It is an interesting observation/model but calling it a cartel is a little bit over the top. The good/service reaches its market price regardless of whether it gets there from lower or higher prices.
It is an interesting observation/model but calling it a cartel is a little bit over the top. The good/service reaches its market price regardless of whether it gets there from lower or higher prices.
We like free-market economics because they get good results. If there's a market failure and the standard free-market economics aren't applying, like in the case of a cartel, then that's bad and we want to change it. Bad results are bad, good results are good.
It must be nice to live in a world without regulatory capture.
"Want to change" doesn't imply "will do less harm than good" in this world. In fact, "want to do good" is pretty much the basis of all of the really huge problems we have.
Since you didn't make an argument I won't do the same disservice to you. The relevant laws in this case are anti-trust. I support them, generally, as did TR who introduced them. Regulatory capture is a problem to be battled, not a reason to throw your hands up and say "oh well, guess i'll just let myself get screwed by a couple people who managed to lock up an industry through collusion".
That's nice, but the question is whether the realized benefits exceeded the incurred costs.
> Regulatory capture is a problem to be battled
You're assuming that you can win the war. Some evidence would be nice.
The significance is because of the loss of efficiency, not because of the name/label given, or how the price is determined.