How 38 Monks Took on the Funeral Cartel and Won
theatlantic.com
theatlantic.com
R. A. Heinlein, "Life-Line", 1939
Is this common in the US? (governments openly and clearly admitting to favouring A over B, because people high up like A better) It sounds like the direct opposite of a free market to me, and isn't that what the US is supposed to be all about?
I mean, here in the Netherlands, we'd call that corruption and a scandal would ensue (which doesn't mean it doesn't happen; it just means that governments wouldn't admit such practices so openly).
Note: I don't mean to judge; I just genuinely wonder how these things are viewed by common Americans.
Case in point: [1] Caperton v A.T. Massey Coal Co: A recent case from my former home state where a coal operator effectively bought a judge, who then ruled in favour of said coal operator. The U.S. Supreme Court eventually made sense of it [and unfortunately the case was later dismissed on a technicality], but there are many, many other examples of this type of "corruption" that never make it to a higher review.
So in that sense, no, we don't really have a free market. We have a Corporate Republic that protects the interests of its largest citizens.
[1]: http://en.wikipedia.org/wiki/Caperton_v._A.T._Massey_Coal_Co.
As a Louisiana resident, I've been following this case for a while, and I'm delighted by the results. But there are many more such ridiculous laws that should be overturned. Here's hoping that the monks prevail all the way to the Supreme Court.
Then you end up with a group of established companies working to define the requirements for new companies to join that field. Of course, they try to make it as difficult as possible.
State licensing boards do the same thing. While professional licensing makes sense for some safety reasons, why in the world would interior decorators need a license? That's the case in Florida.
And the licensing process itself can be ridiculous..
Not long after I turned 17, I got a job as a pharmacy technician at a local hospital, so I had to file for a license. There was no age minimum to be a tech but you had to be 18 to get a license. Regardless, I could start working as soon as my application was filed.
The review took 3-4 months and as soon as I was rejected, we filed an appeal which took another 3-4 months. By that time, I was a month or so from being 18, so we requested another appeal and by the time they got to it.. Voila.
And that was considered legitimate..
This is part of the reason why Libertarianism is such a popular thing in America. So much regulation is introduced ostensibly to protect the common people from unscrupulous and powerful companies but when regulations turn out so often to be protections for cartels and the like, people begin the doubt the utility of the government in that area. America, unlike some European countries, tends to have a lot more government take place at the local and state levels, and while this is a good thing as it allows people more direct control over their communities, it also leads to stuff like this when folks don't pay attention. (Which happens when folks are too distracted by national elections to pay attention to local politics.)
On the other hand, a lot of Americans don't mind these kinds of things as, as often as not, they are the beneficiaries of some kind of favoritism in regulation, or it doesn't directly affect them, which is why this stuff survives.
From the article: "'defendants moved to dismiss based on the legal issue of whether protecting a discrete interest group from economic competition constitutes a sufficient legitimate government purpose.' Put more simply, it's as if they said, Our purpose here is to protect profits in the funeral industry, these regulations are a rational way to do that, and we're allowed to pick market winners and losers if we so desire -- after all, its only intrastate commerce we're talking about."
$1,470 per search/policy ... at a cost to them of about $100
The basic story is that the funeral industry completely captured the regulating of the disposal of dead people a long, long time ago.
If you read Evelyn Waugh's Letters, there's a whole treasure trove of exchanges with the Mitford sisters.
It solves the problem for both the customers/family and the funeral directors. Monument design, obituaries (with a social component), QR remembrance codes, whole webstack management (a la weebly) with custom site design and tracking & SEO, pricing and invoicing, iPad app, and more.
Done by Greg Young and Zack Garbow (YC alum, 08).
The issues they've faced tackling an old and sleepy industry averse to major change and innovation are interesting. There's a great interview on Tech.MN here with Zack about it: http://tech.mn/news/2010/05/03/minnesota-y-combinator-grad-t...
That means they will fight with all means they can to insure that their ability to protect those margins is in place.
First, in my examples above, those businesses are highly undesirable industries to be involved in as an owner and an employee, but highly profitable. Second, most of those above listed businesses are family owned with a lot of experience and background in the industry they represent.
Newcomers are viewed as strongly suspicious and since those existing entities know the ins and outs, it is an uphill climb.
This doesn't mean that good innovation cannot overcome the obstacles that these very established businesses have, but you can bet that tradition and experience in those businesses will lead to a lot of ammunition for a fierce fight when newcomers arrive on the scene.
Another good example is matrimonial services. Companies in the matrimonial industry make a killing, and with the right kind of advertising, the market can be easily disrupted.