Archive for July, 2011

Why capitalism turns fascist

Monday, July 18th, 2011

Recently there was a consumerist war. The Blu-Ray dvd player, manufactured by Sony, fought the HD DVD player, manufactured by Toshiba. Consumers stood in a circle around the fight and watched. They had learned their lesson from previous fights (Betamax vs VHS) and weren’t going to part with any money until they knew who was going to win.

This is capitalism as it is supposed to be: firms fighting it out to give us more choice at a reasonable price. Except in this instance there should have been more fighters in the ring. Two fighters is looking a tad suspicious for a capitalist contest.

Anyway, Sony came out victorious. People knew where to put their money and the units started flying out the door. The best product must have won, right?

Wrong.

It was well known at the time that Sony was making a huge loss with every PlayStation 3 it sold (the machine had a Blu-Ray player built in).  Sony’s strategy was clear: undercut the competition until they run out of money, then the market will be wide open for the monopolistic dominance of one company. It’s a well known gambit. Regional newspapers used to do it all the time to upstart magazines appearing in their territory which were given away for free. These magazines would eat into the newspaper’s advertising revenue by offering a cheaper alternative. The newspaper’s response would be to slash its own rates until the upstart starves of income. Once dead, the newspaper would safely put its own rates back up to immodest levels.

What we have instead of competition then, is simply, the survival of the richest. In a market of few players, the player with the deepest pockets wins. And we can see this happening today. Look at practically any market in the Western world and a few giant players dominate. How many supermarkets can you name? Presumably then, the logical endpoint of capitalism is a monopoly. Game over.

Should firms be allowed to sell their products at below cost? Surely, some would argue, that option is part of the freedom of capitalism? But corporations are required by law to maximise their profits for their shareholders so is this strategy unlawful?

This is why an independent referee with meaningful powers is required in any market.

This gets my vote

Monday, July 4th, 2011

no-confidence

Rightly or wrongly, political cynicism prevents many people today from getting involved in the democratic process. The whole procedure has an air of hopeless inevitability about it, like applying for Olympic tickets — vote as many times as you like but the corporate sponsors always get in.

This has resulted in a huge proportion of the population — more than half — abstaining from the process and producing a result which is divisive and unsatisfactory. Inevitably, a death spiral is produced and fewer and fewer people feel their vote has any relevance at all and even if they did vote, there is very little to choose between the cloned party leaders.

Here is my solution:
At the bottom of every ballot paper is another box which the voter can put a cross in: the ‘no confidence’ box. By casting their vote in this way, the voter is making a positive statement about their disenfranchisement from the political process. It also sends an unequivocal signal to the political parties that they have lost touch with the masses. So instead of the political leaders simply shrugging their shoulders at the poor turnout for the vote and continuing with business as usual, they would have to face their humiliation if those fifty odd percent of the population who currently don’t vote, stated publicly that they had no confidence in the current crop of privileged professional politicians… Having this extra dimension to the voting system would also assuage the guilt of the many people who feel voting is a waste of time but feel duty bound to do it because of all the human sacrifices in securing their right to vote.

Of course, the fun starts when over fifty percent of the population choose to vote, ‘no confidence’ in any election. What happens then? Perhaps a new election could be run with entirely different candidates?