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Thread: The illusion of choice

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    Sapere Aude Jack's Avatar
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    The illusion of choice

    Supporters of unbridled capitalism claim that it's responsible for the plethora of choices we all supposedly enjoy in the marketplace, especially when it comes to our food. We're told that competition in the marketplace is what prevents monopolies and ensures that small business owners can compete fairly with the giants.

    Not true.

    Hundreds of brands that we find on supermarket shelves give the impression that our money goes to as many different companies. But that's not the case: a large majority of these brands are owned by a handful of companies. The following chart provides an overview of where our money actually goes...

    Why this convergence is harmful?


    This is a legitimate question: how the fact that these marks are controlled by so few companies is it a bad thing? Is it not just the functional outcome of our economic system?


    In fact, we believe that this convergence is bad for various reasons at various levels which are all more or less interrelated. Here are five:


    1 - These companies are so big that they have a dangerous political power


    This reason is that, somehow, encompasses all the others. Profits from these companies are gargantuan: alone, Nestlé has generated more than $ 37 billion profit in 2010. But that money is rapidly converted into political power. Indeed, in our political system, pressure groups are constantly making efforts to pass or block legislation. In general, most lobbyists are well funded and organized, the more they can afford to have a great influence on the decisions taken at the end. The food industry conducts lobbying activities at all levels: international, national and local.


    2 - Health Impacts


    This makes sense: our health is largely by the food we consume, it is from them that eventually constitute our bodies. To the extent that a vast majority of foods we buy are provided by a very small number of companies, each of them has a huge part to play on our health, which is partly in their hands. Contrary to what they can say well through various advertisements, our health is not part of their genuine concern, quite the contrary.


    3 - Impacts on the Economy


    Economically, the limited number of companies in the food market puts us in an oligopoly. Two major consequences follow from this: First, a market controlled by a small number of companies provides "entry barriers", that is to say that any new company that tries to enter this market will life difficult if not impossible. For example, if a new producer is lucky enough that her local supermarket has agreed to sell its product, it is often on almost inaccessible shelves that its product will be placed, which encourages very few people buy it because of Indeed, in conspicuous places are reserved for multinationals, who pay dearly for the privilege. A small producer simply does not have the budget to compete with them.


    4 - Environmental Impacts


    Companies that control the food industry have, in general, not an environmental issue rosy. In 2001, Kraft decided to invest heavily in the business of lobbying the Bush administration to campaign against the Kyoto Protocol. In China, PepsiCo and Nestle have been convicted for pollution of waterways . Unilever, meanwhile, 7.4 tons of illegally dumped waste contaminated with mercury at the entrance to the forest Pambar Shola in India, right next to a city with high population density. Unilever was forced to close this plant mercury for this reason. It's also no surprise that Procter & Gamble has lobbied to weaken environmental laws european projects in the area of chemicals. Because of pressure from P & G, the final legislation passed in 2003 by the European Parliament protects only very few citizens and the environment of toxic substances in household products.

    5 - Human Impacts


    The reputation of several multinationals about the working conditions they impose abroad is well established. Over the years, companies operating in various fields have been in the spotlight, the center of several scandals. The fact that the food industry also behaves in this way will therefore probably not surprising. Despite this, the severity of the actions of some of these companies may surprise many.
    Convergence Alimentaire (translated from the original French)

    Corporations.jpg



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    Amateur stripper Charlatan's Avatar
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    Quote Quote by: Jack View Post
    Supporters of unbridled capitalism claim that it's responsible for the plethora of choices we all supposedly enjoy in the marketplace, especially when it comes to our food. We're told that competition in the marketplace is what prevents monopolies and ensures that small business owners can compete fairly with the giants.

    Not true.

    Convergence Alimentaire (translated from the original French)

    Corporations.jpg
    Well, we need to pass egislation saying how big a company may be before further taxes. The reason for this is the problem, so without further ado, we should make a reason!

    If there is an unfair competitive advantage for bigger companies, with pricing and bulk buys, it makes it hard for the competition. This means it is like a monopoly. Then there is the amount of taxes the other company could bring in, ruled out by the 'big boys.' If there are taxes to be had, and they are not had because of market size, then there should be further taxation onto these comapnies, making it cheaper for them to down size.

    Could this be the asnwer?

    !! Going to my destruction !!

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    Igneous Magma hensatri's Avatar
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    There are some who just LOVE to cast taxes as a horrible form of unjust control, and promote the free and unregulated market at the ideal.

    Free markets can easily lead to a capitalistic tyranny. In fact there is a good case to be made that an unregulated economy will ALWAYS lead to a form of tyranny or oligarchy based on control of wealth.

    If the only form of regulation on an economy is what a given entity can achieve through legally exerted pressures, then it goes without saying that more wealth, equals more power, equals more control, equals a stifling of competition and increase in wealth and control.

    This is not democracy.

    Fortunately or Unfortunately there aren't very many examples to prove this. After the industrial revolution the horrific precedent set by the unregulated free market of London at the time (read: rampant employee abuse, rapid expansion of the ghettos, unbridled pollution, extreme government corruption) quickly forced government hands into regulation and wealth redistribution just to get society straitened back out. Due to WW1 and 2 the economy of Europe kind of hit a big "reset" button, so we never got to see the far reaching consequences of those free markets.

    In the US we ballooned and burst VERY quickly, and ran into the Great Depression, which took lots of government regulation and wealth redistribution (through government make-work programs) to get us out of. Again, the war came along and served as a bit of an economic reset button, so we didn't see the far reaching consequences of that either.

    In any event, the few tentative steps that an industrial or post industrial nation has made towards a free market have resulted in a dream for an elite few, and a nightmare for the masses.

    We are still in the midst of a halting recovery from recession that happened, due in no small part, to super-wealthy entities who were allowed to act irresponsibly. Regulation did not in any way, shape, or form cause the housing bubble or the resulting recession. If anything it’s a case for increased regulation.

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    Destroyer of Worlds minorwork's Avatar
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    Quote Quote by: hensatri View Post
    Free markets can easily lead to a capitalistic tyranny. In fact there is a good case to be made that an unregulated economy will ALWAYS lead to a form of tyranny or oligarchy based on control of wealth.
    The consumer's demand for the cheapest product that meets their needs has nothing to do with with the flow of their wealth to that product?

    If the only form of regulation on an economy is what a given entity can achieve through legally exerted pressures, then it goes without saying that more wealth, equals more power, equals more control, equals a stifling of competition and increase in wealth and control.
    So companies using legal means to force the elimination of carbon based fuels could be used as an example to make your point? Where does the consumer figure in?
    This is not democracy.
    You sure? A consensus agreement by individuals to have the most product for the least cost has a bit of influence on capitalism doesn't it? And that comes from consumers' choices.

    If the terrain and the map do not agree, follow the terrain.

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    Volcanic Erupter finder's Avatar
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    It seems to me that whether liberal or conservative, socialist or capitalist, the fear of a few controlling the worlds wealth isn't as severe as who those few might be.

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    And you you dismiss my experiences.
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    Irony. You're simply divine at exhibiting it and I want to make sweet sweet love to you for it.
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    Igneous Magma hensatri's Avatar
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    It is my contention that manipulation, social engineering, and soft coercion over a long period of time will tend to allow this kind of radical imbalance to occurs even, or especially, if consumers are permitted free choice.

    Take the housing bubble for instance. Suppliers were permitted to make irresponsible offers, consumers were allowed to make irresponsible deals, and even if most consumers act resonsibly, you will have a small that will take the bad deal, then another small number who would no have if not for the bad deal being pushed so heavily, then another small percentage who would have if if not for deceptive incentives, then another small percentage who would not have if everyone else wasn't doing it....then bam, housing collapse.

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    Word Bearer Senor Hoint's Avatar
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    Noam Chomsky said it fairly well. http://www.chomsky.info/talks/20110407.htm
    Take a course in economics, they tell you a market is based on informed consumers making rational choices. Anyone who's ever looked at a TV ad knows that's not true. In fact if we had a market system an ad say for General Motors would be a brief statement of the characteristics of the products for next year. That's not what you see. You see some movie actress or a football hero or somebody driving a car up a mountain or something like that. And that's true of all advertising. The goal is to undermine markets by creating uninformed consumers who will make irrational choices and the business world spends huge efforts on that.


    But truth, Hajjaj was convinced, held many layers.

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    Volcanic Erupter finder's Avatar
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    Quote Quote by: hensatri View Post
    It is my contention that manipulation, social engineering, and soft coercion over a long period of time will tend to allow this kind of radical imbalance to occurs even, or especially, if consumers are permitted free choice.
    How can consumers be permitted free choice under your scenario considering you contend using manipulation, social engineering, and soft coercion to control the final outcome? I wonder how many a fine speech from "well intended" dictators first starting out began with words that sounded similar to your words.

    Take the housing bubble for instance. Suppliers were permitted to make irresponsible offers, consumers were allowed to make irresponsible deals, and even if most consumers act resonsibly, you will have a small that will take the bad deal, then another small number who would no have if not for the bad deal being pushed so heavily, then another small percentage who would have if if not for deceptive incentives, then another small percentage who would not have if everyone else wasn't doing it....then bam, housing collapse.
    People must be allowed to be irresponsible at times during their lives. They have to be allowed fail. Otherwise it isn't freedom. I don't know anyone who advocates pure capitalism with no regulation but the problem has always been finding the right balance between the two. My point is what does it matter if government, big business or a combination of the two are controlling things? It's still in the hands of a relative few, it's just the way it is. And the masses are always the ones who concede them their power.

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    And you you dismiss my experiences.
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    Destroyer of Worlds minorwork's Avatar
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    Quote Quote by: hensatri View Post
    It is my contention that manipulation, social engineering, and soft coercion over a long period of time will tend to allow this kind of radical imbalance to occurs even, or especially, if consumers are permitted free choice.
    The perception of imbalance is determined by subjective preference. There is balance regardless.

    Take the housing bubble for instance. Suppliers were permitted to make irresponsible offers, consumers were allowed to make irresponsible deals, ...
    Permitted? If Uncle Sam tells you that you can play poker and keep the gains and He will absorb the debts to suit his agenda are you gonna bet into an inside straight? Sure, it's not your money at risk anymore.

    If the terrain and the map do not agree, follow the terrain.

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    Igneous Magma hensatri's Avatar
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    Firstly, let me apologize for the HORRIBLE grammar of that post. Just re-read it. Ugh, that was hardly comprehensible.

    Quote Quote by: finder View Post
    How can consumers be permitted free choice under your scenario considering you contend using manipulation, social engineering, and soft coercion to control the final outcome?
    This may be a misunderstanding of the poor grammar in my post. I was saying that this type of manipulation is BAD, but that it will naturally occur if the market is not regulated. If providers and consumers are given the “freedom” to act as they will, these types of social engineering schemes will naturally arise, and eventually lead to bad circumstances. Therefore regulation is a useful mechanism to hinder these practices.

    Quote Quote by: finder View Post
    People must be allowed to be irresponsible at times during their lives. They have to be allowed fail. Otherwise it isn't freedom.
    I agree, but there is a difference between letting your teenager daughter make her own mistakes, and massive nation-wide financial collapse. It is one sick puppy who will allow, say, a Great Depression, to occur and say “Eh, they gotta be free to make their own choices.” The two largest financial collapses of the last century, that is the Great Depression and the Recession we are currently in, were not caused by regulation, they were caused by unregulated, irresponsible, and wide-spread practices.

    Part of being in a community is that you are willing to reduce your own freedom for the health of the group. We accept that your ability to steal/kill/lie should be hindered, so that you can live in a community that is safer and more stable because people are not allowed to do these things. We accept that you can’t just dump your old tires anywhere you want because you share water with others who don’t want to get sick. You can’t run a diner with whatever health standards you want, you have to meet minimum standards for the health and safety of your diners and workers. In each case we give up our freedom to do something, so that we can live in a better and more stable community.

    Shouldn’t it be the same with finances? We usually say people can do what they want with their own money, because no one person controls enough wealth to destabilize the economy for the rest of us due to their bad choices, but if we have thousands of mortgage companies and banks giving irresponsible loans, and thousands of home owners taking bad deals, their freedom to do those things has serious ramifications for the rest of us, no different than polluting the water or having a filthy kitchen at the diner.

    Quote Quote by: finder View Post
    I don't know anyone who advocates pure capitalism with no regulation but the problem has always been finding the right balance between the two. My point is what does it matter if government, big business or a combination of the two are controlling things?
    I didn’t imagine you did. There are some people who promote the utterly free market, but I didn’t peg you as one of them. Yes, there needs to be a balance between regulation and free capitalism, but if the past decade is any indication, as it stands there is too much freedom, not enough regulation, to the scales went out of balance and collapsed.

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    Igneous Magma hensatri's Avatar
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    Quote Quote by: minorwork View Post
    The perception of imbalance is determined by subjective preference. There is balance regardless.
    Sure economic health, much like physical health, is subjective and difficult to pin down. But we known that a marathon runner is healthy and a cancer patient isn't, even if the exact line of health/unhealth is hard to find. Likewise in economic terms we know that an economy with a broad and prosperous middle class and lots of investing potential distributed amongst wide swaths of the demographic is part of what it means to have a good economy, and that large unemployment rates and poverty level is a sign of a bad economy. I don't have to know exactly where the balance is to say the current state of affairs is not ideal, and that there is an unbalance.

    Quote Quote by: minorwork View Post
    Permitted? If Uncle Sam tells you that you can play poker and keep the gains and He will absorb the debts to suit his agenda are you gonna bet into an inside straight? Sure, it's not your money at risk anymore.
    Yes, being permitted to gamble with someone else’s money does make you more prone to be irresponsible, but this is the classic dilemma with “too big to fail” enterprises. Let’s take ATT for example: Major telecom supplier, 80 million customers, almost 300,000 direct employees, who knows how many livelihoods are supported by them indirectly through outsourcing, services, contractors, ect.

    If ATT wants to run a risky gamble they pretty much can, the US government can’t possibly let them fail. To let ATT fall would mean a major collapse in many global telecommunications networks, and vast swaths of the population unemployed. The consequences of letting ATT fail would be too large to permit. The problem here is the existence of “too big to fail” entities, not the government that is doing whatever it can to prevent the collapse of a major industry that supports huge numbers of the population.

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    Destroyer of Worlds minorwork's Avatar
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    Quote Quote by: hensatri View Post
    Yes, being permitted to gamble with someone else’s money does make you more prone to be irresponsible, but this is the classic dilemma with “too big to fail” enterprises. Let’s take ATT for example: Major telecom supplier, 80 million customers, almost 300,000 direct employees, who knows how many livelihoods are supported by them indirectly through outsourcing, services, contractors, ect.

    If ATT wants to run a risky gamble they pretty much can, the US government can’t possibly let them fail. To let ATT fall would mean a major collapse in many global telecommunications networks, and vast swaths of the population unemployed. The consequences of letting ATT fail would be too large to permit. The problem here is the existence of “too big to fail” entities, not the government that is doing whatever it can to prevent the collapse of a major industry that supports huge numbers of the population.
    The AT&T example fails for AT&T not having the explicit pre-agreed approval of the government to take on the risk like the banks had when Bill Clinton insisted that his signature required the Community Reinvestment Act NOT be ignored before signing away the last vestiges of Glass-Steagall in 1999. The government was assigned the risk and the Financial Services Modernization Act became law.

    You're presuming government will not let AT&T fail whereas the banks had the guarantee... ...in the bank.

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