Thread: Ideal Type
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Old Sep 7, 2003, 11:38 pm   #3 (permalink) (top)
Geoff332
Igneous Magma
 
Location: New Zealand
Posts: 309
I think you missed the basic point. The key factor that makes an exchange market close to perfect is the substitutability of the 'product'. A US dollar is a US dollar, no matter who you buy it from. Other similar markets are commodity markets -- one key factor is variation in product quality (as an ideal type analysis quickly reveals, variations in quality led to variations in substitutability and to problems with information availability).

Health care is pretty close to the other end of the scale. The ideal type of perfect competition indicates that a freely competitive market structure is inappropriate for healthcare (and no-one in the world actually operates one). You need to introduce corrective measures to shift things back towards an pareto optimal position (there is another argument, regarding the inapproriateness of pareto optimality at the extremes in healthcare, but we can skip that for now). This can be achieved through external regulation (eg legal), the civil legal system (malpractice suits), self-regulation (codes of practice) and a few other techniques. I tend to explain all of these factors in an insitutional framework.

The labour strike is very rarely a general corrective device for the evils of capitalism: it is simply the withdrawl of labour. In most cases, it is about a specific (and, perfectly legitimate within a capitalist system) means of negotiating within the labour market. There are exceptions -- general stikes. These can be more ideological, focusing on the the power balance between the labour and the employer. But these rarely, if ever, happen. The ideological objection of capitalism to labour unions is not the withdrawl of labour, but the collective organisation of labour. This (the opponents argue) eliminates the exercise of individual (egotistical) desire. For Marx, they were a way for labour to gain access to the surplus value generated by the labour process. But this is rarely the ideology behind their use today.
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