Im not sure any of that is relevant, it was a hypothetical example. There are many things I would buy simply because it is easier to buy them. I know that the cost of the labour and raw materials and time effort and skill that goes in to that is far more than it would cost me to do so myself. I have no problem with this as long as this difference is reasonable. The free-market economic thinking that the market would set what is reasonable has been proven time and time again to be false, as time and time again large corporations, through things like exploiting their market position to shut out competitors, like using their market position to exploit their suppliers etc etc, create a market where someone is being exploited for their own profits.

Yes. I need to heat and light my house. I don’t have a choice about that. The modern world and modern house doesn’t function without it. The cost of making and supplying me with electricity and gas throughout the energy chain, exploits that need and means I have to pay a far higher price than the cost of the service or what I would value it at.

All businesses have the potential to be moral/immoral depending on how they are run, there is nothing inherently or automatically moral or immoral in business unless steps are taken to make it so.
Richie mentions one company which has put morality into the way it conducts its business (with which I concur) but many others have not.
Hence we cannot assume that any one company, large or small, will conduct itself morally and we must assume a baseline of amoral ... which is why regulation is necessary and why constant re-examination of that regulation is also necessary.


Quite so.
Do you accept that regulation is necessary?


So, you don't think that, for example, the banks were under-regulated?
If so, we disagree.

Has it been proved false? What has been priced at a price point it doesn't work to transact at that price point?



So you are voluntarily paying a price you think is wrong? Why are you paying that? It's not like there aren't alternatives. Alternatives from different energy suppliers, different fuel types you can use in your house (gas, electric, coal, wood, your own solar panels etc) or ways you can use less energy whether that means insulating your home more or insulating yourself (I'm wearing a single layer sweathshirt but could choose to wear more for example)
Considering all those options you seem to have declined to use and instead continue to pay a price you say is higher that you value it at shows that it actually is a price you value it at or even lower.

There are some great posts on this thread.

In debates about capitalism I usually find myself at odds with the lefties because I am a defender of capitalism and the market system. However, I think supporters of capitalism have to be honest, and not disingenuous about the financial crisis, the root causes, and address it so it doesn't happen again - and not use it as an opportunity to further their own political position which I saw summed up wonderfully on Twitter once as: "the poor have too much and should have less; the rich don't have enough and should have more".

A lot of the voices of the right defend capitalism and criticise government and want the size of the state to be reduced: this is fair enough there is an ideological position here from the likes of Milton Friedman. The Friedman style intellectual argument, that was basically people act more responsibly when they face the consequences of their actions, so the state shouldn't provide a 'safety net' as it will be abused. However the modern day right wing position has moved to one where the state should provide a safety net, not for the poor but to cover the exposure to losses of those that want to get rich by excessive risk taking. They want a one-way bet: they profit from the rewards when risks come off, but the taxpayer absorbs the losses if risks go wrong.

Where the hypocrisy really gets my goat, is the financial services industry and its advocates like to bite the hand that feeds them: they strongly resist any attempt to regulate their practices, and say government should "get out of the way", they allow governments to spend huge sums bailing them out when they collapse, and then they point to government debt and change the argument to "the problem is one of government debt, so governments should reduce their expenditure on welfare and public services"....notably not that they should stop covering losses in the private sector!

The reason they can do this is because especially in the USA, the banking sector has a lot of patronage to give away to those in government or in the academic field of economics. If you are influential in either of those sectors, and hold a position thats friendly to the banking sector, you can expect to be rewarded with a very high paying position in the banking sector as your next career move.

The real cause behind the financial crisis was the creation of financial products that disguised the underlying risk of an asset: eg if you make multiple subprime loans (to families that are never going to be in a position to pay them back) but can package them together in a way that allows you to sell on those loans without the buyer of the loans knowing how high the risk of default was, then you can make money by making a loan to someone that can't pay back, then selling on the loan at a profit, and when the default comes in its the party you sold it on to that loses out. When lenders worked out how to do this it was easy money and they deliberately made loans to people on low or no incomes, in the knowledge they would likely default, but in the knowledge that it would be someone else's problem.

Now of course they like to turn the blame on the poor: "well people shouldn't have taken out the loans then if they can't afford to repay them". Yes thats true, but if you ask me to look after £1000 for you, and when you come to ask for it back I say actually I loaned it to a homeless person at 10% interest but I haven't seen him since, your anger is going to be focused on me not the homeless person....

Firstly, I'm all for regulation to a level and FSS seems underregulated. I see it as like the salary cap in RL: Without that in place, business have to take greater risks (or overspend on players) to be competitive. If they don't do that then they're taking the other risk of losing business (games) to their competitors.

IIRC, on "sub prime" loans, there was some hefty gov encouragement (Clinton era I think) for banks to lend to those they wouldn't want to due to concern about being paid back.
Over here, we're seeing newer FSS businesses stepping into the gap of people who want to borrow but banks don't want to lend to, but the gov seemingly wanting to legislate them out of that gap

Seems to me the concept of wealth needs to be considered against the price paid for it. Whilst we have alot our primitive anscentors didn't have our world is becoming less diverse and bleaker with increased rapidity. It is difficult to see the current human way of life being sustainable in even 50 years time.

Yes it has. The Pharmaceutical industry is a market which is failing. The energy market doesn’t work. Any industry which employees people on in work benefits or government subsidy.

Im not voluntarily paying a price which is wrong, i have to pay a price which is wrong. I dont have a choice. Gas an electricity is needed. I could go back to victorian times, live by candlight, wear warm indoor clothes, i could heat my house by burning wood. But when the alternative to overpaying is to wind back the clock 150 years, I feel confident that isnt an example of a working market.

I could put a Gun to your head, threaten to fire it if you dont give me £100k. If you give me £100k, is that an example of a working market? You have valued your life at that price, i have given your life, the fantastic, wonderful world of free-market economics.

Simply saying "Yes it has" and listing a couple of industries doesn't prove it. Why do you think the gov paying benefits to employees equates to a market not working?



So you want me to believe you are being forced to pay whatever price you are paying, with absolutely no other options, except those options you listed but chose not to take instead preferring to choose to voluntarily pay a gas and electric supplier for their product. Your post does of course prove how the market has improved your life compared to the lifestyle you would have had without it.



That would be an example of a free market without laws or regulation, which no doubt would lead to significant growth in a sector we would call "crime"
If you can show me where I or any poster have supported the idea of a free market without laws or regulation, I would be surprised. I can't think of any country or any business that has a free market without laws or regulation, Somalia perhaps being the closest.

Because a working market would have the company paying a living wage. In work benefits are nothing more than corporate welfare. It is a government subsidy. If a business can’t exist by paying its employees a living wage, free market economic theory tells us that business shouldn’t exist, the fact it does exist provides a barrier to market to the new fandangled company Free Market economics tells us would take its place. It is an active disincentive to companies to pay a living wage.

I have the cheapest deal I could get, I think its too expensive.

You may attribute the improvement in my life to that market but none of the companies who I can buy my Gas or Electricity through were either responsible for the discover of any of the methods of making gas or electricity, nor the vast majority of the infrastructure that provided it. That was largely done by a nationalised industry, and where energy companies are investing in new energy sources, they only do this with massive government subsidies. They do of course also have huge profits.


You cannot have a free market with laws and regulation. It is an absolute, It is like being a little bit pregnant. If you have rules and regulations then you don’t have a free market, and it becomes a lie to pretend that we do.

Perhaps we should take away that inventive?



So you're not paying it? Please be clear.



So part private enterprise and part gov. Just how we expect things to work. Was this supposed to be news?



You are being far too absolute. When we say "free market" there are levels of free market and levels of regulation. Those that argue for a "free market" are arguing for a freer market, not the abolition of all rules and regulation. If you believe any is arguing for the absence of all laws and regulation, please show me what led you to that conclusion. Otherwise I'll join in the nonsense and behave like you are arguing for the state to run everything.

We could, but then we would need accept that Union power was hat kept the greed and avarice of big business in check. Right now, with the rules restricting union action, a removal of the working tax subsidies would simply leave people without enough to live, a race to the bottom as it were.

I am paying for the cheapest deal I can get. It is too expensive.

Its not news, simply an explanation of why it isn’t, imo, acceptable that a private enterprise can rely on government infrastructure and subsidy, have high charges and high profits. That is not a ‘free market’ in any way, shape or form. What is, is a cartel where the public share the risk of investment, and but the profits go to private enterprise. It is a transference from the public purse to the fat cats pockets. It is a clear example of a market which isn’t working.

Im not being too absolute. Free market economic theory only holds any kind of water in an entirely free market. Otherwise it isn’t a free market economy, it is a managed economy using free market theory to justify avarice, exploitation and excess. I don’t believe you are arguing for a free market without any rules and regulations, I think you are justifying excess, avarice, greed and exploitation by saying that is a how a free market economy works. It is how a free market economy works, but none of us want one. What we want is a regulated economy. So why not stop excess, avarice, greed and exploitation? Why not have government which manipulates markets to work in the ways we want them? And if a market proves not to work. Why not have a nationalised industry?

Plenty of big businesses don't have unions and have (mainly) happy employees. Can unions themselves count as "big business" ? Can't see why not, so what you're wanting to say is that business keep business in check, but sometimes business keeps itself in check anyway.
Another argument about the removal of subsidies is that employers would increase pay to compensate. Which is what you seemed to suggest on your earlier post.



Too expensive for what? It's clearly not too expensive for you to pay, or seek alternatives.


Firstly all private enterprise relies to some extent on gov infrastucture. How would we drive or even walk around for one thing, otherwise.
On subsidies.....I kind of shrug my shoulders here. Where subsidies are given, perhaps we should take them away. In most cases where they are in place they are in such scenarios that no service would be provided otherwise, and if the state tried to do it they perhaps would cost even more.
"Fat cats" is emotive and we should stay away from such terminology if we are to have a sensible discussion.



You are being absolute. Please find me any suggestion that is what we should have. Your alternative isn't going so well in North Korea.

And plenty of those big businesses are those with many employees being subsidised by in work tax credits.

Too expensive for the level at which I value it. I am forced to pay that amount because there is no realistic alternative.

You are doing nothing here but espousing the free market economic theory that the free market will drive costs down yet where it doesn’t saying the only alternative is for the government to subsidise it or lose that service. If the a company cannot provide a service without government subsidy, it shouldn’t provide that service that is the free market. What certainly cannot be acceptable is that a private company receives government subsidy and makes a profit. That is simply giving money collected by tax to rich individuals.
There is no way that government subsidy can be compatible with a free market. Any market which operates with a government subsidy, cannot even begin to argue that it is in anyway, shape, or form a free one

And if all private enterprise relies on government infrastructure, which belongs to all of us, it should remember that it exists to serve all of us, not to exploit so that a few can live in luxury.

Now who is being too absolute? My alternative isnt North Korea, my alternative is do what we do now, but with the over-riding thought that our markets exist to serve us. Not the other way around. the markets are our servants, not our master. They should do what we want, not us what they want. If you think that is how north korea is run then you need to read a book.

It's a defined term in economics. Normal profit is when enough profit is made to pay the workers and managers a reasonable wage and for the company to remain in the market. Average Revenue while still paying the workers and managers a reasonable wage[/i.

So if we end up with firms making super-normal profits while [inot[/i paying the workers and managers a reasonable wage i.e. ending up with Average Revenue > Average Total Cost by exploiting the workforce or relying on in work benefits as a subsidy, then any such firm is making super-normal profits is not doing so because they have cornered the market but are doing so at their workers and the taxpayers expense.



The fact John Lewis and Richer Sounds are more successful than many of of their competitors gives lie to what you say above. They value their staff and for example John Lewis are for more successful than M&S who under successive chairmen have abandoned treating their staff as they once did (in a similar way to John Lewis).



I have no idea what the implications of that would be and neither I suspect do you. Nor do I understand why you mentioned it.