi
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« Reply #19 on: March 03, 2009, 08:47:38 EST »

This doesn't require "near-perfect information".  All that it requires is that the customer be alert to what he or she is buying.

Simply being alert isn't enough in many cases, especially when products are concerned that are significantly more complex than, say, a lightbulb. Specific knowledge may be required to understand available information, or important information may not be available at all. You cannot expect everyone to be a combination of physicist, chemist, engineer, physician, and lawyer, and at the same time have access to even the most obscure sources of information.

Quote
I think that doing this is much too difficult in large companies.  But that is mostly down to laws put in place to limit the power of shareholders.

Unfortunately, this is all too true. There's quite a bit of evidence out there that companies that are owned by a small group of people are doing better in the long term than companies owned by a large number of fairly faceless entities. Another unfortunate issue is that you can clobber your competitions long-term strategy by just being successful enough in the short term.

Quote
Do you mean the big three car manufacturers in the US?  In what way are they an example? 

They're an example that you can keep a company afloat for quite a while with inferior products coupled with lots of marketing. If they had kept up with R&D, they wouldn't be that dependent on government handouts now.

Quote
So, party politics is often very similar to an industry.  Industries though often have more competition than party politics does.

That depends on the election system. If you have one that favours two big parties, then yes, you'll end up with too little competition.

Quote
Those customers who are good risks pay lower premiums, those who are bad risks pay higher premiums.  There are different market segments for the varying levels of risk.  High risk customers must pay more, low risk customers less.  Is there anything really undesirable about this?

If it leads to significant portions of the population being without coverage due to circumstances they cannot control (unlike most other forms of insurance where you do have more control over the risk you represent), then yes, this is highly undesirable. At that point, you will have to make a decision: Either only offer any kind medical service (including emergency care) to people who can prove that they can pay for them (bad, and hopefully I don't have to explain the reasons), or have some sort of hidden, messy socialization of the costs like it happens in the US, where the cost for treating people who can't pay is slapped on the bills of people who can (also bad, since it penalizes the people who had an actual occurrence of needing medical care, instead of everyone who is at risk of needing medical care (i.e. everyone)).

Quote
Surely the situation where the low risk customers pay higher prices to subsidise the high risk ones is worse?

If insurance companies play the optimization game to the very end, you'll end up in a system where your premium is equal to your insurance payout + X% + Y, and you don't end up subsidizing anyone. That's not the job of an insurance company, and you'll have to agree that that would be "insurance" for stupid people.

The main business of an insurance company isn't to look at individual risks, it's about pooling risk and reaping the benefits of simple statistics, i.e. the fact that the standard deviation only rises with sqrt(n) when you add up n identical random variables. If you have the mean and the standard deviation of usual insurance cases in the field, you can come up with an amount for the premium without looking at individual risks.

Also, I don't think that people should be penalized for risks that they cannot control.

Quote
Yes.  And if that is the case for some necessary good provided only by a monopoly then there is a case for government involvement.

Well, there's plenty of people out there who cannot get health insurance from a private company due to being undesirable. (Alibi "offers" that come with sweeping coverage exclusions at inflated prices don't count.)
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Medivh
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« Reply #20 on: March 03, 2009, 19:09:51 EST »

Quote from: Ihlosi
Quote from: Current
I'm sure many would have continued to downplay the risks yes.  A business that adopts seat belts though can advertise them and point out the protection they afford.  This is what Saab and Volvo did in the 1960s in Europe.

Customers can choose whether to examine the products they buy carefully or not.

That would require near-perfect information on the side of the customer. Which, even without any interference by the businesses, is an untenable premise. Taking marketing into account, it a downright ridiculous premise.
To say you're exaggerating would be putting it mildly.

This doesn't require "near-perfect information".  All that it requires is that the customer be alert to what he or she is buying.

And "being alert" requires near-perfect information. For instance: recently there were kids toys called Bindeez. A lot of kids wanted them, and they looked like a good buy, being cheap and reusable. Clearly entertaining as well.

Turns out that, when swallowed, they turned into GHB. The only way to know that you were potentially dosing your kid with GHB, though, was to know that the Chinese factory had cheaped out in a particular way.

Similarly, without near-perfect information, you might not know that the leather seats in a 199x model of car y had been treated with carcinogenic gunk. Or that "free-range" eggs usually aren't. Forget "free-range" meat, that's usually a total lie. And these are just the ones that I personally know about.

Quote from: Ihlosi
Quote from: Current
What about profit?  Are there not many situations where profit gives businesses reasons to improve their products.  I know there are where I work.

There are situations where profit gives businesses reasons to improve their products, but also situations where making inferior products results in higher profits, at least temporarily (and that's all that counts for the manager making the decision).
I don't think that temporary profits are all the counts.  If the owners find out that the profits are only temporary and will be followed by loses then they will not give their consent.

I think that doing this is much too difficult in large companies.  But that is mostly down to laws put in place to limit the power of shareholders.

Quote from: Ihlosi
As a recent example, see the "big three".
Do you mean the big three car manufacturers in the US?  In what way are they an example?  The only reason they're still in business is government handouts.

Exactly. The managers found that SUVs sold well, and despite being cheaper to make they could be sold for more than a sedan. Everyone's happy, managers are getting bonuses like crazy.

Then the market shifts, as it was always going to. SUVs aren't making profits any more, but the managers who were in charge no longer care because they're not middle management any more. The managers who are in now don't think anything can be changed to make things better, because SUVs have such a big profit margin on them. Suddenly no-one cares about being the biggest on the road, and only cares about fuel economy now. Japanese car companies, which have always had a market for their efficiency, are now selling massive numbers while the big three have stock rotting in warehouses.

Another example involving temporary profits and the big three is GMAC.

The temporary profits won over good sense in the big three, and that's why they're in the hole right now.

Quote from: Ihlosi
Quote from: Current
You're belief in Democracy is touching, but not reasonable.  Certainly the voter has power, but only a tiny, tiny portion of it.  So little they have no reason to use it wisely.
Over the decisions of a company, you only have as much power as you own stock.
Well, you have some as a customer.

Lies, which you have repeated after they've been refuted. A customer on their own has less power than a voter on their own. The bits I've deleted are largely irrelevant.

Quote from: Ihlosi
Quote from: Current
The individual voter is not the same as the electorate.  Defying government can be very dangerous for an individual voter in a situation of mob rule.
That's why elections are supposed to be secret.
You missed what my criticism of Wodan was.

He said:
Quote from: wodan46
In the mean time, for the Social Democracy, the power is always in the hands of the voter.  They suffer no consequences for defying the Government, in fact doing so is liable to replace it with one more amenable to their wishes.
What I mean here is that the power of the electorate is not the same as that of the individual voter.  I think folks on this forum are apt to mistakenly think of people as a sort of homogeneous mass that are essentially alike and have common interests.

If a single individual defies the government in the polling booth then that is certainly completely safe.  That wasn't my point, my point was that it is not safe otherwise.  Not unless there is some sort of agreed minority protection.

And why would you assume that a reasonable social democracy wouldn't have such protections?
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And if i catch you comin' back my way
I'm gonna serve it to you
And that ain't what you want to hear
But that's what I'll do
-- "Seven Nation Army", The White Stripes

So what you're telling me is that LTV's fudge factor means more than it's independent variable?
Yes...
Current
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« Reply #21 on: March 04, 2009, 08:06:02 EST »

Quote from: Medivh
Quote from: Current
Quote from: wodan46
Take something like the Seat Belt.  Car companies fought tooth and nail to prevent it from being an enforced requirement.  Why?  Not because it would've cost them much money, but because it would've indicated that Cars are dangerous without them.  If Car companies had not been forced to implement Seat Belts, they would have simply continued to downplay the risks, and customers would have had to deal with it.
I'm sure many would have continued to downplay the risks yes.  A business that adopts seat belts though can advertise them and point out the protection they afford.  This is what Saab and Volvo did in the 1960s in Europe.

Interesting fact about Volvo:
Volvo has a reputation in Australia for safety. I don't know about overseas, but in Australia, if you're paranoid about crashing your car it's likely that you're going to buy a Volvo.

Why?

Because back in the day, safety standards were introduced, meaning that car manufacturers had to make sure that the car wouldn't dump the engine block on the driver's lap in a crash. Volvo, seeing that they may as well get some PR out of this, and launched an ad campaign saying "Look! We're so safe, our cars come with x, y and z!"

Other manufacturers didn't bother, thinking that the Australian public would be more interested in acceleration, and thinking that adding safety features would decrease this.

To this day, Volvo advertises based on safety features, where others advertise based on "cool factor". To this day, the safety features very rarely differ between manufacturers.
Across the world Volvo have a good reputation for producing safe cars.  It is something they have promoted all over the world for decades.  Many other manufacturers are just as good today though.

Quote from: Medivh
The free market doesn't work when customers are expected to find this kind of thing out for themselves.
I don't think that is true.  What you haven't mentioned is that Volvo often added safety features that were not required by regulations.  Some features governments demanded first and manufacturers added.  Others manufacturers added first and governments demanded later.

My own car has several safety features there is no regulatory requirement for.

What I'm saying here is not that the "customers are expected to find this kind of thing out for themselves".  I'm saying that the manufacturers should not be burdened with a requirement to inform customers about possible improvements to their products.  That doesn't necessarily mean that customers must find out themselves.

Clearly the market does work in this sort of situation.  This is the situation that has prevailed for many years, across many years of economic progress.  Car manufacturing is one of the few industries where government have stepped in and required some new features to be implemented.

My main point is that this is not a role that the government should generally take.  Certainly in the car industry the features that have being required have mostly being low cost, sensible ones.  There is nothing constraining the government to doing this though.  In many other industries and at other times they have made requirements that don't make sense.

Quote from: Medivh
Quote from: Current
Quote from: wodan46
Take Health Insurance.  If a consumer abandons a Health Insurance company, no other is likely to take them.  If a Health Insurance company plays nice and doesn't gouge people, it will be out-competed and be driven out of business.  In short, those that cater to the public lose, those that cater to themselves win.
You have said this many time, but never explained why.  I've discussed it with you many times but you have never being able to produce a line of reasoning behind it.

It's produced by the conditions of the market.

1) Health insurers refuse to insure for pre-existing conditions. Or at least those who do insure for such conditions are incredibly expensive.
2) Health insurers gain the most profit when they take in as many premiums as they can, while paying the fewest claims that they can get away with
3) Knowledge of health insurers who don't pay claims is not wide spread, nor is it easy to find out; you have to be sick to find out if they'll pay your claim
4) Point 2 implies that people should change insurers until they find one more amenable
5) Point 1 implies that they wont be able to change insurers if you get sick
6) Point 3 with point 4 and 5 implies that by the time that you want to change insurers you can't

Basically, by the time you find out that you want to change insurers, you can't without paying as much as your treatment would cost anyway. This has been presented to you before, though not in such a formal format.
I agree with your point #2.  For profit health insurers want to make the best profit.  I agree with point #4 too, people want the best insurer (it is really separate from point #2 though, people look for the best regardless of the motivations of others).

I agree partially with point #3, but I think it depends on how serious the pre-existing conditions is.  I am insured for pre-existing conditions, that cost extra but not much extra.  I only have minor pre-existing conditions though.  I'm sure someone with something like a heart condition would be charged much more.  So, I partially agree with point #5, certainly that's the case for severe conditions.

What I disagree with most with is point #3.  I think that it is not difficult to find out how good the quality of service of health insurers is.  Information can be drawn from many sources, friends, doctors, publication on the subject.  Any of these may be unreliable, but the same is true in judging any service.

I think that in a free market for health insurance those companies that provide a good service will gain a good reputation.  Those that provide a bad one will get a bad reputation.  As far as I can tell this is mostly what happens in Ireland (though Irish private health is a long way from being a free market).

Quote from: Medivh
Quote from: Current
Quote from: wodan46
In the mean time, for the Social Democracy, the power is always in the hands of the voter.  They suffer no consequences for defying the Government, in fact doing so is liable to replace it with one more amenable to their wishes.  The same is not true for dealing companies, where your abstaining of their services is often hurtful, doubly so if you actually work for them.
You're belief in Democracy is touching, but not reasonable.  Certainly the voter has power, but only a tiny, tiny portion of it.  So little they have no reason to use it wisely.

The individual voter is not the same as the electorate.  Defying government can be very dangerous for an individual voter in a situation of mob rule.

Democracy isn't.
Do you mean that democracy isn't mob rule?  I agree that a well functioning democracy should not be mob rule.  Wodan would say that there is a difference between a "Democracy" and a "Democratic Republic".  A democratic republic allows for minority protection also.  However we name things I think that we have to aim for having minority protection.

I Britain I think what we have today is much closer to mob rule though.  The CEO of one of the large banks that was recently nationalized has a very large pension.  This is understandably annoying many since he will retire in luxury despite the bank failing.

Recently a government minister said about his contract "may be legal in a court of law, but it is not legal in the court of public opinion" and that is why the government should step in.

Quote from: Medivh
Quote from: Current
When dealing with a company you do not necessarily have to "abstain" from the services.  You can pick another supplier.

Not always. For instance, given the programs I have to work with, and the ones I want to use at home, I'm locked in to using Microsoft products. I can't choose not to, if I want to have a useful computer.
Your business chooses the programs that you work with, even if you have chosen them as part of your task as an employee.  You choose the software products that you use at home.

Why do the programs on each of these computers have to be both Microsoft products?

The business I work for also uses Microsoft products.  I don't, at home I use Linux.  Not everything is compatible, but that doesn't matter I hardly ever move files between them.  (The only files I commonly move are posts for this forum).  I once worked as a programmer without having a computer at home at all.

Unless you have to work at home with your own computer why do you have to use the same software?  I can see why if you were a private programming business you may have to use Microsoft products.

Quote from: Medivh
Not having a useful computer would mean no money, which would mean death. So no, that's not an option.
Do you have to work as a computer programmer?  There are other jobs.

Also, do you have to work as a computer programmer for a company that relies on Microsoft software?

Still, in general I accept your point.  There are some situations where a person may be able to buy something they need only from one supplier.

Quote from: Medivh
Quote from: Current
Something I think that you fail to do in our discussions is look at things from your own point of view.  You are a member of the middle class, the intellectual middle class I'd say.  You aren't really an "ordinary" person or one of "the masses" or "the majority".  Perhaps that ought to give you cause to consider if anyone really is.

I'm not sure what point you're trying to make here.
My point is the we are all different, that means we can't say that the voter and the electorate are the same.

Read the discussion I'm having with Wodan, I expect I'll go into this further.

Quote from: Medivh
Quote from: Current
If you want to learn something about Democracy read about Public Choice.

I don't know about Wodan, but I will. It will be with a critical eye, though.
Do, it's interesting.
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Psy
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« Reply #22 on: March 04, 2009, 13:23:26 EST »

Quote from: Medivh
Quote from: Current
When dealing with a company you do not necessarily have to "abstain" from the services.  You can pick another supplier.

Not always. For instance, given the programs I have to work with, and the ones I want to use at home, I'm locked in to using Microsoft products. I can't choose not to, if I want to have a useful computer.
Your business chooses the programs that you work with, even if you have chosen them as part of your task as an employee.  You choose the software products that you use at home.

Why do the programs on each of these computers have to be both Microsoft products?

The business I work for also uses Microsoft products.  I don't, at home I use Linux.  Not everything is compatible, but that doesn't matter I hardly ever move files between them.  (The only files I commonly move are posts for this forum).  I once worked as a programmer without having a computer at home at all.

Unless you have to work at home with your own computer why do you have to use the same software?  I can see why if you were a private programming business you may have to use Microsoft products.

Quote from: Medivh
Not having a useful computer would mean no money, which would mean death. So no, that's not an option.
Do you have to work as a computer programmer?  There are other jobs.

Also, do you have to work as a computer programmer for a company that relies on Microsoft software?

Still, in general I accept your point.  There are some situations where a person may be able to buy something they need only from one supplier.
Microsoft is the example of the capitalist markets failing in giving consumers logical choices.  The only standards Microsoft follow or those that they US government inadvertently created with DARPA and NCSA by created tons of fixed capital based on the standards created by AT&T (that dominant telecommunications company of the time) and the US government.  Microsoft was proven guilty in a court of law to trying to lock consumers into their property standards that only exist to prevent consumers from having choice in the marketplace yet Microsoft is still dominant proving the free-market can't be trusted in making standards and you need governments to create standards.
« Last Edit: March 04, 2009, 13:25:17 EST by Psy » Logged
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« Reply #23 on: March 04, 2009, 13:36:45 EST »

Quote from: Psy
Microsoft is still dominant proving the free-market can't be trusted in making standards and you need governments to create standards.
I work with many standards produced by private bodies.  For example
* Bluetooth - From the Bluetooth SIG
* PCIe - From the PCI SIG
* 802.11 standards - From the IEEE
* USB - From the USB-IF

All of these are in widespread use.  The situation is software is different but only because customers have chosen it to be that way.
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Psy
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« Reply #24 on: March 04, 2009, 13:46:07 EST »

Quote from: Psy
Microsoft is still dominant proving the free-market can't be trusted in making standards and you need governments to create standards.
I work with many standards produced by private bodies.  For example
* Bluetooth - From the Bluetooth SIG
* PCIe - From the PCI SIG
* 802.11 standards - From the IEEE
* USB - From the USB-IF

All of these are in widespread use.  The situation is software is different but only because customers have chosen it to be that way.
The point is the major stumbling block that prevented Microsoft form achieving a total monopoly (that their memo's shown was their goal) was the standards created by the government.  The fact the markets still picked Microsoft after being convected of locking consumers into their standards in a court of law both in the US and in the EU shows the market can't deal with deciding on standards.   
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Current
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« Reply #25 on: March 04, 2009, 14:05:01 EST »

The point is the major stumbling block that prevented Microsoft form achieving a total monopoly (that their memo's shown was their goal) was the standards created by the government.
In what way did the existence of those standards prevent that?

The fact the markets still picked Microsoft after being convected of locking consumers into their standards in a court of law both in the US and in the EU shows the market can't deal with deciding on standards.   
"Locking customers into standards" is not something that should be against the law.

The blunt fact of the matter is that Microsoft succeeded because no other software organization or set of competitors could beat them.  They did not come to this position by skill but rather mostly by luck.

That though does not mean that markets cannot create standards.  As I said above, look at the computer hardware market, it is full of standards created by private industry.
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Ihlosi
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« Reply #26 on: March 04, 2009, 14:17:16 EST »

Why do the programs on each of these computers have to be both Microsoft products?

Well, once you get away from bog-standard applications (web browser, e-mail client, word processor, spreadsheet, etc) and into more specialized areas (compilers for non-PC architectures, PCB layouting, circuit simulation, to name a few), and you find out that the suppliers of these programs don't go through the trouble of supporting other platforms than Microsoft Windows, you have to use Windows in order to use the software in question. And the suppliers are not interested in supporting other platforms even if you ask for it ... since that's extra effort and everyone uses Windows anyway.
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Psy
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« Reply #27 on: March 04, 2009, 14:25:00 EST »

The point is the major stumbling block that prevented Microsoft form achieving a total monopoly (that their memo's shown was their goal) was the standards created by the government.
In what way did the existence of those standards prevent that?
It meant before Microsoft even existed the US government and AT&T created standards for networking, meaning by the time Microsoft was trying to establish its own standards in networking there was already lots of fixed capital that was based on AT&T's and the governments standards and capitalists had no interest replacing their equipment all at once because Microsoft didn't adhere to what became the industry standard.  Microsoft couldn't control the Internet through ownership of protocols as the US government through DARPA and NCSA already decided what protocols would be standard.

Quote from: Current
The fact the markets still picked Microsoft after being convected of locking consumers into their standards in a court of law both in the US and in the EU shows the market can't deal with deciding on standards.   
"Locking customers into standards" is not something that should be against the law.
If capitalists are allowed to prevent consumers to have a choice then it encourages capitalists to not care about the consumer and focus on how to force consumers to buy their products.

Quote from: Current
The blunt fact of the matter is that Microsoft succeeded because no other software organization or set of competitors could beat them.  They did not come to this position by skill but rather mostly by luck.
Microsoft one because they focused on how to deny consumers choices, in both court cases they found guilty for rigging OEM contracts to lock competitors out of the market.

Quote from: Current
That though does not mean that markets cannot create standards.  As I said above, look at the computer hardware market, it is full of standards created by private industry.
The hardware market had issues with the X86 standard that even Intel found was a problem.
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wodan46
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« Reply #28 on: March 04, 2009, 17:35:46 EST »

I agree partially with point #3, but I think it depends on how serious the pre-existing conditions is.  I am insured for pre-existing conditions, that cost extra but not much extra.  I only have minor pre-existing conditions though.  I'm sure someone with something like a heart condition would be charged much more.  So, I partially agree with point #5, certainly that's the case for severe conditions.

What I disagree with most with is point #3.  I think that it is not difficult to find out how good the quality of service of health insurers is.  Information can be drawn from many sources, friends, doctors, publication on the subject.  Any of these may be unreliable, but the same is true in judging any service.
Do you have any way of knowing whether or not you will be denied health insurance if come down with a serious ailment, or that the health insurance company will just claim that you had "another" pre-existing condition and they don't have to pay?  Have you read the fine print to make sure they can't?  Are you sure you read the fine print correctly?  Have you asked other people who receive health insurance from them whether or not they've had any problems with it?

I think that in a free market for health insurance those companies that provide a good service will gain a good reputation.  Those that provide a bad one will get a bad reputation
Sorry, but that doesn't happen.  In part because as we discussed before, no company has motivation to provide good service in the first place, and all companies have motivation to make their reputation appear better than it actually is, with it being extremely hard for non-experts (IE most people) to tell the difference in the fine print.
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The plural of "anecdote" is "anecdotes". Not "data".
Medivh
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« Reply #29 on: March 04, 2009, 19:29:10 EST »

Quote from: Medivh
Quote from: Current
Quote from: wodan46
Take something like the Seat Belt.  Car companies fought tooth and nail to prevent it from being an enforced requirement.  Why?  Not because it would've cost them much money, but because it would've indicated that Cars are dangerous without them.  If Car companies had not been forced to implement Seat Belts, they would have simply continued to downplay the risks, and customers would have had to deal with it.
I'm sure many would have continued to downplay the risks yes.  A business that adopts seat belts though can advertise them and point out the protection they afford.  This is what Saab and Volvo did in the 1960s in Europe.

Interesting fact about Volvo:
Volvo has a reputation in Australia for safety. I don't know about overseas, but in Australia, if you're paranoid about crashing your car it's likely that you're going to buy a Volvo.

Why?

Because back in the day, safety standards were introduced, meaning that car manufacturers had to make sure that the car wouldn't dump the engine block on the driver's lap in a crash. Volvo, seeing that they may as well get some PR out of this, and launched an ad campaign saying "Look! We're so safe, our cars come with x, y and z!"

Other manufacturers didn't bother, thinking that the Australian public would be more interested in acceleration, and thinking that adding safety features would decrease this.

To this day, Volvo advertises based on safety features, where others advertise based on "cool factor". To this day, the safety features very rarely differ between manufacturers.
Across the world Volvo have a good reputation for producing safe cars.  It is something they have promoted all over the world for decades.  Many other manufacturers are just as good today though.

Quote from: Medivh
The free market doesn't work when customers are expected to find this kind of thing out for themselves.
I don't think that is true.  What you haven't mentioned is that Volvo often added safety features that were not required by regulations.  Some features governments demanded first and manufacturers added.  Others manufacturers added first and governments demanded later.

My own car has several safety features there is no regulatory requirement for.

At the time that Volvo acquired its reputation for safety in Australia, most Volvo models had only the safety features required.

What I'm saying here is not that the "customers are expected to find this kind of thing out for themselves".  I'm saying that the manufacturers should not be burdened with a requirement to inform customers about possible improvements to their products.  That doesn't necessarily mean that customers must find out themselves.

Which is rather a straw man of the position I'm taking: Volvo has distorted the market in the past by pretending that their cars are safer than everyone else's. To see through this kind of thing, you'd have to know the safety requirement, or the safety features of several cars. Most people who go for safety in a car don't care about statistics, and those who care about statistics generally don't care about the safety of the car.

This doesn't mean that Ford or Holden should have stated that "you can get extra safety by doing x, y and z", just that Volvo has an undeserved reputation which means that they get more sales for no good reason.

Clearly the market does work in this sort of situation.  This is the situation that has prevailed for many years, across many years of economic progress.  Car manufacturing is one of the few industries where government have stepped in and required some new features to be implemented.

My main point is that this is not a role that the government should generally take.  Certainly in the car industry the features that have being required have mostly being low cost, sensible ones.  There is nothing constraining the government to doing this though.  In many other industries and at other times they have made requirements that don't make sense.

While we might disagree on how many areas a government could do this safely, I think we can agree that car manufacturing is one of them, for the reasons stated above (statistics and safety, mainly).

Quote from: Medivh
Quote from: Current
Quote from: wodan46
Take Health Insurance.  If a consumer abandons a Health Insurance company, no other is likely to take them.  If a Health Insurance company plays nice and doesn't gouge people, it will be out-competed and be driven out of business.  In short, those that cater to the public lose, those that cater to themselves win.
You have said this many time, but never explained why.  I've discussed it with you many times but you have never being able to produce a line of reasoning behind it.

It's produced by the conditions of the market.

1) Health insurers refuse to insure for pre-existing conditions. Or at least those who do insure for such conditions are incredibly expensive.
2) Health insurers gain the most profit when they take in as many premiums as they can, while paying the fewest claims that they can get away with
3) Knowledge of health insurers who don't pay claims is not wide spread, nor is it easy to find out; you have to be sick to find out if they'll pay your claim
4) Point 2 implies that people should change insurers until they find one more amenable
5) Point 1 implies that they wont be able to change insurers if you get sick
6) Point 3 with point 4 and 5 implies that by the time that you want to change insurers you can't

Basically, by the time you find out that you want to change insurers, you can't without paying as much as your treatment would cost anyway. This has been presented to you before, though not in such a formal format.
I agree with your point #2.  For profit health insurers want to make the best profit.  I agree with point #4 too, people want the best insurer (it is really separate from point #2 though, people look for the best regardless of the motivations of others).

I agree partially with point #3, but I think it depends on how serious the pre-existing conditions is.  I am insured for pre-existing conditions, that cost extra but not much extra.  I only have minor pre-existing conditions though.  I'm sure someone with something like a heart condition would be charged much more.  So, I partially agree with point #5, certainly that's the case for severe conditions.

What I disagree with most with is point #3.  I think that it is not difficult to find out how good the quality of service of health insurers is.  Information can be drawn from many sources, friends, doctors, publication on the subject.  Any of these may be unreliable, but the same is true in judging any service.

I think that in a free market for health insurance those companies that provide a good service will gain a good reputation.  Those that provide a bad one will get a bad reputation.  As far as I can tell this is mostly what happens in Ireland (though Irish private health is a long way from being a free market).

I assume the underlined text above was meant to read "#1".

As such: you say that I should ask friends and doctors. If I'm not friends with anyone who's chronically ill, I'll never get any information how good companies are for chronically ill people; the main reason for having such insurance. So this leads back to relying on doctors as experts.

How is this different from the system that has been disparaged by yourself and Jersey in the past? You've installed "experts" who should be consulted on such personal tasks as getting health insurance.

Quote from: Medivh
Quote from: Current
Quote from: wodan46
In the mean time, for the Social Democracy, the power is always in the hands of the voter.  They suffer no consequences for defying the Government, in fact doing so is liable to replace it with one more amenable to their wishes.  The same is not true for dealing companies, where your abstaining of their services is often hurtful, doubly so if you actually work for them.
You're belief in Democracy is touching, but not reasonable.  Certainly the voter has power, but only a tiny, tiny portion of it.  So little they have no reason to use it wisely.

The individual voter is not the same as the electorate.  Defying government can be very dangerous for an individual voter in a situation of mob rule.

Democracy isn't.
Do you mean that democracy isn't mob rule?  I agree that a well functioning democracy should not be mob rule.  Wodan would say that there is a difference between a "Democracy" and a "Democratic Republic".  A democratic republic allows for minority protection also.  However we name things I think that we have to aim for having minority protection.

I Britain I think what we have today is much closer to mob rule though.  The CEO of one of the large banks that was recently nationalized has a very large pension.  This is understandably annoying many since he will retire in luxury despite the bank failing.

Recently a government minister said about his contract "may be legal in a court of law, but it is not legal in the court of public opinion" and that is why the government should step in.

That minister is unlikely to get his way, despite the public being behind him. Nor is he likely to actually want the pension rescinded. This is a very poor example.

Quote from: Medivh
Quote from: Current
When dealing with a company you do not necessarily have to "abstain" from the services.  You can pick another supplier.

Not always. For instance, given the programs I have to work with, and the ones I want to use at home, I'm locked in to using Microsoft products. I can't choose not to, if I want to have a useful computer.
Your business chooses the programs that you work with, even if you have chosen them as part of your task as an employee.  You choose the software products that you use at home.

Why do the programs on each of these computers have to be both Microsoft products?

The business I work for also uses Microsoft products.  I don't, at home I use Linux.  Not everything is compatible, but that doesn't matter I hardly ever move files between them.  (The only files I commonly move are posts for this forum).  I once worked as a programmer without having a computer at home at all.

Unless you have to work at home with your own computer why do you have to use the same software?  I can see why if you were a private programming business you may have to use Microsoft products.

Mainly because I'm a PC gamer. Of the games that have been sold in the past decade, less than 10% of them have been for anything but Windows. Of those, a large portion can be played in a Mac emulator, at reasonable speed. Were Windows POSIX.3 compliant, instead of just POSIX.1 compliant, I wouldn't even need an emulator for the OSX offerings.

As you suggest, my workplace is a windows shop for many reasons. Not the least of which is custom in-house software written in .Net.

Quote from: Medivh
Not having a useful computer would mean no money, which would mean death. So no, that's not an option.
Do you have to work as a computer programmer?  There are other jobs.

None that I would be sacked from in days. Social problems that get exponentially worse the more bored I get.

Also, do you have to work as a computer programmer for a company that relies on Microsoft software?

Yes, there are no shops that have anything to do with Linux in any kind of major way in Australia, that are interested in hiring outsiders, AFAIK. I've looked extensively, if you're wondering.

Still, in general I accept your point.  There are some situations where a person may be able to buy something they need only from one supplier.

I think we'd disagree on the numbers. I think that's primarily because Ireland has had easy access to both the European and UK markets for a long time, and Australia is a relatively insular market due to distance.

Indonesia's not worth a shit, China's about equidistant from the US as it is from Australia, same with Japan... Most of our stuff is home-grown or flown over from the US. No-one's interested in providing services because there's an incredible difficulty of expanding on the initial base.

Quote from: Medivh
Quote from: Current
Something I think that you fail to do in our discussions is look at things from your own point of view.  You are a member of the middle class, the intellectual middle class I'd say.  You aren't really an "ordinary" person or one of "the masses" or "the majority".  Perhaps that ought to give you cause to consider if anyone really is.

I'm not sure what point you're trying to make here.
My point is the we are all different, that means we can't say that the voter and the electorate are the same.

Read the discussion I'm having with Wodan, I expect I'll go into this further.

I don't expect that they would. However, there's a rough consensus in intra-demographic thinking. Usually.

A non-political example: user interface design testing is usually done with five people. Ten at most. Most people think this is counter-intuitive; surely the more people you test an interface with, the better your results?

Well, no. Non-technical users have almost all got the same kind of user model in their heads. After five people, you start seeing the same patterns over and over again. In twenty testers you'd see maybe five different patterns. Maybe. In fifty, I'd be surprised to see a sixth added.

Quote from: Current
That though does not mean that markets cannot create standards.  As I said above, look at the computer hardware market, it is full of standards created by private industry.
The hardware market had issues with the X86 standard that even Intel found was a problem.

This old canard? Yes, the x86 was a stop-gap processor. It's replacement was an over-complicated sack of crap. The x86 is a de facto standard because it's fairly simple and it just works. For the most part.
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And if i catch you comin' back my way
I'm gonna serve it to you
And that ain't what you want to hear
But that's what I'll do
-- "Seven Nation Army", The White Stripes

So what you're telling me is that LTV's fudge factor means more than it's independent variable?
Yes...
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