Monday, April 14, 2008

Something to Consider about Competitive Capitalism

It's economic common sense in the United States that competition is supposed to bring the cost of products down.

At the same time, though, companies spend millions to try convincing us to buy their stuff. Marketing costs get passed onto the consumer by raising the cost at the store.

Competition also leads to more choice, which is supposed to be a good thing.

Too much choice, however, overwhelms people and at some point makes making a choice more difficult. And when there's more choice, it takes time to research and figure which brand of the product, which model of the product, which design of the product, etc. etc. will fit your needs.

Time is money. Time spent choosing a product to buy costs value, either leisure value or productive value.

So. . .do we really gain or lose freedom when there's more competition in the world to win our attention and loyalty? If there were less companies in the world trying to win us to their side, would they have to spend as much money on marketing, would we have to spend as much time researching a product?

Do we live under a tyranny of competition and choice?

1 comment:

kirkjerk said...

There's absolutely something to what you say.

I think about the auto industry... on the relatively rare times I plunk down for some serious TV watching, I'm AMAZED at how many car commercials there are. Just tons! How much cheaper would a new car be if it wasn't subsidizing all that advertising?

Of course nothing is that simple. Maybe other parts of the economy benefit (i.e. the ad industry, and related folks) Or maybe you can't get a high level of competition on features etc without that.

But still, it certainly seems like it might some kind of Tragedy of the Commons here...