It's not a crime if we do it with an app
pluralistic.net
pluralistic.net
Then, there is a switch to the most traditional of businesses with the most traditional business models. Who, the author argues, are engaging in price gauging. In the second paragraph he claims that apps cause this inflation ("so much of inflation can be attributed to a crime, done with an app"), then goes on to list a couple of traditional companies who are, he argues rising prices above inflation. And who he partially blames for inflation.
None of the examples he gives support the case he is trying to make in his title. Apparently being an "App" has absolutely zero to do with getting away with financial misdeeds.
None of the questions raised by the title are even investigated. And the core argument, that traditional companies are causing inflation, is never argued for. The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone. The source of the inflation being gone does not cause inflation to reverse. And so the fair market price would not get lower, getting something so basic wrong seems ridiculous for someone leveling serious accusations at companies.
He is saying that the traditional businesses use an app that allows for a legal way of price gauging.
> The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone.
The author claims, that these companies raise prices more than inflation based cost increases in production would allow for.
That's just supply and demand? People get mad that when there's an oil shortage, that oil companies raise prices above the cost of production, but they're happy to see oil companies' margin collapse when there's an oil glut.
It's a bit different when they all (i.e. cartel) agree to keep the same price even after the shock has passed, isn't it?
I also found this for criminal prosecutions under section 2 which is the section covering illegal monopolies. Pages 12 and 14 have some quick summary charts and tables.
https://www.americanbar.org/content/dam/aba/publications/ant...
Also keep in mind that the existence of the law guides decisions around compliance. There is ample evidence that all of the big decisions at FANMAG are viewed through compliance with anti-trust as a concern. Basically, a lot of big companies haven't been prosecuted because they have armies of lawyers working on where exactly that law kicks in, and how much they can step over the line without putting themselves at serious risk.
The existence of the law itself is a deterrence mechanism. It just seems like the justice department is hampered with a century old law in dealing with a modern world.
I personally think that we should be more zealous in enforcing, or better yet, pass better laws. Move the line way back, essentially.
Go look up price fixing, and tell me why that statute wouldn't apply here, if you remain unconvinced.
This is in contrast to a healthy market, in which producers compete by lowering prices to the point where the producer would go out of business.
It’s worth noting that, in classical economic theory, the price in a competitive market is set by matching supply and demand, but the price in a monopolistic market is set higher such that the profit (“producer surplus”) is maximized, which harms the buyers (“consumer surplus”) even more than the amount by which the seller benefits. The net loss is called deadweight loss, and one can argue about whether and how government policy should be arranged to minimize deadweight loss.
Those "disruptions" you refer to create periods of "lack of supply" (i.e., less of the goods). That is what the "disruption" is, a temporary reduction in the "supply"
> The demand has not changed in any material way.
True, but, during the period of "temporary reduction in the supply" (i.e., the disruption) Econ 101's supply/demand curve will predict that the price will rise to make the "demand" during the period of limited supply equalize with the new supply level due to the disruption.
What often happens (and you see it most clearly with gasoline prices), is that the price reacts extremely quickly to the supply disruption by increasing fast (seemingly within hours). But then, when the "disruption" clears, and the supply amount returns to normal, the price tends to slowly drift downward (if it drifts downward at all).
I'm not stupid, I understand supply and demand. COVID was 4 years ago. Explain the $8 box of cereal.
Many people are buying the cereal for $8. Its that simple.
There is enough demand for it at $8 that the company is happy with the market clearing their supply at that price point.
If people were not buying the cereal at that price, they would lower it, or have gone out of business by now.
If someone could produce a substitute for far cheaper, and undercut, they would, and they do, but consumers are partial to name brands.
Cheerios are $5 at Walmart, People are buying them. Those people that think that $5 is too much can and do buy the $2 off-brand alternative.
Not when a cartel controls 97% of the market, distribution, placement, and is very keen on maintaining the status quo, as posited by the article.
It shouldn't, because if it was, the cost would be pushed down near it's landed cost. That's a result of companies (both CPG producers and food market retailers) having concentrated market share in contravention of the law.
I'm old enough to remember that there used to be choices for different brands of various types of flakes: people use their dollars to exercise choices in the space of products to choose from, and they aren't any longer looking for a "dirt cheap corn flake shootout"
yes, there are also nonlinearities like minimum viable factory size, which leads to market concentration heading toward monopolization, but those factors are not specific to corn flakes nor driving that market.
did you know that Frosted Flakes are actually just stale corn flakes that are revived by spraying them with sugar? I used to work for a company modelling factory automation, and that was part of the model. So, if you don't sell sugar cereals, you're not as efficient.
The competition is clearly Cheerios which sells for $4.93, which is still not $8 (I did find Cheerios priced above $8 at other stores, but only in family and giant size which are 50-75% larger): https://www.walmart.com/ip/Honey-Nut-Cheerios-Heart-Healthy-...
I'm not making up the numbers. Or the substitutes. Every grocery store I go to has name brand cereals, and then in the exact same aisle, off-brand alternatives that sell for far less.
So yeah it seems like a pretty competitive market to me if I can buy an alternative for 40% of the price of the name brand by reaching for a lower shelf. Is $5 a lot for a box of cereal? Maybe, that's up to you as the consumer. But, name brand cereal is also not a necessity, you can live a very happy life, eating healthy breakfasts without ever having touched a box of cereal.
Again, it seems like a pretty competitive market. Cereal is not a necessity, there are tons of other breakfast foods that substitute just fine, there are a variety of companies selling more or less substitable products through a variety of outlets, and there are no real regulatory barriers to entry. If I don't like one retailer, I can choose from dozens of others owned by different companies. If you think that there is a ton of margin being made, this is your opportunity to get rich selling cereal, or even just investing in General Mills (which has a profit margin of 12% on their goods, and has under-performed the stock market as a whole).
If you don't like the price of an $8 box of cereal, go buy the $5 one, or the $2 one, or don't buy any cereal at all and eat yogurt, or order from Amazon.com where you can get the best of all worlds by having name brand Cheerios brought to your door for $1.99: https://www.amazon.com/Honey-Cheerios-Gluten-Free-Cereal/dp/...
The competition is at Amazon, where I can buy a box of Cheerios, delivered, for $1.99. Or at Walmart where I can buy name brand cereal for $5, and Walmart equivalents for $1.97.
Now, all these grocery store do have something in common. They are all in California (if we pick that state), so they all share the high cost of real estate, the high cost of custom formula gas, the high taxes, etc, etc, etc.
And the fire truck example, it correct, is much more of a problem. It's not hard to manufacture breakfast cereals (and clearly not THAT hard to distribute them) or to bring potatoes to restaurants! It's much harder to build reliable fire trucks.
Delivery optimization, logistics, and last mile operations are an unfathomably difficult problem(s) to solve, so much so that the entire world participates and there are still enormous gaps in efficiency, many that likely will never be solved due to physics.
I know you're plain wrong about it costing "a dollar" to deliver. Even if it did, you do not pay for just the operational cost, you pay for the convenience, expertise, reliability, or many other factors that comes with procuring a contract/agreement.
If you have something to prove, then you're welcome to show the world how its done. Doubt me all you want, but you can't doubt the rest of the world.
> It costs pennies to produce, maybe a dollar in landed cost
Kellanova last had gross, operating, and net margins of ~35%, ~13%, and ~8%, respectively [1]. Likewise, Walmart achieved ~25%, ~4%, ~3% [2]. This isn't really compatible with "someone makes 700% of net profits on this box of cereal", unless you assume cereal is single-handedly subsidizing huge loss leaders for both its producer and retailers.
1. https://www.macrotrends.net/stocks/charts/K/kellanova/profit...
2. https://www.macrotrends.net/stocks/charts/WMT/walmart/profit...
Most of the cost of the cereal isn't the cereal. First you're paying for the store. That's real estate costs -- currently excruciating. Property tax and insurance, based on the real estate prices. The store needs heat and light, that's oil and electricity. There are people who work at the store, has your state recently increased its minimum wage? Grocery stores that don't buy advertising have fewer customers and have to amortize these costs over fewer sales, so you either have higher costs per unit because they didn't buy advertising or higher total costs because they did, etc.
The next question you might ask is, why don't they get rid of the store? Ship the cereal to your door. But it's like 8 oz of cereal, you'd get killed on the shipping. To make it work you'd need your whole grocery order to be delivered in one trip.
That could actually be an interesting business model. Instead of "free shipping" encouraging you to buy one item at a time but then the shipping cost is really baked into the item price, have "flat rate shipping" where you pay e.g. $35/order for shipping with no item limit. Then if you're buying what would otherwise be $400 in groceries for $200 by cutting out the retail store, paying the $35 is totally worth it, and you could be adding items to your cart all month for a scheduled monthly delivery.
But is anybody offering that?
Same box of cereal costs the same in Southern California and South Carolina. South Carolina is cheaper in every way - electricity, rent, insurance, and labor. Same $8 premium cost for a commodity product that costs a dollar or so to land.
No one is competing for the customers' dollar, they are imposing a price scheme because there is extremely limited competition and distributors are being allowed to abuse their pricing power.
https://worldpopulationreview.com/state-rankings/grocery-pri...
Could be California's higher population density allowing store costs to be spread across more units.
Also unexpected: The highest and lowest grocery prices in the continental US are Vermont and New Hampshire, respectively, and they're geographically right next to each other with nearly identical cost of living index but Vermont is paying 2.7x as much for groceries. But New Hampshire does also have 2.2x Vermont's population density.
In any event, price fixing doesn't seem like a strong explanation, because what are they doing, fixing prices in Vermont but not in New Hampshire?
But Potatorac and Agri Stats do. They are price-fixing right out in the open.
It is 21st century version of a cartel.
Cartel via an app. It should be illegal. I was hoping feds going after RealPage would be a deterrent to that trend. But with the new admin, yeah thats over.
If this fits the legal definition of a cartel and price fixing, I can’t say. I’m not a lawyer nor do I know what US law says on this matter. However, it’s fair to say there’s a bad smell to the whole affair.
There's a lot of other stuff that is unclear (questions in the title? the article says inflation goes in reverse?), but that one thing neatly explains the vibe that might have driven the rest.
Traditional rental property corporations, were pre-existing, and also adopted the use of an 'app' that allowed them to raise prices over the inflation rate.
So, traditional corps, taking advantage of the new 'app-crime-for-free' model.
But really, where the logic broke down a little. Was all those 'crime-apps' are actually reducing prices for most part. So should help inflation not hurt it.
If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently. Let them go through a cumbersome govenment approval process for price changes or something to cap margins. Price fixing cartels need to be busted more aggressively.
All companies are greedy. That's the reason for existence. Your point that monopolies and oligopolies need to be crushed is very valid though. I wish more mergers were rejected in the first place.
Regulating prices is a recipe for disaster though.
That's an assertion, not a statement of fact. Pricing in natural monopolies is a mature subject, and public utilities have been a thing for over 100 years. Also, pricing for medical procedures is regulated in Europe, and it works extremely well.
Setting prices where you could just have a functioning market has historically been well proven to lead to disaster. Look at any communist country. The GDR ended up allowing luxury stores that were not price bound and they were a huge hit for a reason.
It does not work “extremely well” at all, it results in shortages and wait times exactly as you would expect from economics 101. I’m speaking from personal experience having been through it myself but feel free to look up how many Canadians go to the US every year and pay out of pocket for more evidence.
Black and white oversimplification that muddies the water.
You really can't think of two companies with incredibly different levels of "greed"?
There are a lot of rules whose de facto consequence is to prohibit describing the true reason someone is doing something instead of actually prohibiting them from doing it.
1. company decides to push the boundaries of the socially acceptable when it comes to cutting corners (e.g. screwing their customers, or employees, or environment, or debtors)
2. People don't like it, but rationalize this as being a natural consequence of incorporation and the profit motive. Hence while they grumble, there negative impacts to public perception don't actually cost the company as much as you might think
2b. Even if there's a boycott, there will be vocal minority that thinks it's all a bunch of whiny <target audience we're better than>. They'll actively harass or undermine said boycott or backlash, even if in a purely egotistical sense their interests are actually aligned with the boycotters
3. Social norm is reset; we all collectively expect even less from companies. That doesn't however mean the new norm is better or maintained, because as soon as there's some new major conflict between short-term profit and maintaining a decent reputation in public, we go back to step 1 from the new, lower baseline.
Stuff like increasing partisanship, and decreasing incentives for journalist (whether profession, citizen or influencer) to maintain their professional standing (as opposed to targeting clickbate) probably smears those gears nicely.
Many companies have historically clearly paid well over the odds to maintain their reputation, and done well doing so. It's just not true that nihilistic short term greed has always paid; obviously it didn't and still doesn't really. It profitable to do the little, but simultaneously also to do as many cheap things that materially affect public standing as possible.
By promoting the profit motive past a merely utilitarian means to an efficiency-optimizing end into a matter of national identity and point of distinction vs. in particular the USSR, we've shifted our culture beyond what's really rational. We (as a society) don't merely respect and understand the profit motive; we see it as a sign of merit - and significant enough merit that "winning" on that scale excuses a lot of other bad behavior.
The fallacy is assuming that the government will make everything cheap for consumers.
In practice, government regulation of prices just changes the game. Look at any market with rent control: There are numerous meta-games around building or not building new supply, landlords are incentivized to not fix units because they know tenants don’t want to give up their rent control and move, and a new market emerges where people illegally sublet their rent controlled apartments because it becomes attractive to take advantage of the market demand that landlords aren’t allowed to capitalize on.
The other fallacy in all of this is thinking that companies control both supply and demand. For nearly all commodities, there is a price where consumers won’t pay for it. If rents get too high, people move to a different city. If gas gets too expensive they start carpooling and looking for WFH jobs. If eggs are too expensive they eat something else. These choices make people angry as hell, but there’s no denying that these choices exist. Companies can’t push past these limits and force people to buy at any price. They still have to discover that point on the supply and demand curve.
With what money? It takes three months rent up-front to move (first+last month rent and a deposit equal to one month rent) up front. People _need_ a place to live and will spend every last dollar to not be homeless.
Which is what, exactly? The US is per capita richer than almost all EU countries by a huge margin (with a few small exceptions mostly enabled by regulatory arbitrage targeting US money), so forgive me if I don't take your seething commentary about the US economic apparatus very seriously.
In reality, comparative advantage and specialization dynamics do not uniformly equilibrate on monopoly markets.
The entire food production and provision supply chain has razor-thin margins. If you're hyperfocusing on that industry, it's a sign that your heuristics are pointing you at the wrong things.
https://en.wikipedia.org/wiki/Standard_Oil
Carnegie Steel: Government intervention. The federal government imposed steep tariffs on imported steel, shielding domestic producers like Carnegie from foreign competition. Without those tariffs, cheaper British/German steel would have kept Carnegie’s dominance in check.
Southern Pacific Railroad: Government intervention. The federal government gifted it, through the Pacific Railroad Acts, millions of acres and subsidized loans. This state-sponsored land monopoly let it block competitors from critical routes.
What is that natural end state? Natural monopolies are exceedingly rare, almost all monopolies are the result of government intervention.
I'm sure there are plenty of cases where significant competition is a natural end state, but how common those are in comparison? I'm curious.
After all, the natural inclination of a powerful elite is to protect their interest. It's business 101 to want a moat, and tearing down one set of artifical legal protections that allows for a moat allows on the other hand for the far more extreme quite physically violent moat in the form of a putin-esque kleptocracy.
The argument merely sounds convincing because it's very selectively implying that certain monopolies are created by state power and might be weakened by free market principles without considering what a free market even is (generally a regulated one), nor addressing the fact that other monopolies will arise precisely because because the lack of regulation allows winner-take-all brute force strategies to work.
That doesn't mean Milton's ideas are without merit - but that there is a breaking point; dogmatically hoping for anarchy to avoid harmful centralization of power is problematic because of the dogma; not because it's never a valid approach.
But sure, if you're going to embrace Milton's (intentionally) vague proposition in the way it was likely intended - to provoke thought - then sure; there are state regulations that are in part to blame for some of today's near monopolies - the interaction between intellectual property, incorporation, and state-enforced contract law. As a matter of debate, sure, it'd be interesting to weaken all three and in particular their interactions. I just highly doubt that's very practical, nor would it be very easy to predict the outcome, especially once international power-plays start circumventing even the best of intentions.
> Inflation has lots of causes, it's true.
https://fred.stlouisfed.org/series/M2SL
Algorithmic price fixing is certainly a not-insignificant part of the issue. But it's strange to see zero acknowledgement of the massive increase in money supply over the same time period. When doing causal analysis, we need to examine both the private sector and our government.
When you use M2 as denominator for egg prices, we're at the same place we were in early 2016: https://fred.stlouisfed.org/graph/?g=1DcVw
When the basic food items become ferraris, people have no choice on that.
The economy doesn’t work like that. You can’t inject money but only have it apply to specific sectors.
Everything is interconnected in the economy. If a lot of money comes into the market it will cause a lot of activity, changes in demand, new job openings that entice employees upward, increased wage demands for jobs, new hires requiring higher wages, rising costs to cover those wages, and the cycle goes on and on.
You can’t isolate the effects of inflation. At the scale of economies, inflation effects ripple through everything.
Also, eggs are a terrible indicator. Did everyone forget about the bird flu? It’s a supply problem.
Because when you look at inflation in the period of say ~2000 to ~2025 [1] it's really not very obvious that there's an increase in M2 from '08 onward.
Talking about M2 as a source of inflation is like shouting Red at a roulette wheel. Sure, sometimes the ball will land on Red but your shouting is a non-sequitur on the result.
They look pretty similar to me. Chaotic in the short term, but averaging positive between 0-1%. In other words, slow but consistent exponential growth. I didn't say anything about a discontinuity in '08, I'm not sure what point you're trying to make with that.
Edit: here they are both plotted side by side in those units: https://fred.stlouisfed.org/graph/?g=1DcZr
Now, if what you're trying to say is that the much larger (non M2) eurodollar currency correlates to long term global growth and inflation, yeah that's true. There is a trillion $ industry maintaining that called the banking system. But the idea that eggs, oil, lumber, or rent are well correlated is not even a funny joke. Gold and bitcoin are a bit different because they are so financialized, but I wouldn't go day trading them just based on Fed stats either.
Why would one cause of a phenomenon explain another cause?
The hypothesis "both wood and plastic burn" doesn't require wood to explain to existence of plastic.
This graph is absolutely insane. As I am completely unfamiliar with what is represented, would you have some pointers on where to start to understand what it represents?
I'm particularly intrigued by the very sharp rise during the covid time, when the global economy was in taters.
It sounds neat but there’s little evidence of that occurring on more than a temporary basis during covid. But covid also caused supply shocks.
It seems that what happened is covid showed companies what they could get away with both because of decades of consolidation and because of new ways of colluding.
Crackdowns do take time in the US but there is hope. See e.g.:
https://www.justice.gov/opa/pr/justice-department-sues-realp...
By the way, I’m not condoning government ownership of corporations as the ideal solution, but I absolutely do not approve of huge corporate subsidies with no value in return for tax payers and handwaving small fine penalties for obvious monopoly behavior.
This is a weird and emotionally loaded statement. Properly stated, the top four frozen potato producers have 97% of the market share.
That doesn't sound odd? In a mature market with very little technology innovation (potatoes) and very little geographic specificity (frozen), how many companies would you expect? How many laundry detergent companies are there? How many cereal companies are there?
How was this different in the past, except going back to before the interstate highway system?
Properly stated they colluded to fix prices. This is the definition of a cartel.
The issue of having four players is that it makes the coordination problem of colluding relatively easier, but they are price fixing via giant data warehouse which is algorithmically suggesting how to price.
It’s like Real Pages for potatoes, or at least this is what the article claims and what is interesting.
In an era where you can have a computer churn through a trillion datapoints to arrive at an optimal price, is it even possible to have competitive pricing as was once conceived of? The elements of uncertainty and risk have been so thoroughly eliminated that inflation seems almost unstoppable as you have such a strong signal for what the market will bear.
It’s an interesting question for the nature of free markets but few seem to have caught on to this dynamic…
Business concepts are easy. Actually doing business is hard no matter what it is. Especially when for one reason or another, 97% of the market is controlled by the potato cartel. Chances are you will find a Great Filter somewhere that ensures this cartels market share is maintained.
Yes, it’s hard because you’re trying to fight a cartel. And furthermore, the cartels distribute their products to other cartels - grocery stores that have consolidated over the years into Walmart, Kroger and Publix. And if you don’t like it, you have to change the laws which are controlled and dominated by the cartels and their donations. Thanks to citizens United. The US economy is far from capitalism.
when I hear a “farmer” complaining on the news about losing illegal immigrants and how they can’t afford to pay living wages to people working on their farms. News organizations make it sound like these farmers are individual small businesses when they are actually huge corporation themselves taking advantage of workers.
https://www.washingtonpost.com/business/2024/11/20/potato-ca...
MAGA give zero fucks about antitrust, and antitrust or lack thereof has nothing to do with the creation of MAGA. That's such an absurd argument I have no idea how to even respond to it. The cornerstone of MAGA has always been nativism & reactionary politics.
I'm very, very tired of leftists shamelessly lying about anything and everything they can just to smear the Democrats.
Lina Khan had little to do with it. What significant mergers were squashed that made a difference? What significant monopolies were busted?
There are many but off the top of my head Kroger buying Safeway. Visa buying Plaid. Nvidia buying Arm. Didn't they block a cell phone merger? A mattress merger?
The only one I found a time series for quickly is Lamb Weston: Their margins steadily went down after 2019, then surged quite substantially, and by the end of 2024 were more or less back at their 21/22 low points [1]
Additionally there's apparently a class action suit against the companies mentioned which was filed in November 2024 [2]
I don't know enough about this market to judge whether something shady happened, but it seems like both of those facts are relevant to this article.
1. https://www.macrotrends.net/stocks/charts/LW/lamb-weston/pro...
2. https://www.hbsslaw.com/cases/frozen-potato-products-antitru...
Just look at PBMs. They all supposedly have small margins. However, once you peel back the layers, you see rebates and kickbacks and all kinds of illegal schemes to hide the real income.
I understand there will be a demand for French fries from consumers, but you don’t have to serve them. This is something I appreciate about Greek cuisine. There are so many wonderful foods spawned from input constraints. Sugar was a luxury in Greece during the 20th century while honey was more readily available, so you see many desserts sweetened with honey. The Lenten and nativity fast call for essentially a vegan diet, so there are numerous recipes that don’t require animal products and are cheap to make. Eggs and lemons were readily available, so they created avgolemono soup, which is a modest, yet delicious dish.
The overall American cuisine seems unwilling to adapt. The tricky bit is, that’s probably correct from a business standpoint. I’ve heard, “If we don’t sell hamburgers at airport restaurants, they’ll fail.” from a consultant in the airport terminal industry. It’s as if we’ve grown to expect seasonal fruit and vegetables year round as a mindset for our cuisine. Surely, there’s room to be more flexible with what we eat, which would allow business owners to serve food based on what’s readily available and cheaper for them to serve.
Now if absolutely every type of food is experiencing price gouging, that’s hard to get around. But I think there’s some middle ground, which requires serving different food items.
However even in this case customers, or Big Potato buyers, can simply ally and create a new supplier where they are shareholders.
And yeah, it’s hard to do once, but obviously it’s dramatically harder to do after someone has already done it.
Bundle operating system with CPU.
But, both lost in the end, despite abusing monopoly and government intervention did not really help.
And in any case, no one is arguing conglomerated companies have no vulnerabilities or never lose.
I'm saying they have advantages, which is obviously true by the fact that conglomerated companies tend to dominate their sectors.
If there was big money to be made undercutting Big Potato, someone would do it. Even my CSA grows potatoes.
Your local CSA is also unlikely to be audited by the FDA unless they tried to go larger than your community.
The customers who buy the product with the lowest price.
A very low price is much easier to achieve if you can make use of economics of scale.
There are some more ethical companies, too. In N Out french fries are $2.30, certainly due to the fact that they own their supply chain and cut potatoes in house.
The only way you win is either major disruption (which is usually not possible), or having a bankroll comparable in size to the incumbent. But anyone with enough cash to enter the market is doing so for a return-on-investment, with just as much profit motive as the existing players.
Examples:
- laws and regulations provide great barrier for newcomers
- brand recognition (would you better by a know cigarette brand or unknown cheapest one?)
- technical and/or financial and/or IP investment, either because the INDUSTRIAL process need costly tools (so you need to be big from the start) or because you need some really specific know-how
- ...
If you can finangle a wedge of the market, they can just buy you, or apply local pricing pressure in lock-step based on their data broker recommendations.
I'd add though that companies don't have to be "ethical and slightly less greedy" to compete on price. Competing on price is a natural way to gain market share. Nobody would say that Bezo expressed ethics and less greed when he said "Your margin is my opportunity"
Companies should charge the real equilibrium price of a product. It's an important signal to lower or increase supply. However, they should not create a coordinated scarcity or otherwise artificially force a higher price than the equilibrium price. This can only happen through (illegal!) cartels or too much market power (which the government is supposed to prevent).
As usual ee cannot ask for better people but need a system that makes the wrong people do the right thing.
Though the above is only true to a point - obviously if the margins get high enough or product deviates sufficiently existing businesses with related interests will step in: witness Costco's chicken business.
So maybe the question is less why isn't there more competition and more so why haven't restaurants vertically integrated their potato supply? The main theory I'd have is that price increases haven't negatively impacted their margins or revenues sufficiently yet.
I like this question because it inspires the thought of an "incrementally more ethical firm". Ethics can be roughly characterized as constraints on behavior, therefore if two firms, all else equal, differ then the ethical one is naively at a natural disadvantage, having fewer degrees-of-freedom in any situation. The classic response is that cooperation between firms is itself a powerful advantage, and that ethical behavior ought to yield advantages to cooperation that outweigh the cost of behavioral restrictions.
I believe that the equation changes when ethical behavior itself is successfully attacked and associated with weakness. What happens to a bank if everyone believes it will fail? It fails. What happens when everyone believes that morality is weakness? Morality IS weakness. At that point the reputation and cooperation effects are erased, and only the loss of freedom remains. At that point the culture shifted from the "cooperate-cooperate" Nash equilibrium to the "defect-defect" one. (Religious belief tends to unequivocally favor "cooperate-cooperate" and can therefore both resist this transition and assist in the reverse transition, which adds to religion's social utility.)
And even assuming companies don't resort to skeevy tactics to prevent competition, the companies that incentivize profit the most are going to have the most capital to expand and have the highest growth out of any potential competitors and fully saturate the market the fastest.
As tech industry practicioners, we are some of the only people in the country who have both the desire to affect positive change, AND the agency to do so. Don't work for these companies. If your company does business with these companies, criticize it and encourage your coworkers to do the same.
Airbnb or Uber, on the other hand...
And yes, maybe there should also be penalties applied personally to the executives who break these rules. But that’s a can of worms and it might be unnecessary.
I run an ecommerce site. It's hard as a small retail operation to keep inventory in sync and model the complex network of supplier relationships for special-orders: we can get some products in a day, some things in a week, some in 6 months. Nonetheless customers assume that the computer is the word of God, and that if the website lets them order a product that product must be available immediately.
When you make an app to do something that is illegal, people for some reason assume it is legal (or at least less bad) to do in the app. The presence of a computer intermediary somehow cleanses the action of moral ambiguity. I think this is because most people don't understand how computers work, and they assume that "the computer is always right".
This goes as far back as Babbage:
On two occasions I have been asked, 'Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question
Here are some better explanations: - the "breadbasket of the world" (Ukraine) is at war - wages are up in the agricultural sector (a good thing overall but it's not free) - egg shortage - years of government deficits have massively increased the money supply...(more money chasing the same economic output)
I recall reading that with apartment rentals in NYC, the problem was (is?) apparently that there are literally contracts in place preventing landlords from deviating from the recommendation. That's the crux of the problem, not the app recommendation itself.
Are we sure the causes in these cases aren't analogously different? For example, the part about 97% of a market being controlled by one company sounds like a monopolization issue rather than anything to do with an app.
Ofc it’s the same outcome: price fixing.
Seriously? I read the entire damn article before posting. That's why you see my comment had "the part about 97%" in it. It's referring to what was in the article. Was this really necessary?
> it’s using the technology as a way to dodge the law. In this case, we have laws against price fixing. Using an app for price fixing is a way for the price fixer to say, hey, it’s not me, it’s this other company that tells me pricing.
And I was telling you I don't buy this. Because if someone can make more money from defecting from the coordination strategy, they absolutely will. Unless, you know, 97% of the market is owned by one player. Or unless the parties can legally prevent each other from defecting. Or unless they can just blatantly collide illegally because law enforcement is lazy. Etc.
I gave you an actual example. The rental thing in NYC has a contractual price enforcement mechanism that is the real culprit. Why the heck do you think they include that provision if merely having an app was enough to fix prices and obfuscate it?
Useful analysis of consolidation and resulting price increases due to "inflation", even if the title could use re-wording.
Interesting that -- especially in an election cycle -- the government is blamed for "inflation", whereas a large contributing factor -- and the main one in this case -- are companies which control a market segment leveraging opportunities (COVID supply chain breakdowns, etc.) to increase their profits at the expense of the Average Joe.
We recently had to do a shower remodel. The salesperson told us that the price was 50% higher now than it was pre-pandemic. Prices shot up during the pandemic due to the known supply chain issues, but never went back down even after those supply chain issues are resolved.
Another good example of this are road bikes (I'm a cyclist): You could get a nice carbon bike for $2500 before the pandemic. Now it's $5000 for essentially the same thing. This is not explained by supply chain issues or an increase in the money supply.
But the cost of raw materials did not rise 50% to 100%, neither did wages. Residential rents jumped, but commercial rents -- which is what would affect cost of business -- did not.
So there's not really any way to explain this other than companies along the chain realizing that the prices are sticking (meaning customers are still buying) so there's no reason to go back. But the reason that the customers are still buying is because in many cases, as the article brings out, there is serious consolidation of the market which means that there's not enough competition to push prices back down.
> If companies like trek were making appreciable more profit margin today than 7 years ago, it should be apparent in their quarterly reports no?
Trek is private so we can't know. But in the original article the author cites examples of companies with a monopolistic position increasing profits. Also, it may not be the consumer-facing company -- Trek -- that is taking the bulk of those profits, but a supplier with a hold on the market (i.e., Shimano-SRAM duopoly) that is.
I've had the same opinion for a while now. Something has malfunctioned with the market economy if jacking up prices does not bring in competition that can do it for less.
But there are many countries were companies cannot grow huge because the underlying economy is small and not part of a large trading block. (Georgia, where I'm currently living, is a good example).
People are worse off in these countries: Wages are lower in dollar terms. Locally produced products are of poorer quality and cost more.
So, although huge companies make big profits, their economies of scale do benefit their customers and staff.
(1) corporations are not people. They are groups of people acting in concert under the direction of a small number of, or even one, person. They get legal immunities that individuals and unincorporated companies don’t. It is bat shit crazy to legally treat them as people for the purpose of “rights”. They don’t have morals (literally corporations are amoral entities). They concentrate power. We should be limiting them; not doling out rights to them.
(2) the best way to limit corporate power is to make it undesirable to centralize too much corporate power. I think that corporations should have a tax rate base on power - eg increasing based on revenue and number of employees and market share. The rates should increase with increases in any of these numbers. If done correctly, it would eliminate the need for antitrust and much oversight as it naturally deters centralization. Lots of details like shell corporations controlling other corporations, etc, but do-able.
There needs to be a way to reverse IPO companies as spin outs much easier, with some kind of government incentive to do so. It would unlock alot of value instead of causing it to be withheld.
Some examples of this would be google splitting out search, youtube, and AI products, with the datacenters and IP staying under alphabet.
But an app like Skype made it possible for people to communicate for free. Was it bad? Do we need government to define what kind of business people can conduct?
After all, inflation is measured by tracking changes in consumer prices.
That’s not correct. The Heritage Foundation does not state that monopolies are efficient, their stance on antitrust laws and monopolies emphasizes *consumer welfare and economic efficiency* over simply protecting smaller businesses or achieving other social goals
https://www.heritage.org/government-regulation/report/antitr...
I wonder what else is inaccurate in this article...
"As of my last knowledge update in October 2023, Cal-Maine Foods is one of the largest producers and marketers of shell eggs in the United States. The company has a significant market share in the egg industry, often reported to be around 20% or more of the U.S. market."
Take Netflix's incessant price gouging. Or all the examples in this article. It's always funny seeing telco operators complaining about regulation and pleading that they'll self regulate and be good citizens.
Might it be an overly large regulatory burden on starting said competitor?
But sure, just go "start a frozen potato company". Why didn't anyone else think of that until Hacker News?
This is the regulations I'm talking about.
> just go "start a frozen potato company"
No thanks, I bet the regulatory burden is absurd
There are other damning facts too:
> private equity companies have rolled up all the fire truck companies, hiking the price of trucks, creating backlogs and bottlenecks for parts and service, and starving the nation's municipalities (including Los Angeles)
Capitalism is dead. Long live capitalism.
Agreed, but it is IMO a flaw in the author's work that they chose to lead with Airbnb and Uber. You see this very often with criticisms of the tech industry, and while it is understandable (they're the 2nd and 3rd most visible examples of what the author is describing; I'd put crypto 1st, though), I think it just hurts the point and certainly the appeal of such articles. Frankly, if we ignore the real issues they cause, how many people in the real world actually care about Airbnb and Uber dodging regulations? The public-opinion tide miiight have turned against Airbnb by now, but I'd wager that for most people, Uber/Lyft are still fine, and an overwhelming improvement compared to the taxis we had before. (I don't even use them more than a handful of times a year, but that's way more than taxis.) Even for Airbnbs, I suspect most people think nothing of them; a small chunk see, like, those funky, slightly-cheaper, hipstery accommodations they might have stayed in once or twice; and a vanishingly small percentage actually care about property shortages or regulatory issues.
I realize I've detracted from the main point, and I apologize, but it is something people will have to deal with if they want to make this point (tech industry regulation) to the wider public. Using Airbnb and Uber as the headline examples of "tech dodging regulations" is an awful idea when most people are ambivalent, if not outright happy, that the regulations were dodged in those cases. We will need something a bit more salient.
No it isn't. How is potato farming "tech"?
- corporations are inherently evil. They are akin to criminals.
Every single time the author has never run a business that is equivalent at the scale of the business being criticized.
And they attribute to malice that can be explained with systematic incentives or complex interactions between various complex components in a dynamic world.
Its not the same as committing a crime.
He's been doing his own thing on Pluralistic ever since.
Is it really fair to compare "PotatoTrac" with Uber and AirBnB?
If they both break laws but seemingly get away with it, so they have that in common, why not compare them? What makes PotatoTrac or any of the other incomparable?
In any modern Democracy, it would be illegal to kick families out of their home and then rent the home out to wealthy westerners, yet that is literally what AirBNB allows, see Amnesty International take:
https://www.amnesty.org/en/latest/press-release/2020/12/airb...
Which one is this? (Taxi = Uber, Hotel room = Airbnb, Unregistered security = various crypto?)
Airbnb leaves more people homeless while enabling the rich more convenience.
Uber (as in ”übermensch”) makes the most desperate people compete for pittances, use their income at the gas station and the auto parts store while enabling the rich more convenience.
Doordash does the same.
Robinhood et al take from the poor and give to the rich.
Potatotrac at least screws everyone over somewhat equally. Where are the riots over this?
Find the underground railroads. Build communities of care. We need to get better at caring for each other & collaboration. The other side has apps for that. Where are the developers making apps for the revolution?
Cooperation is easier than ever now, and happens transnationally and locally.
Sellers generally have more sunk investments than buyers, and hence more market power.
Regulators gain more by cooperating as well, and industries embrace regulation that reduces competition especially new entrants.
It’s easy to explain but hard to address.
The “behave themselves” comment was certainly juicy, but the entire multi thousand word article is about how these companies are in an intense competition in a low margin industry. Here’s an example:
> Former VP of International at Lamb Weston Well, McCain came in at a better incentives than Lamb Weston, and Lamb Weston maybe felt complacent and said, no, we're going to keep this account, and they lost it. That was a blow to their ego. They lost the Wendy's business. They lost the majority of their Wendy's sales to Cavendish Farms, which was 200 million pounds plus. So they've lost some major accounts. Tegus Client Because they refused to concede on the price mostly? Former VP of International at Lamb Weston That's correct. They could have kept the business if they conceded on the price. But there's a cost to conceding on the price as well. I mean there's a cost, but there's also cost to not to concede. I'm not sure when they're going to get the Aramark's business back or if they ever get it back. They've got to pay us to get Aramark's business again. They're going to have to do exactly what McCain did, try to maintain it. Tegus Client Right now, this sounds more like a good competitive market. So how does this tie back to just Lamb being silent on the price increase and McCain like leading again? Former VP of International at Lamb Weston Well, they felt that they're not going to give McCain Foods the price increase. The price increase never happened. Even though it did get announced, it never did happen. So this is one of those battles that may be short-lived, but it could be long-lived. It could be a couple of years because McCain, a privately held company, they're not subject to the stock market or the analysts asking them difficult questions, even though most of them don't ask difficult questions to Lamb Weston. So they're independent. They can do what they want to do. The 2 major shareholders are the second generation, Scott and Mark McCain. Their EBITDA exceeds $1 billion a year, not bad for 2 young men that inherited the business. So they're not really in any hurry to concede to Lamb Weston or to say, okay, I'm just going to forget this. It could be tit for tat down the road, could be. Or they may just say, let's not go there, let's just try to raise the price. If Lamb tries to raise their price in September, you asked the reason why would they raise prices if they had a cost reduction on potatoes, they're going to raise prices because inefficiencies in the plant, COVID costs, they're going to mention that. They're going to talk about ingredients, oil consumption, cardboard up and all. So their COGS have increased even though potato prices would have been reduced.
https://app.tegus.co/guest/document/view/67Hf3DiMGQ944SkfpRh...
You think it's left vs right but actually the entire system has been co-opted by this neo-oligarchy.
The thing is that he doesn't present any alternative. I know he's some variant of a communist, so does he suggest government control for everything? As if that solved anything? I guess what you find on empty market shelves is cheaper.
Truly a question - what's your solution? What's a solution? People have been arguing that everything is getting worse since forever. I've yet to see people organize and stop buying Pepsi or Coke. Should the government do it for them? Do you propose AI will solve the Socialist Calculation Problem? You're probably against AI as well...
Although specifically here, I think we need new regulations broadly banning the type of data broker price fixing that is discussed in this article.
The real question is, why doesn’t this happen? And answering that gets you to the real, difficult problem: the government doesn’t want to do these things because the government chiefly operates to serve the rich and powerful. Solving that is quite difficult indeed.
Feeling disappointed.
The inflation after covid was caused ONLY for printing money with the covid excuse.
All Those "cartels" existed long before covid, and why they didn't raise the prices before?
If you rise the price, you open a space to other companies to sell at lower prices.
But if you print money and not grow the production of good and services, the money will worth less, making everything more pricey.
This severe lack of economic insight undermines the rest of the article's credibility for me. and at 500k upvotes, I'm really starting to question even bothering with this community anymore. Bot votes?
https://flaminghydra.com/sam-altman-and-aaron-swartz-saw-the...
But markets experience market failures: this might be in the form of monopoly or monopsony pricing power, it might be in the form of lobbyism or other institutionalized corruption, it might be in the form of outright lawbreaking or other even more direct coercion.
Capitalism-like systems only serve the populations that live in them when they are honestly and competently referred: they only work when market failures are addressed with vigor.
We’ve sailed so far past this type of state that the government is now actively aiding and abetting cartels and oligarchs in their efforts to induce market failures.
That ends with some kind of internal or external war, hence the bunkers and islands and spaceships and shit.
Price fixing, consolidation, and greedflation in food sources though does not seem to get much press. I think the revelation would be extremely surprising, scary, and absolutely infuriating to most people.
What is really striking here is how the tired old “vote with your wallet!” advice won’t even work for potatoes anymore. And yet the staunch defenders of business-as-usual capitalism still insist nothing has changed, that we only need to “use our agency!” to effectively fight against whatever kinds of abusive corporate bullshit is getting normalized this week. That’s not just a tired rhetorical trick to win points in an argument or to blame the victim, it’s becoming very transparently absurd.
Contrast that to how individuals get the hammer put down on them by the justice system if they so much as fart in the wrong room. The lesson from the last 50 years should be: If you want to commit a crime and get away with it, do it as a corporation.
Minus the crime part to be clear. I actually try to hold myself to a high ethical standard.
Like the founding fathers ran their business as themselves. There isn't some Monticello LLC that Thomas Jefferson was CEO of so if TJ did something bad then he's personally liable for it. This is what's changed and is the problem, people get LLCs in situations they really don't deserve them in.
It’s an emergent property and it sucks, but there’s no conspiracy.
AFAIK the follow-on concern of manipulation of the modern legal environment as a tool for unencumbered multinational greed really began with entities like the East India Company being empowered by pontificating rulers back home granting because-I-said-so immunity for arbitrary actions outside their borders, thus establishing the ground work for industrial scale opium trading, piracy, slavery, and banana republics. We're in a period of relative reckoning now where the cash-piles thus accrued are facing some popular scrutiny, but there'll never be recompense. As we've reached the ends of the earth and new wealth to seize has become scarce, we've turned to speculation and beyond earth to mars, the metaverse, and media in general. Stock markets are largely society's greed temples and in some cases designed for money laundering (eg. Singapore stock market for the Burmese junta). Even small companies on the public markets are worth orders of magnitude more than you can earn in a lifetime, leading to an intellectual drain toward speculative systemic value extraction instead of productive ventures.
IMHO a naive hope of crypto was a reckoning, instead we received the opposite: increased speculation, libertarian multinational economics and now abject political profiteering. No action on critical issues like climate. Less international trust and diplomatic potential than we've had since WWII - truly, we are lost. But it's less a conspiracy than a back-scratching piggy trough of reverent greed-inertia, in which all pigs are created equal but a cabal of investment bankers are more equal than others. Meanwhile everyone else slave for their locally dangled currency carrot, backed primarily by golden handcuffs of mortgages, an inertia of ignorance, a charade of democratic process, increasing global population dependence on multinational trade to meet quality of life expectations, and conveniently captured choke points like identity (The End of the Nation State: The Rise of Regional Economies), food (Stuffed and Starved: The Hidden Battle for the World Food System), regulation (Preventing Regulatory Capture: Special Interest Influence and How to Limit It), international logistics (The Outlaw Ocean, International Shipping Cartels), energy (Energy Revolutions: Profiteering versus Democracy), education (Privatizing the Public University), media (Selective Control: The Political Economy of Censorship) and weaponized finance (Confessions of an Economic Hit Man, Mortgaged Democracy).
It is perhaps not overly hyperbolic to state that the challenge of our era is to determine a mode of capturing the power of emergent technology to undo this situation, and nothing less than the fate of the planet rests on doing so.
Eugenics that select for altruism, empathy and cooporation and against greed and egotism. It's absurd to keep this subject taboo as we're staring down the apocalypse. Rather everyone goes down with the ship than consider something drastic that might go against what I was taught as a kid
I am complicit in a rigged system with no escape.
If the population pyramid inverts and there are too few young people, the whole concept of "retirement" becomes unsustainable, unless AI advances enough to make up the lost productivity.
Pensions are just a way of formalizing the obligation to old people, but they are not themselves the root source of the problem.
Retirement should not mean a life of air travel and cruises, achieved by pension savings.
Retirement should not mean continuing to live in your 2,500 sq. ft. ranch house in the suburbs with only car access.
John Maynard Keynes famously predicted we would be working 15 hours a week due because of increasing productivity. Where did all that productivity go?
If it's because we believed we needed ('deserved') more, then change those beliefs. If it's because of the concentration of wealth into the 0.01% then AI productivity improvements won't fix things.
The AI-mongers sell the false and unsustainable promise that AI will magically solve things so people don't need to change their habits.
Yet we can achieve a lot of savings by building more compact areas to live which don't require a car, and by building mass transit with the needs of the elderly in mind (no steps, low-frequency lines which run through neighborhoods, for those with limited mobility, etc.)
We can save money and get better health outcomes with a tried-and-true single-payer health care system done in every other developed country (eg, "Medicare For All".)
That can all be done now.
Yet we aren't. Because it's easier, and more profitable to those with money, to ignore the festering problem, with the fig leaf of 'AI' or some other future technology, and let someone else deal with it,
The US system has worse overall health outcomes, so it's like we aren't really trying.
Like, with the US privatized medical system and its parasitical medical insurance system, we can see how medical costs are higher and overall health outcomes lower than in countries with single-payer/national health care.
And if I happen to choose a health insurer which decides my cancer treatment is inappropriate, I'm either bankrupt or dead.
Yes, I'm still dependent on healthcare, but one is better aligned to my health.
Similarly, the personal pension system requires staff and/or custom software to handle customer relations, and the individual funds have marketing budget to convince people to join. This disappears with a nationalized system where it can all be part of the same social security system, and benefit from the economy of scale.
Furthermore, companies justify all sorts of unethical practices because they point to all the (abstract) pensioners who will lose their retirement, which relies on those pensioners not being able to say 'no, don't do it in my name.'
While something like the Government Pension Fund of Norway can select funds and influence the corporate governance in a way which is aligned with national goals.
Yes, there are all sort of ethical funds I could invest in. The paradox of choice and my complete lack of expertise means I must hire that expertise, like when I got advice when I set up my account.
Furthermore, if I happen to select green energy stocks, but they go down the toilet after the invention of Mr. Fusion, I'm currently screwed. While a public pension has the mandate of supporting everyone.
Yes, I'm still dependent on stock investemtns, but one is better aligned to my retirement.
Lastly, the government can raise money from taxes. The government can pay for more nurses and doctors, and training hospitals. The government can pay for high-quality retirement housing. The government can do a lot of things that a private pension plan cannot do.
[1] https://aswathdamodaran.blogspot.com/2023/03/data-update-7-f...
[2] https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg...
All that differs between them is the tax treatment each gets come tax time.
And that if you hold a stock for say 10 years and somehow sell during a recession you could make ~0$ on that stock if it only did buybacks. While with a dividend you'd have come out ahead.
Conceptually they have very different incentives as well. With buybacks you want a company to have high volatility as well as to make short term decisions so that you can buy a dip, ask for say lay-offs, and sell as it goes up. With dividends you want the company to make longer term strategic decisions so that their revenue goes up and you get a larger dividend.
A stock with buybacks should be compared to a stock with dividend reinvestment.
If you do something other than reinvest dividends, you should sell some shares every year.
You're reading this on a device made in an underpaid Asian sweatshop, wearing clothes that are the same. Old people with pension funds are no more or less complicit in the brutality of the system than you are. Try blaming the people who are causing this situation on purpose, not the millions who are just trying to navigate it as best they can.
Tell that to Bill Hwang or Sam Bankman-Fried.
I also think it’s clear that SBF was jailed for his effects on the rich rather than on average people. Worse than fleecing billionaires, he made them look bad. Clearly he’s a scumbag who deserves prison time, but people worse than him are free.
>I also think it’s clear that SBF was jailed for his effects on the rich rather than on average people. Worse than fleecing billionaires, he made them look bad.
"The rich" was upset enough at SBF losing $32 billion to throw the book at him, but are totally fine with the GFC causing $2 trillion in damage to the global economy?
Had they been scamming small investors, even for the same total dollar value, they might have actually gotten way with it.
Not only did they lose other rich peoples money, they lost money for people that were richer than them. Important distinction ..
On the other hand, large companies are basically private armies in which the presumably passive shareholders are so distant from the actions taken on their benefit that people almost never go to jail unless they are deliberately thrown to the wolves by shareholders or superiors.
Monetary risk is not a real enough risk.
I don’t think these solutions are well thought through.
It's large players with board positions who reap the benefits and turn a blind eye to blatant corruption.
If you own even a fraction of a share of a business (say IBM), you are, by definition, a "shareholder" in that business. It does not matter if it is via the RobinHood app., or a JP Morgan Chase Premier Brokerage Account.
Though I agree that monetary punishments to the company are much more effective than jail for some random shareholders. They just need to be large enough.
If you have neither control nor information that is sufficient for betting that the investment won't harm people, don't invest.
What should happen is to send the share price to zero or give to the government.
This was e.g. done with 2008 financial crisis for Fannie Mae and it had been paying dividends to the US citizens since then.
However there exists discussion whether this was a good thing in the end.
Obviously that's not the same as havingva million of currently empty capacity, but still.
> 5 years of jail time distributed across the top 20 shareholders proportional to their stake
Ideally a judge wouldn't hand out such a sentence if it involved punishing people who didn't have a controlling stake, but I don't think we should rule such things out. I can be held criminally liable for negligence when my dog does something that I wasn't even around for or aware of, there's no reason that shareholders couldn't also. If you don't have enough control to prevent your property from committing crimes, you should probably change that.
I don't know enough about where corporate structure norms stop and where the law starts to know if "the board" is something that is always going to be available for prosecution, which is why in general I mean the shareholders.
It's not taboo, it's stupid and unworkable. You're proposing sending half of America to jail if any Fortune 500 commits a crime. That's a get-out-of-jail-free card, not meaningful deterrence.
Massive. Fines. Everyone keeps trying to be creative about penalising corporations without levying massive fines. Just levy the fines. You don't need to lay anyone off, you're just wiping the shareholders (and management) of their wealth and transferring ownership to creditors.
The "corporate death penalty" was the greatest invention of the corporate lobbyist. It successfully derails conversations about massive fines, which are workable and scary, into ones about charter revocations and whatnot, which is not.
> You're proposing sending half of America to jail if any Fortune 500 commits a crime. That's a get-out-of-jail-free card, not meaningful deterrence.
This is a poor argument.
If the law would be as such and be upheld, everyone would start making damm sure the companies they invest in are trying their hardest to adhere to the law. It would also work as a strong counterbalance to megacorps. Both which would be incredibly positive developments.
It's similar to rules in football. "Well if you start carding players for getting angry at the ref then half the team will get a yellow card every game!". Yes, the very first game this might happen. The second and third it sure won't.
So everyone in the US is going to do due diligence on all 500 companies in the S&P 500?
Also you act as if the majority of Americans care about the law or ethics? You do remember the election we just had don’t you? The support that the majority has for 1500 criminals who just got pardoned?
You're proposing bankrupting millions of Americans' retirements because Uber didn't follow local taxi rules?
> if $100 billion fines were on the table for companies like uber, that diligence would be priced into the stock and it would be far more effective
Yes. Again, we're re-inventing massive fines.
It wouldn't be upheld. It couldn't be upheld. The first time somebody were stupid enough to try to uphold it, it would prompt a popular firestorm that would undo its effects. (I'm not even approaching the numerical impposibility of attempting to enforce something like that.)
> One's investment into a criminal enterprise could arguably be contributing to or encouraging that crime
Every shareholder is an “investor”. Well not really, when you buy a stock unless you buy at IPO or secondary offering, you are buying an ownership share from another holder.
So if you really want to go after “investors” you would have to find all of the investors who invested before the company went public and the ones who bought at IPO.
We also have to go after any bank who lent the company money since they were also “involved in the criminal enterprise”.
In the case of Amazon, you would definitely have to go after Bezo’s ex-wife since she is a major shareholder.
Please unlearn that.
You say that shouldn't be taboo, it should be debatable. Alright, I'm listening, tell me how that wouldbsolve more problems than it would create.
But supposing that you did propagate it to every shareholder... I think that creating an incentive to divest in companies that are likely to commit crimes, and to avoid financial instruments where you can't be sure just what it is your money is up to, would create a much healthier investment environment. There would be more homework done before deciding which companies ought to get the boost. As it is, there are no market forces working to prevent cases where investors are enabling activity that are harmful to the rest of us.
Those mutual and index funds where the investor is disconnected from whatever harms their money is doing are a hazard to us all. Investing should mean understanding what you're investing in. The whole system needs more types of risk, it's currently like a car with no steering wheel.
You didn't, but the person I replied to did.
Two comments up was:
> So should every one who owns stock in a company - including mutual funds go to jail?
And the person I replied to says maybe so, let's consider it.
56% of US civilian workers have a IRA/401k or other work retirement plan. I say no, let's not consider jailing a majority of the country's working population.
we as a society are better off when people take risks
If the corresponding reward is that I pull off a successful crime, then we as a society are worse off for having funded the risk.
Shielding marginal or non-voting investors from disproportionate responsibility for things essentially out of their control transfers risk from them, and makes it easier to move money to useful places. That's great!
Shielding key decision-makers and large-stake owners from responsibility for actions performed at their behest is not so much. And in fact, the pure "design" of limited liability has means for "piercing the veil" and keeping these individuals responsible and for wholly disolving corporate charters.
It just turns out that once commercial enterprise grows big enough, or is steered by influential enough leadership, capturing regulation and enforcement to serve their own interests, they can undermine those safeguards and assert a kind of wholesale corporate immortality and immunity that completely undermines the "design" -- a bug in the implementation of that design, if you would.
Either that, or your post is hyperbolic.
Have your cake and eat it too
That's because most crimes "individuals" do are straightforwardly illegal and easy to prosecute, whereas the "crime if a corporation does it" are not. It's not any different than say, simple property crimes (eg. stealing or vandalism) vs white collar crimes, both of which can be perpetrated by individuals but the latter are far harder to prosecute. Stealing a candy bar is an open and shut case, especially with surveillance footage. A long firm fraud[1] is far harder to prosecute. If you buy a truckload of candy bars on credit, fail to repay the vendor, and declare bankruptcy, prosecutors are going to have a hard time prosecuting the case. Having bad business acumen isn't a crime, so on the surface nothing illegal has happened. To prove wrongdoing they must prove that you intentionally acquired goods on credit without intending to pay it back, which is far harder.
Maybe that’s something that should be adjusted by a legislative body.
Crimes are only “easy” or “difficult” to prosecute because of the laws as they’re written.
That doest mean that there isn't plenty of room for more centralized civil protections against negligence and recklessness.
You still have the problem of punishing diffuse guilt. The correct answer is fines. Massive fines, potentially to the point of bankruptcy. We don't like to do that, however, because corporations have many stakeholders who may not deserve punishment, e.g. employees.
There's countless ways around the issue of "average" employees being punished. E.g. hard caps on top employee compensation for X years. Bans on dividends.
Forced stock dilution, now that's a solid one. Create extra shares equivalent to 20% of market cap, given to the government who sells them on the open market.
I'm sure there's holes in these but plenty of smarter people than me who can easily make them watertight.
How do either of these help an employee of a company that was just poofed?
> there's holes in these but plenty of smarter people than me who can easily make them watertight
No. There aren't. Both the caps you proposed--capping dividends and salary--have known workarounds. Stock buybacks exist because they're more tax efficient than dividends. Health insurance is tied to employment because in WWII the U.S. government capped wages.
There is really one solution to corporate malfeasance: criminaly prosecuting where you have evidence of individual criminality and massive fines in every other case. We bankrupted our automakers without hurting their jobs. That's actually less intrusive than trying to fuck with their capital structure by e.g. banning dividends, which just incentivises leverage.
Corporations are hierarchical.
> however, because corporations have many stakeholders who may not deserve punishment, e.g. employees.
Hiding behind the employees. The ones with the least stake in the company. That’s a classic.
They might have their two weeks notice. What else? “There might be no other jobs around?”
Class collaboration is a lie.
"Let them eat cake" isn't a winning pitch when it's your job on the line.
No, I'm pointing out the real limitations on the types of punishments that folks--typically on the left, with good intentions but breathlessly naively--like to propose. Ignoring the board doesn't make you a smarter player.
I'm then pointing out the option that works within those limitations to exact tremendous justice. The option that when it comes up, anyone in its crosshairs will immediately start pointing to hare-brained schemes like a "corporate death penalty" to get out of. Massive. Fines.
(For those who prefer jail time to fines, do you really thing Bytedance's CZ would trade his 6 months in jail for the tens of billions he's personally walked away with?)
You're again reinventing corporate fines in a way that makes them problematic. You've not only dissolved limited liability, which makes investing in equities a rich man's game, you're proposing going after tens if not hundres of millions of Americans if a single Fortune 500 breaks a law. That's mechanically impossible.
> Next time it is sold the sale price goes toward the fine. And so does any dividend paid.
Poor people pay the fine. Rich borrow against their shares.
None of these problems exist with massive fines. None of them add anything, procedurraly or punitively, over massive fines. The idea that shareholders are going to do legal scrutiny when many professional investors barely read public filings is laughable. Re-inventing fines is rolling your own legal system when we have centuries of good law to rely on deriving from corporations suing each other.
Those employees disagree with you and they vote. Every district has large employers whose employees would, as a voting bloc, flip a primary or even general election.
Americans do. But every time it comes up, the discussion gets derailed with these ancilliary ideas. Just look at this thread. Fines are old and boring.
> the large fines aren't assessed because those in the position to be fined also as a rule have more influence over the system
There is also the practical matter of the power to levy large fines being, itself, immensely powerful. You don't want to create a fine czar only to lose control of them in a term or two.
[1] https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scan...
The incentives align to encourage executives to commit crimes in service of short-term gains — even in the extreme case of Wells Fargo, Carrie Tolstedt and John Stumpf have both avoided prison time and ended up money ahead to the tune of tens of millions of dollars, even after clawbacks and fines.
Not only shouldn't intent matter, we should assume the worst. Whether assuming the worst is a workable enforcement regime, I don't know — but it most accurately models a reality where the most rational behavior for executives is indifference to the law.
Corporations are giant responsibility diffusion machines and more often than not they stumble into illegal activity rather than internally commit to it. Hence, they are not acting intentionally. Also relevant is my assertion that this bumbling illegal behavior also needs better enforcement - it's just civil in nature and not criminal.
The problem is to prove that something is done intentional, on a "corporate level", whatever that means in the given case. Imagine having a law where breaking it would mean that the business have to shutdown. A competitor could pay off someone inside the company to break the law deliberately to have the legal system remove competition.
Yknow maybe the modern day requires rethinking of some regulations regarding corporations.
Yes and no. Yes in the sense that you can make crimes very easy to prosecute, no in the sense that doing so usually makes unobjectionable or even good behavior illegal in the process. Take insider trading for example. It would be very easy to simply make selling the stock of a company you work for, or are in any other way party to, outright illegal. But this would be bad for a lot of reasons; it would make it harder for businesses to compensate employees, it would encourage employees of successful companies to leave early taking important business knowledge with them, etc. Some behavior is simply harder to make illegal because it's harder to identify by its nature, which subsequently makes it harder to enforce laws against it.
I’m no legal expert, ofc, but I’d bet that a good enough legislature could strike a balance that society can be okay with.
Whatever we have now isn’t that.
Clearly crimes were committed, and clearly layers and layers of management were in on the joke, but only the few little fish at the bottom who were dumb enough to ever put things into writing with a paper trail went to jail.
A lot of the alleged rogue traders were far less rogue than their employers would like you to believe, similar with the LIBOR fixing scandal, etc.
J6 is very similar because there will never be a paper trail of the Orange man sending written orders to storm the Capitol. Everything is a wink and a nod.
The guy at the top never actually says the thing, the next rung down maybe says it but only 1-1 in-person in a secure environment, a few levels down maybe a phone call & hopes not to be tapped, a few more layers down you start to get to the idiots who send a text/email.
Akin to the Mafia.
Georgia literally has a recording of a criminal threatening to retaliate against a public official if they don't rig the election.
It is a bit unexpected I suppose for a normally friendly party to be recording your phone call. He did work in a less regulated environment than banking so recorded phone call probably caught him by surprise. No one was that dumb at banks (most calls are recorded and there’s often even a beep to remind you the line is recorded).
Yes, but why are individual crimes easy to prosecute and corporate crimes not. These are not things that just popped into being like a thunderstorm. They are a part of an economic and social system that makes things in such way.
I.e., shoplifter steals candy bar, surveillance camera has clear view of the shoplifters face, and of the theft, and security camera in parking lot gets license plate of car they drive away in. Easy conviction for prosecutor, as there little question of who committed nor of what crime was committed.
Contrast that with the GP's example "business type" crime. To prove the "business" committed a crime, they have to find a way to prove the business, when buying the truckload of candy bars, at the time of the purchase, intentionally never intended to pay back the loan taken out to buy the truckload. Proving intent (i.e., effectively "mind-reading") is way more difficult than proving a crime happened in the "shoplifter" example above. There's no security camera footage recording the "intent" of the business when it purchased the truckload of candy bars.
> They are a part of an economic and social system that makes things in such way.
It’s difficult to prove intent but we make that necessary to prove when it doesn’t have to be. It could be that negligence is enough for it to be a crime.
The difficulty with corporations is that demonstrating anything about their behavior at all (negligence, intent, ignorance, malice, stupidity...) requires doing so for a corporate body, in the sense of that word that refers to a thing visibly composed of many other distinct things.
What does a corporation want? What does that question even mean? Was a corporation negligent? Does that refer to its officers? Its employees? Specific employees? A written plan?
It's not that hard to come up with a definition of what you mean by a corporation for the purposes of defining a specific type of behavior. For example, you may regard negligence as being a property of the board, exhibited by the decisions the board makes. However, any given definition likely misses cases where a reasonable person would still tend to feel that "the corporation was negligent".
This doesn't come from the for-profit aspects of a corporation, or its existence as part of a capitalist economy. It comes from the aggregate nature of a corporation, and talking about any sort of intent-ful behavior in the context of an aggregate is challenging.
If you're trying to imply such crimes are hard to prosecute because The Powers That Be™ deliberately made it that, how does that explain the difficulty in prosecuting long firm fraud (and other white collar crimes)? You can argue that price fixing being hard to prosecute helps "corporate America" or whatever, but basically everyone is united against long firm fraud. Yet, it's hard to prosecute. Why is that?
Because that's seemingly what you were asking about? If not clarify what you originally meant rather than beating around the bush then being surprised when people aren't focusing on the things you want.
>>>Like what? Moreover, what does this hold for public policy? Should we bring back debtor's prisons? That would be the obvious solution to long firm fraud.
>>I’m not an expert, but the way you wrote your comment seemed to be discounting this possibility for no discernible reason
>Debtor's prisons were widely considered to be cruel, which is why they were abolished basically everywhere in the developed world.
* policy is majorly influenced, to the point of near dictatorship, by shareholder profits
* thus, crimes perpetuated in the name of these profits are vague, hard to define, hard to prosecute
* some white collar crime, that shareholders despise, remains difficult to prosecute despite being aligned with the interests of this dominating power
The idea is similar to Tragedy of the Commons issues. The collective community, or aggregate view is "fraud bad", yet the individual, provided opportunity and anonymity, acts in the their own self interest, especially where punishment is viewed as difficult or low plausibility.
Similar issues occur with the general concept of honesty, and views of social honesty. Surveyed, personal belief is that most respondents would state that other humans should reply honestly, with accurate information. However, many, in personal action and isolated opportunities are quite willing to embellish, neglect to correct a mistake, or outright lie.
Neglecting to correct a mistake is one of the most difficult, and shows up quite frequently in markets. With the markets often congratulating recipients for taking advantage of fools who priced something "wrong." Lots of various rationalizations that then get used. "Its their own fault", "they won't notice the difference", "I'm just more clever", "we deserve it because of our status", ect... Usually, seems more frequent the further away, the less personal, and the more abstract the lie or theft. Much like the article title. Office Space did this joke a long time ago.
Peter: Ah no, you don't understand. It's very complicated. It's, uh, it's aggregate, so I'm talking about fractions of a penny here. And over time they add up to a lot.
Joanna: Oh okay. So you're gonna be making a lot of money, right?
Peter: Yeah.
Joanna: Right. It's not yours?
Peter: Well it becomes ours.
Joanna: How is that not stealing?
Would we be able to have a world in which there are almost no bugs? Yes, definitely. Would that be a better world?... I tend to say no. Because we trade more bugs for faster development. Because not all bugs are critical. Because some requirements are not completely consistent. And other reasons.
I imagine it's the same with the law. That is not to say there are no improvements to be made, but unless multiple people with lots of experience in the field come and say "this would be better with no side effects" I would be cautious.
Okay, what should we do to tackle long firm fraud?
Who are all the people lobbying to keep long firm fraud hard to prosecute?
>and fully treat businesses like a person (jail, death).
Getting stuff on credit and then defaulting on the debt isn't illegal for natural persons either.
That's part of the point and problem because it is by design. Rich people and corporations like treating their problems as so complex as to be completely intractable. "How do you tax me when I don't have income?!" "How can I be responsible for a system of decisions?!" Etc. Rich people and corporations want nothing but upsides, and they have designed the system to work this way.
A great example of this is Steve Cohen, who got away with insider trading for years. https://www.youtube.com/watch?v=1szayJV505M. You're telling me that a small business owner whose direct reports repeatedly commit and are convicted of fraud would just be able to walk away? Yea, right. In Cohen's case, he just walked away and bought a sports team.
The thing is though - in America people are corporations except of course no one will teach you that. Open an single-person LLC and boom - you are now corporation. Have a rental, move it under LLC, own a car, LLC… now you are corporation (with limited to no liability) :)
https://en.wikipedia.org/wiki/Piercing_the_corporate_veil
Moreover most of the difficulty in prosecuting corporate crimes comes from the fact that responsibility is spread across multiple people, that it's hard to prove anyone did anything wrong. Obviously that won't work with a single person corporation.
-Edward, Lord Thurlow.
> There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to the public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.
-- Robert Heinlein, Life-Line
And by the way, this is preaching to the choir. Nothing will change if we keep echoing the same things to ourselves.
Ubers behavior during its growth phase, and even now is a good example of this. The latest letter of the law vs spirit of the law thing Uber did was circumvent the NYC law to try and ensure Uber drivers get a fair minimum wage.
To avoid having to pay any difference to make up the hourly wage to drivers, Uber runs an algorithm which kicks drivers out of the app randomly if demand gets too low, without warning or indication of when they can get back in. It can be minutes or hours. So the drivers remain on the road, driving/idling, waiting to get back into the app. The "work" is still getting done, but it doesn't count against Uber.
Imagine a small restaurant doing similar, deciding at random slow times instead of sending staff home for the day, they assign them no tables and mark them as off-the-clock. When demand picks up again, they get assigned some tables and resume making money.
The whole independent contractor on-demand app market is an automated exploitation engine.
I get legislators want uber drivers to earn a living wage, but expecting uber to continue allowing unlimited amount of drivers to be "online", when they have to pay for them is absurd.
>Imagine a small restaurant doing similar, deciding at random slow times instead of sending staff home for the day, they assign them no tables and mark them as off-the-clock. When demand picks up again, they get assigned some tables and resume making money.
You're trying to imply small businesses don't do this but this happens all the time. It's not even limited to minimum wage laws. After the ACA was passed, everyone started avoiding hiring people for more than 32 hours if they could, to skirt the "you have to provide healthcare to all full time employees" requirement.
Restaurants/retail will reduce staffing due to demand, but they don't leave people hanging by an on-call thread the way this automated Uber model did. Tends to be more like cutting shifts off early or calling people not to come in. It is not this automated app-driven robo labor optimization. People aren't being told to go outside and maybe they'll get called back in 5 minutes, 1 hour, or 1 day.
Agreed a lot of businesses moved people to 32 hour weeks to avoid ACA, which is a different issue.. how's all the on-demand faux contractor workforces healthcare though?
Most of those drivers were presumably enrolled before that legislation was passed/came into force. Blaming uber for having those drivers seems like a stretch.
> They could have also kicked people out for full days, rest of shift, or given an indicator of when they may try again. Something that leaves it more clear they are off and don't linger around to try and get back in.
Is this a real concern? This seems like something that sucks for the first few days and then everyone realizes what's the new normal and adapts accordingly. I don't doubt uber could have done better here, but characterizing poor UI as "circumvent the NYC law to try and ensure Uber drivers get a fair minimum wage" is a stretch. It's also unclear how uber benefits from drivers being frustrated at the UI.
>Restaurants/retail will reduce staffing due to demand, but they don't leave people hanging by an on-call thread the way this automated Uber model did.
Uber driver are not "on call". They can sign off at any time. Sure, they might need the money, but in that respect I don't see how that's any different than 0 hour contracts that some restaurants have.
>Agreed a lot of businesses moved people to 32 hour weeks to avoid ACA, which is a different issue.. how's all the on-demand faux contractor workforces healthcare though?
The point isn't that being an uber driver is a dream job, it's that contrary to your rhetoric of "Imagine a small restaurant doing similar", small restaurants indeed will do something similar, if given the chance.
Honestly, that's _exactly_ what it looks like to me. Law makes it so that they have to pay drivers that are available to drive but aren't actively involved in a fair... so they change the system so that, if they don't have fairs for you you're not considered available to drive. Everything about that reeks of trying to circumvent the law.
Now, I don't know that there _is_ a better solution that works with their business model; but the answer to that isn't "cheat", it's "your business model it's sustainable".
How is this any different than minimum wage laws which are ostensibly enacted to increase worker's salaries, but businesses respond by hiring people for fewer hours? I agree that uber is thwarting legislators' attempt to improve the earnings of uber drivers, but this was the outcome everyone has foresaw, including the legislators. Characterizing it as some cunning chicanery on uber's part is absurd.
Nobody is hiring more people to counter the laws "to increase worker's salaries", they're hiring fewer workers to counter the laws that require certain benefits (health insurance) for full time workers. That's a totally different issue.
You effectively have two options. Option one, Uber signs up as many drivers as they have customers during off-peak hours and then if you want to drive only during peak hours to take advantage of surge pricing you can't and if you want a ride then there won't be enough drivers, because they won't sign up any more if they'd have to pay someone for 8 hours to have them only drive for one. Option two, there are that many full-time drivers and then they sign up some additional part-time drivers to satisfy peak demand, but the part-time drivers are part-time and they're not getting paid during off-peak hours.
Which one do you want? Notice that there is no one better off under the first option; the people who don't want to work part-time still have the option not to under the second option, the first just prevents them from doing it even if they want to.
Alternatively option two with an explicit, upfront decisions who is actually part-time, so there are no surprises and the rules are known.
That only works when the difference in demand between peak and off-peak is small relative to the cost of idle workers. In this case it isn't.
> Alternatively option two with an explicit, upfront decisions who is actually part-time, so there are no surprises and the rules are known.
Then you'll be objecting that the majority of people are classified as part-time because there will be a lot of people who get 40 hours some weeks and zero other weeks due to changes in seasonal demand etc.
Also, the result of that would be that in the slower weeks, one person gets 40 hours and one person gets 10 instead of each person getting 25 hours, and that's obviously not to the advantage of the person whose hours you're cutting. Which in turn implies that the person getting 40 will be signing up for some fresh hell like "you get 40 hours but we choose when they are" and then they're both getting screwed by the change.
If these are the upfront conditions, why is that an issue?
But the main issue you're getting closer and closer to is: uber's model doesn't seem to be profitable if they have to pay and employ with reasonable conditions. They don't have to be profitable though. We really can let them fail. The reasonable cities can then provide standard overprovisioned public transport.
Because they might have both preferred 25 hours with flexibility to a forced choice between 40 inflexible hours or 10 flexible ones.
> uber's model doesn't seem to be profitable if they have to pay and employ with reasonable conditions.
Uber is an app. Their primary cost is paying drivers. They're not going to fail because you imposed this inflexibility on them. What's going to happen is they're going to have fewer drivers and provide less service. But "have fewer drivers" is those people losing their jobs, which isn't really helping them out.
That's not an option though. The option uber gives is "maybe 25, maybe not, you'll find out on the day".
That's still "how do we keep uber in business". There are alternatives like good quality overprovisioned public transport which can take most of those customers. It can also deal with peak situations like events.
It's a sunk cost fallacy to think of uber as some kind of last resort employer that can ignore the rules.
It's 25 when it's 25. Which you can still have a preference for when the alternative is 10, or the alternative is "40 hours but your hours are 9PM to 1AM and then 5AM to 9AM".
> That's still "how do we keep uber in business".
Uber is still in business when they require you to work split shifts in the wee hours. We're trying to save drivers and riders from the consequences of foolish rules.
> There are alternatives like good quality overprovisioned public transport which can take most of those customers.
Overprovisioned public transport is just Uber with lower efficiency. You have a municipal bus with zero or one passengers instead of a smaller private car with one passenger or avoid the trip because you know before you start that no one is going there.
> It can also deal with peak situations like events.
Ten thousand people exit the stadium at the same time and each want to go to a different destination, thousands of which are single family homes in the suburbs.
> It's a sunk cost fallacy to think of uber as some kind of last resort employer that can ignore the rules.
The assumption is that Uber is bad, but Uber is better than taxi medallion cartels or private cars that then have to be parked in the city instead of picking up a different fare going in the opposite direction.
Uber is _different_ than the taxi system. Not all taxi systems are "taxi medallion cartels", even in cities with taxi medallions. And, when it started, Uber was worse than the taxis in a lot of cities in many ways. It's gotten better since then, but pretty much exclusively to try to prevent the cities from throwing them out on their asses.
Laws that regulate how people can be treated by employers have always been a balance between _some_ people having it worse (ex, their jobs not being available) so that the _vast_ majority of people have it better.
The same things is true of things like safety regulations. It costs more to be safe, and you have to charge more or hire less if you're going to have them. But overall, society is better for them (even though some people no longer have jobs).
Not all of them. For example, a law that requires companies that agree to pay workers for services rendered to actually pay them has no obvious mechanism to destroy jobs and may even create jobs as people become willing to do work when they otherwise wouldn't have trusted the employer to pay them with no enforcement mechanism.
The types of rules you're talking about are typically lobbied for by specific groups to gain advantage for themselves at the expense not of the employer but of their competition for employment, i.e. other workers. For example, the passage of minimum wage laws came about during the Jim Crow era because what white workers wanted from discrimination was to prevent black workers from "taking their jobs" but what the discrimination was actually causing was for the black workers to accept lower pay and then receive the jobs anyway. The law was motivated by the desire to prohibit the latter and thereby cause the black workers to lose their jobs because then the discrimination would manifest in the hiring decision rather than the wages.
This is the same category of thing which is happening with Uber, except that the groups aren't black people and white people, they're part-time Uber drivers and full-time ones. The full-time ones want the part-time ones out of the market, so they keep lobbying for laws to make casual acceptance of fares more burdensome.
> The same things is true of things like safety regulations. It costs more to be safe, and you have to charge more or hire less if you're going to have them. But overall, society is better for them (even though some people no longer have jobs).
The premise of safety regulations is that people are busy and don't have time to read through statistical studies to determine if a more expensive product is worth the cost because it's sufficiently safer, so the government should do the evaluation and then require the ones that are worth the cost.
The problem is the government doesn't require the ones that are worth the cost, they require that ones whose manufacturers or other interest groups have the best lobbyists even when they're not worth the cost, and then net-negative rules accumulate over time. Soon you have a thicket of rules where the vast majority aren't worth the cost, and a tiny minority that are but are mostly things the market would have demanded even without the mandate. This is a big reason why, for example, it's so expensive to build housing in the US and high rents are causing homelessness, preventing family formation and transferring wealth from working people to landlords.
Notice also the scam here: New "safety standards" are passed but they don't apply to existing buildings, so people continue living in the existing buildings (which by this logic are unsafe) because now newer buildings have been made prohibitively expensive. This benefits landlords, not safety, but attempts to remove the rules are met with claims of impacting safety.
And if you _can't_ find a solution that allows you to pay everyone minimum wage, then you don't get to do business. I can think of plenty of businesses I could set up that would make me money and allow me to pay the people that work for me below minimum wage. But, see, we don't allow that; and we created a minimum wage law to make it very clear that we don't allow that.
Not every business model is viable given the rules society has setup (to protext society as a whole)
This is just a rehash of Option 1. The point of surge pricing is to get more drivers to drive during peak times. If you're instead using that money to pay other people to be idle then the average driver makes less money because part of what would have been their compensation is now going to pay someone else to sit around idle, and they lose the ability to make a higher hourly rate by working only during peak demand. Which in turn reduces the number of drivers available during surge pricing and there goes your funding source for hiring more drivers, so you're back to laying off lots of drivers who would otherwise have part-time work, but now also reducing the median driver's hourly rate.
> Not every business model is viable given the rules society has setup (to protext society as a whole)
Minimum wage laws in general have never protected anyone. If there is another job available to you that pays more than minimum wage and is otherwise on equally favorable terms, you would have taken that one regardless of whether a lower paying job is available. If the lower paying job is better, e.g. because it pays slightly less but you also have lower costs in terms of commuting distance or greater flexibility in hours etc., taking away that option "for your own protection" is patronizing BS.
This is why minimum wages are set at the level that only ~1% of people make minimum wage, because it minimizes the damage done by the law while still allowing opportunistic politicians to claim they've done something. Actually doing something is creating opportunities for people that have better conditions or pay higher wages so that it doesn't matter if someone is offering low wages because people aren't desperate to accept them for lack of alternatives.
Notice also that taking away alternatives can do more than just force you to take a worse one. It can make the worse alternative worse. Suppose there is a job with low pay but it's across the street from where you live, and another one with an hour commute each way, costing you $40 and two hours/day. You take the first one unless the second one pays significantly better, at least several dollars/hour more to compensate you for the gas and the time. Unless the first one is banned and goes away because it was $1/hour below the "minimum". Then not only are you stuck with the second one, they can lower their pay to the minimum when they would otherwise have had to pay more to compensate for the commute because you no longer have an alternative.
Price controls are bad.
That "if" there is doing a lot of work. I think you underestimate how many people out there are in a situation where it's the job they have or the street. Not everyone has the option to just go pick another job, and the people that don't is heavily skewed towards the people with the worst jobs.
That's making the opposite case from the one you want. You take away the lower paying job when it was the only one available and now they're on the street because there is no alternative.
"Fortunately", in more cases than not the "if" was the actual. This is geometry: If there is one viable employer within 50 miles of where you live then statistically there are four within 100 miles, 9 within 150 miles and 16 within 200 miles, because area is pi r^2. So if you take away the first job there is a large chance that there is a second one with a much worse commute. But the commute is going to more than eliminate any value from getting paid slightly more, which is why they didn't take that job to begin with.
It seems perfectly predictable that a loophole you actively exploit will be closed off. Don't build your business model around loopholes, or be prepared to face the consequences.
The number of drivers needed at any given time is completely variable. It's obviously a larger number during peak travel periods.
Suppose number of drivers needed off-peak is 100 and the number needed at the peak is 500 and they have 300 drivers. They need to sign up another 200 drivers to satisfy the peak demand, but they already have 200 more than they can use off-peak. What would you have them do? They effectively need a large proportion of the drivers to be working part time specifically during peak hours.
Moreover, there are many people willing to do that. They're not sitting in their cars idling, they're at home doing chores or other contract work and they only get in their car if the app tells them they can get paid. This is not a problem for the people who are satisfied with it, and why are the people who are unsatisfied with it even doing it? If you don't like driving for Uber, don't do it.
That's variable based upon time of day, not completely variable. It is not a new problem either. Take public transit: drivers may hate split shifts, yet they are given well defined shifts that they are paid for.
On top of that, a company that operates through an app ought to have the ability to develop software to relatively reliably predict demand.
> Moreover, there are many people willing to do that.
Willing, or desperate? For example: relatively few people want to be on-call replacement workers. They either do it because they need the money or they do it because they are hoping to get their foot in the door. Those who do it willingly are typically doing so for extra cash and because they don't have any other obligations (e.g. retirees in some fields). Now imagine that an entire company is based upon the concept of replacement workers. That puts Uber closer to the exploitive end of the spectrum than the opportunity end.
It's completely variable. If there is a major sporting event in your city, the demand is going to be much different than it is at the same time of day when there isn't a major sporting event. Demand is affected by weather, public transit disruptions, current events etc. It's not just time of day.
> Take public transit: drivers may hate split shifts, yet they are given well defined shifts that they are paid for.
Public transit has internal buffers that absorb demand. You have a bus which seats 40 but typically has 7 passengers. If there is a demand spike, this time you have 35 passengers, but this is still less than 40 so you don't need any more drivers. If that happens with Uber, they suddenly need five times as many drivers.
> On top of that, a company that operates through an app ought to have the ability to develop software to relatively reliably predict demand.
They could certainly predict part of the demand, but then what? You don't know ahead of time what time of day it's going to rain and cause a ton of people who usually ride a bike to want a ride. There is still a high amount of unpredictable variability in the demand.
> Willing, or desperate? For example: relatively few people want to be on-call replacement workers. They either do it because they need the money or they do it because they are hoping to get their foot in the door.
Let's consider these people then. Their options are to have no job and likely run into serious financial difficulties, take the on-call job to cover some bills while they look for a better job, or take some even worse job than the on-call job, but that might not be worse in a way that has been legislated against, e.g. because it's two hours away and there is no law against having a four hour round trip commute.
The only reason they'd take the on-call job is if their other options are worse. But if their other options are worse then taking away the on-call job option isn't helping them. To actually help them you need to give them some options that are better, in which case you still don't have to prohibit the on-call job because then they'd just choose the better alternative once it's available.
> Those who do it willingly are typically doing so for extra cash and because they don't have any other obligations (e.g. retirees in some fields).
Then why shouldn't those people be able to do it, and get the extra cash?
> Now imagine that an entire company is based upon the concept of replacement workers.
Suppose Uber was part of Costco but otherwise operated in an identical way. Is that supposed to make any difference?
That's Uber's business problem to solve, though, not ours.
Sucks to be them. The solution isn't "well, let's make it easier for Uber and screw over their not-employees".
The government, the people, are not obligated to ensure profitability is possible for every corporations every idea.
Now that they won and are making money, boo hoo the government is being tough on us.
The solution is going to be dictated by economics, not magic. There is no option where they convert all of the part-time drivers to full-time without any increase in the demand for rides.
What they're trying to do is avoid cutting off the part-time drivers entirely. But stop trying to force them to do that, it doesn't actually help people.
I don't expect them all to be converted to FTEs. But this unavailability BS is just that, BS.
"You are unable to log in because we have enough drivers to meet anticipated demand." Simple. Not log in, and then do a job or two then "oops, you've been randomly selected to be unable to earn money for the next hour".
Because if you're just at home, car centered infrastructure while expensive, inefficient, and dangerous, does function. But then, if you leave home on a business trip or a vacation... the problems become quite apparent quite quickly.
And you're completely correct here diagnosing the problem:
> Suppose number of drivers needed off-peak is 100 and the number needed at the peak is 500 and they have 300 drivers. They need to sign up another 200 drivers to satisfy the peak demand, but they already have 200 more than they can use off-peak. What would you have them do? They effectively need a large proportion of the drivers to be working part time specifically during peak hours.
Where I disagree is that there's a car-based answer to this, because restricting ourselves to working within the bounds of the car has caused the damn problem: because you need X number of cars with X number of drivers available to move Y number of people at Z time of day, and all three of these are going to change with availability in unpredictable ways. Whereas just... good mass transit could move all of those people, with less fuel, FAR less vehicles, and while those journeys would all probably take a bit longer even in ideal conditions, they would be safer, our air would be cleaner, and you wouldn't even need a taxi company or an app that pays people slave wages to take you places.
Moreover, even if you build more multi-family housing and mass transit, you're still not changing the nature of the issue, only the scale. There will never be 100% mass transit use because there will always be higher and lower population density areas and some proportion of people living in the latter. Then the people who live outside the reach of mass transit may want to come inside it from time to time, and you'll still have car service for that, and still have peak and off peak, and still have to answer the same questions even if there are only a third as many people doing it.
Then you get traffic congestion in the city because those people come into the city in their cars. But you can't just add mass transit where the traffic is because those people still need to traverse the part of their path where it isn't.
Why? All Uber cares about are the fees it collects, which are dependent on the total number of miles and total number of rides. It has no reason to care if its drivers make minimum wage or not, unless it can be shown that if they cannot, Uber will not have enough drivers. Fortunately for Uber, there is no evidence that this is the case.
Is the question "are we breaking any laws" not a reason to care?
I don't recall anyone demanding that. Maybe things have changed since then, but back when I worked in restaurants if things were slow I'd be sent home and know when I was expected to be back be that the next day or in time for the dinner rush. I wasn't randomly clocked off for 15-30 minutes, and expected to hang around, then suddenly told I'm back on. In fact we'd call that wage theft, (which is very common in the US). But suddenly for Uber such a thing is acceptable.
That's seemingly what OP was demanding, given the displeasure he was expressing at uber for the practice.
>but back when I worked in restaurants if things were slow I'd be sent home and know when I was expected to be back be that the next day or in time for the dinner rush. I wasn't randomly clocked off for 15-30 minutes, and expected to hang around, then suddenly told I'm back on. In fact we'd call that wage theft, (which is very common in the US). But suddenly for Uber such a thing is acceptable.
It's the difference between employment vs working as a contractor. Cab drivers, who also work as independent contractors. No fare, no pay.
>The tight margins of the hack trade can leave cabbies feeling frustrated. “Sometimes, I don’t like it, because I have the potential to lose money,” said M. D. Islam, a cabby from Queens who has been driving for six months. He often earns less than $100 a day, he said; if his cab breaks down, or he can’t find passengers, he may end up in the red.
https://www.nytimes.com/2012/05/23/nyregion/new-york-taxi-dr...
From the OP
> Uber runs an algorithm which kicks drivers out of the app randomly if demand gets too low, without warning or indication of when they can get back in. It can be minutes or hours.
I think the OP makes it very clear that the issue is the lack of communication especially around when they can work next, not that Uber isn't willing to maintain a surge staff during minimal demand.
"When they can work next" is entirely dependent on supply and demand. Also, it seems like he was more upset about drivers having to wait around while not getting paid, than having to periodically check the app. From the OP:
>To avoid having to pay any difference to make up the hourly wage to drivers, Uber runs an algorithm which kicks drivers out of the app randomly if demand gets too low, without warning or indication of when they can get back in. It can be minutes or hours. So the drivers remain on the road, driving/idling, waiting to get back into the app. The "work" is still getting done, but it doesn't count against Uber.
In a later comment he also lamented about how uber was "leave [drivers] hanging by an on-call thread". I doubt that if uber added push notifications for slots becoming available, that OP would be even slightly placated. The issue is that there's more willing drivers than active "slots" available, since such slots uber have to pay for. As a result, there's still going to be people waiting around for a chance to make money, while being unpaid. Adding push notifications only means people don't have to check their phones every 5-10 minutes for a slot, but they're still forced to wait around unpaid.
Are you really going to try to make the case that a company the size of Uber finds the demand in NEW YORK, of all places, unpredictable? That speaks more to incompetence on Uber's part than any unrealistic expectations elsewhere. Especially since restaurants have managed to operate in far more unpredictable conditions for all of human history.
> Also, it seems like he was more upset about drivers having to wait around while not getting paid.
Right, yeah. If they said hey, we don't need you for the next four hours, drivers don't have to wait around. If they say it'll be 15 minutes, drivers know to wait around. Instead, they conveniently tell them nothing, effectively keeping them on-call. A bit of communication fixes that.
That's absolutely NOT the difference between employment and contracting. The general expectation from the IRS is that if you are setting someone's hours (and Uber is, the driver chooses to be available, but within that availability window, Uber can arbitrarily define them as unavailable), then they are an employee.
Contractors don't just hang around your job site because you tell them you don't have work for them now but "stick around 5 minutes or 2 hours, we might have some then".
Amazon similarly abuses on-demand contractors and we see this for example in the little popup trailer parks in their distribution center parking lots during holiday crush...
I get it, as a consumer these are nice services to have - but it doesn't mean we have to be OK with these labor conditions. Further, from a self interested point of view, its a slippery slope to Amazon & the rest figuring out how to do the same to their SWEs over time.
This is basically the result of new york's legislation. In jurisdictions without such legislation, uber doesn't cap the amount of drivers that can be online. Moreover "availability" in this context is entirely arbitrary. The amount of fares available is still the same. The only difference is that uber caps the amount of people that can be online because new york puts them on the hook if anyone is "available" but doesn't make minimum wage. This was never the case for regular cabbies, but for whatever reason decided to apply this to ride hailing apps only.
>Contractors don't just hang around your job site because you tell them you don't have work for them now but "stick around 5 minutes or 2 hours, we might have some then".
Right, because the labor required to build a house isn't spiky like the demand for drivers.
I wonder, would cabs be more competitive of Uber's alternative business model, if Uber had to be fairer?
If so, then isn't Uber a sham? And shouldn't market forces see them go?
Airbnb used to be cheap... at the start. Then people added insurance, people had to get permits, and so on, just as Hotels, and other do. Now it's not so cheap any more.
One of the biggest disruptions is "don't pay your fair share". Or "pay people dirt wages".
Companies carve out a new business model, and aren't taxed or forced to pay as incumbents are.
Are people against people making a fair wage? Well guess what, you have to pay more for an Uber. And maybe Uber doesn't work as a business model unless it's too expensive.
Too bad! Uber has to work in the same ecosystem as everyone else... or it's a farce.
>I wonder, would cabs be more competitive of Uber's alternative business model, if Uber had to be fairer?
None of which applies to cabs, who are also independent contractors. For instance
>The tight margins of the hack trade can leave cabbies feeling frustrated. “Sometimes, I don’t like it, because I have the potential to lose money,” said M. D. Islam, a cabby from Queens who has been driving for six months. He often earns less than $100 a day, he said; if his cab breaks down, or he can’t find passengers, he may end up in the red.
https://www.nytimes.com/2012/05/23/nyregion/new-york-taxi-dr...
Well in an area I vacation there was a fatal fire at a weekly rental home with unlicensed electrical work, no working smoke detectors and no license to rent the unit (requires a town inspection). Of course the renters had used an app platform that gives them the illusion that these are somehow legal vetted and safe.
Instead you can end up in a rental with safety standards well below developing world standards.
The market they operate is of their own making, there is no "free market" argument to be made here. What's absurd is the mischaracterization of what their constructed market can provide to its participants, particularly when people are apparently randomly banned from participating it as they please.
Stock markets for example generally have circuit breakers and limit up/down rules that will put in pauses for a stock if there is too much volatility. However they do not institute asymmetric throttling by say restricting half of sellers from selling but allowing buyers orders through.
Uber gets to choose how many drivers to schedule at a given time. Expecting it to be unable to correctly-ish choose this number, when it's 50% of the work every other company has to do, is what's absurd.
These are 'zero hour' contracts a popular tool in the UK for businesses you screw over poor employees.
There is some utility for workers too - some people need to be able to say 'I'm not coming in today', or 'I'm leaving right now', often due to carer responsibilities though. The power lies with the business and the workers bad circumstances are often being exploited.
The laws exist for a reason and it's not to protect the wages class of people who drive taxis. Since ride-sharing doesn't break the letter nor the spirit there is very little desire to change laws to make it illegal.
An individual choosing to break the law on the other hand, well, we've already seen what happens, things get bad fairly quickly as opposed to the decade plus of relatively spotless service from Uber and similar companies. There is even a statistically significant gap in DUIs compared to certain cities that banned ride-sharing companies, though I haven't seen a proper meta-analysis yet.
https://www.abc10.com/article/news/local/wildfire/pges-mansl...
If you steal a potato, you will be arrested immediately and the case will be resolved in a few weeks or months.
If you illegally fix the price of potatoes and steal billions from the market, you will be allowed to operate for years in the open while a lengthy civil procedure eventually may ask you to give 1 or 2% of what you stole back in fines.
Don't blame the potato theives or potato cartels, blame the politicians that built the system to work this way.
There are more of them nowadays, with guns prominently displayed. It feels like we're not far from a world where they stop bothering to chase them down and just start shooting them in the back.
I think you just have a nice neighborhood.
Loss Prevention in damn near any store are not allowed to even make physical contact with a shoplifter - it's a "you're fired" level policy violation.
LP document, try to get the person to stop by hanging around or chasing them out of the store, try to convince the person to drop stuff, and if the person cooperates, keep them hanging around until law enforcement shows up.
Companies don't want employees or customers to get injured and come after them for damages, which would almost certainly be worth far more than whatever the person is running off with.
There are a slew of cameras covering the parking lots for a reason - with photos and video of the person, the car, etc - it is trivial for cops and courts to handle.
But just this year I saw a grocery store security guard beat the shit out of a homeless person that they caught stealing (this was in the receiving area, not the parking lot--no cameras as far as I'm aware). This may not have been within policy, or legal, but it surely happens. It takes a certain sort to opt into a job where your primary function is intimidating people all the time.
Additionally, the amount of video and audio (and other data) recorded is increasing, not decreasing. As tracking technology gets more sophisticated, systems of identification, location, and retaliation will also get more sophisticated. Even automated.
I don't think it'll be too long before we'll have "arrest-a-thief" as-a-service.
I believe that's called '911'...
https://www.brennancenter.org/our-work/research-reports/myth...
https://www.vera.org/news/the-truth-about-retail-theft
https://www.brookings.edu/articles/retail-theft-in-us-cities...
https://www.cnn.com/2023/11/17/business/shoplifting-retail-c...
The one sack of potatoes is likely actually a sack of potatoes every week, and it doesn't really take long to rack up a dollar amount worth prosecuting over. I can get my local detectives hungry to file a warrant at the $100 mark.
Shoplifting is a bad game where the store has every edge, and only has to win once. The shoplifter has to win every time. If they don't, they usually find the line between getting away with it and jailtime is much thinner than they thought.
Blame both.
And because these things are complicated, it's hard to boil them down to a few words that stick with voters, and attempts to do so come off as "West/East Coast Elitism". This is why populism is great for large monopolistic corporations so long as it can be channeled away from them (which they spend a great deal of money on).
And, yep: if four companies that control 97% of their market conspire to fix prices together, they are making a conscious decision to do so. There may be systemic failures which make it easier for them to do that than there should be, but they're still choosing to do it knowing that it's wrong. I'd go so far as to say that they're actually counting on people pointing the finger anywhere but at them. It's not us, it's just inflation! It's not us, it's the Biden administration! It's not us, it's something something something Covid! Yeah, okay, but at the end of the day, you're consciously choosing to price gouge.
Doctorow's point is, I think, that companies are deflecting from this by saying "it's not us, it's the apps, man! They're telling us what the optimal prices are, and we're just following their command!" But that's still, at the end of the day, price-fixing. It's _outsourced_ price-fixing, but it's still price-fixing.
Responsibility says it's shared to varying degrees through various classes of equivalence among all.
The thieves are trying to eat or feed people in the context of oppression that capitalism is. Capitalism is a system of oppression that requires poverty to work, so is an economic system of oppression. "Crimes" committed in the context of oppression are required when "noncrimes" are insufficient for meeting needs.
Cartels operate without regard for human life and support the context of oppression. Totally different level of responsibility.
Politicians create the system based on choices made due to support from the cartels. They're in some classes of equivalence with the politicians because they're interacting in a way that promotes the context of oppression.
They're all operating within the context of oppression that is individualism.
We're literally in a country that is setup to become a prison & the fences may already be built and just not fully turned on yet.
Examples? Usually when this argument is trotted out, there's two factors not mentioned: the amount "stolen" is the amount transacted (ie. total potato sold, rather than the additional profit made), or that the government's case is shaky and the settlement reflected that.
But your point shows the asymmetry in the system. Most thieves don't get to argue costs of goods stolen vs. sticker price of goods stolen and then get to reach a cushy settlement because the government is scared of losing a protracted battle.
People do sometimes go to jail for not paying workers what they’re owed (https://kfoxtv.com/amp/news/local/el-paso-contractor-jailed-...), but this article illustrates pretty clearly why you don’t hear more about it. Advocacy orgs aren’t going to brag about some random contractor or McDonalds supervisor going to jail, and the corporate fat cats they could brag about rarely commit wage theft themselves.
The management chain needs to be held more responsible for actions at the bottom. That doesn’t mean we put them in jail for every misdeed by some front-line worker, but they shouldn’t be allowed to turn a blind eye to systematic lawbreaking.
This should be easier to deal with than most crimes. The problem with individual crimes is that criminals are generally bad at thinking through the consequences. No matter how terrible the punishment is, you’re still going to have murders, because the typical murderer isn’t weighing the cost/benefit tradeoff.
Companies are much better at this, especially big ones. Make wage theft unprofitable and it will drop dramatically.
By all indicia, shoplifting is a much bigger problem. I know this myth and wage theft in general are really popular on social media. I think its lacking of representation in traditional media and prosecution is a mix of how much more clear-cut shoplifting is and just the victims report it more.
I still maintain that wage theft is covered and enforced far less than it should be given the scale, precisely because of who the victims and perpetrators are. Your link lays it out nicely: “ While wage theft is a horrible crime against workers, retail theft also directly causes higher costs for consumers and arguably hurts workers even more than wage theft does.” Don’t worry about what we’re stealing from you, peons, the real problem is what you’re stealing from us.
I worked a job where every person worked 63 hours a week standard at $7.50 an hour. We would have a lunch break where one person would go fetch lunch and bring it back each day. We would all meet in the break room and scarf down our food in a few minutes and get back on the floor. We literally clocked this on time cards. We might take up to fifteen minutes to eat but accounting would adjust it to 30 minutes every time. No consultation, warnings or notices of any kind. The timecard was gone at the end of each week so you had no record of your actual punches.
They provide theft data from the FBI, that is then contradicted directly by a non-scientific survey performed by a lobbying group of their members, for political purposes. It also fails to differentiate between shoplifting and outright robbery (the difference in my mind being the use of deception vs the use of violence).
They then choose the latter as a representation of fact with no caveats.
I have no idea whether wage theft is more or less than shoplifting. Anecdotally, I am among numerous people who have had 5 figure sums stolen through wage theft, yet none of these people have shoplifted anywhere near that amount.
The potato cartels are controlling the politicians. They are directly to blame.
Get rid of the super-rich and we will get politicians that work for the public instead of the super-rich.
That steal the goose from off the common,
But let the greater villain loose
That steals the common from the goose.
The law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who take things that are yours and mine.
The poor and wretched don’t escape
If they conspire the law to break;
This must be so but they endure
Those who conspire to make the law.
The law locks up the man or woman
Who steals the goose from off the common’
And geese will still a common lack
Till they go and steal it back.
English nursery rhyme, circa 1700.
Meanwhile, citizens are being stopped and harassed for their papers because they don't look right.
Have you been to San Francisco?
We don't prosecute petty crime in America. If you want a proper example, compare it to wage theft (including by small businesses).
Yes we do; at rates that horrify the rest of the world. It's very expensive. You can find a lot of detail here: [0].
> Most people in the U.S. criminal legal system are not accused of serious crimes; more often, they are charged with misdemeanors or non-criminal violations. Yet even low-level offenses, like technical violations of probation and parole, can lead to incarceration and other serious consequences. Rather than investing in community-driven safety initiatives, cities and counties are still pouring vast amounts of public resources into the processing and punishment of these minor offenses.
I've probably committed misdemeanors; I don't think I've committed a felony. If misdemeanors are committed at a higher rate than felonies, and felonies are prosecuted at a higher frequency than misdemeanors, most prosecutions will be misdemeanors and most uncaught crime would have been charged as a misdemeanor.
> low-level offenses, like technical violations of probation and parole
It's difficult to call probation or parole violations "low-level offenses" without knowing the underlying offense.
So... We do prosecute petty crime? Ok then.
And since America has far more prisoners than basically any other country... We're prosecuting a lot of them.
> It's difficult to call probation or parole violations "low-level offenses" without knowing the underlying offense.
Feel free to read through the link instead of just the quoted section. There's no shortage of statistics and source data in the Methodology link.
Politicians are only doing what the potato cartel is telling them to, because if they weren't they'd be replaced by big-potato-friendly politicians. You can't blame a single actor. What's to blame is the system itself. As long as what's driving it is capital, whomever and whatever makes it grow most will be rewarded, under the risk of being replaced. There's only one metric that counts in this game, and it's no surprise that everything arranges around its optimization.
World is controlled by big potato.
-- Snuff by Terry Pratchett
There is no law that you can pass to make the billionaire asshole not be an asshole. You can make him not a billionaire, but the inhabitants of the American society will not allow that.
That is a population problem. Not a political one.
The corporations and politicians are not independent though. The corporations lobby to get a rigged system they want.
Even craigslist or ebay or the very first Ford Model T. They break rules because that's the only way to test the waters and see if the public wants the rule broken?
Compare that to Airbnb or Uber whose business model was "Ignore the law" in the very beginning, which is why they got banned in a bunch of places. YouTube's business model was never "Ignore the law" nor was it banned on as a wide scale as Airbnb and Uber.
With Airbnb, there is no way to use the service as a host without violating the law in lots of jurisdictions. The service literally exists to glean some profit off facilitating illegal hotels.
With Tesla, I've no idea if there are laws preventing direct to customer selling, the "land of the free" has a lot of laws preventing freedom.
Ahh, land of the free
I don't know about Netflix.
Private companies running a taxi service (arranged by phone) were widespread in the UK long before Uber, and surely also other places. Why couldn't Uber start there, if the USA was too restrictive?
Further, I don't think Uber started out breaking regulations. Initially you could only hail black limos and which were licensed. They only started offering rides from unlicensed drivers in response to competition from Lyft. Lyft in turn started as a long-distance ride sharing company which is also legal. So the hurdle for either company to move to the UK was even higher. Moving an established company to a less important market seems far fetched
Uber started off great but quickly became incredibly expensive thanks to surge time and increased costs.
So I cant use my car to carry out people, without a permission. However, if I do it with uber, I suddenly can!
More than this, I wonder if I can create a company to do taxi bussiness. I will buy 5 car, then rent out 5 more, do taxi bussiness… what makes uber so special, I wonder
How about I go into your house and break the laws around theft? I promise to do good things for society with your property. The ends justify the means, according to your argument.
How do you feel about protesters who carry out acts of civil disobedience, violating laws to draw attention to the issue? Just curious.
Some laws are just, some aren't.
I can even accept exceptions for proportional acts of violence against evil people... But the way you speak is normally used by people trying to perpetrate moderate (a few times even large) acts of violence against large groups of innocent people. So, if that's what you want to know, I normally make exceptions for proportional acts of violence against that last group.
Craigslist seems like a straightforward digital version of what newspapers and community boards were doing for a long time. eBay is just a digital version of an auction house. And the Model T was just a cheaper more widely available car compared to the cars that came before.
None of them seem comparable to AirBnB (subverting hotel regulations by pretending to be something else) or Uber (subverting taxi regulations by pretending to be something else)
ebay used to allow the sale of presription drugs, prescriptions themselves, body parts , animal cadavers , pirated software, and shipping of weapons to restricted global areas.
ebay was also an unreported tax-haven-ish thing for a few early years.
(ebay was great fun to browse around in the mid 90s.)
the production of the model T had some interesting quirks. When production ramped he essentially bought the entire workforce from certain regions and caused all sorts of social issues. He had his employees self-tattle on each other for 'moral standards'.
The model-t itself was also produced off a different patent that was held by someone else and ignored; it was fought for later and won by Ford in 1911.
Because it was the same thing.
Craigslist and ebay were "unregulated marketplaces".
You're absolutely correct that YouTube complied with the Digital Millennium Copyright Act (DMCA) by implementing a takedown system for copyrighted content. However, YouTube's early operations still faced significant legal challenges and criticism because its platform enabled widespread copyright infringement on a massive scale. secondary liability. Viacom claimed that YouTube was aware of the widespread infringement and benefited from it, which they argued disqualified YouTube from DMCA safe harbor protections.