jedcstuff

2010-04-05

Profit, carrots, and the free market

Invitation to sign a petition and add a personalized comment to it, to the FCC re net neutrality in this case, got me to add this as my personalized comment:

"There appears to be a basic principle involved here, that of preventing providers to a market from being able to control the market. Because history has shown that when the providers also control the market, they are guided only by maximum profit for least value added, thus drifting away from the original purpose of the providers to the detriment of the customers, the people of the United States."

This seems to approach description of a key parameter involved in the changes that seem to be happening to America in recent years. It involves what has been happening when a "free market" is allowed to run amok. The big business interests, individual corporations or allied large corporations, lose sight of providing customers' needs; and instead, by controlling the market, give the customer only what makes the corporation the most profit for the least value added, as if this were good business sense. The customers are stuck with what is offered by the corporations who control what the customer's options are; thus the customer either has to take what the business sets out for the customer, or the customer has to do without. In this scenario, any alternate product or service opportunity is simply prevented from becoming prominent enough to be visible to the customer, and thus the options die off from lack of customer support. The free market becomes a market controlled by the businesses that control the customer's options - essentially the principle of feedback by the customer base has been stopped, and there is really no free market. It is just a game of who is the biggest and plays bully, nothing new there.

Investors in those big controlling corporations win big, and America in general loses equally big. The part I don't understand is that if those investors are part of America, why don't they see they are really losing. Does super wealth buy that which was prevented from being produced? Somehow I think that they lose along with the rest of us. Yet, they can't see it, blinded by the bottom line of their investment portfolio, which is quantified in dollars, which is too loosely connected to product capabilities.

I wonder if it would help if "the bottom line" had two parts to it, instead of just the profit to be divvied up among the management and the investors. The second part would be in the value added, the product capabilities added, available to the customers. Like in "we had a profit of a thousand dollars and provided a carload of carrots to the customers, some of which were ourselves who also contributed to that thousand dollars profit, and enjoyed some carrots."

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