Re: New N800 price point
 

I realize the blog was rather light, and didn't mean to reference it as an authority-- just thought I'd point people toward a conversation-starter. But there is a marked difference between the traditional supply-and-demand economy and a scarcity economy; supply-and-demand depends on a renewable resource-- at least, renewable for all practical purposes within a reasonable timeframe. Once you cross the peak production threshold with ANY commodity, typical rules of supply-and-demand evaporate.

Things don't have intrinsic value because they're scarce-- they do so because they're needed by someone who, for whatever valid reason, can't or won't pursue/create them on his own. This is accentuated by the specialist modus operandi resulting from the industrial revolution.

I should have referenced this article: http://articles.moneycentral.msn.com...anePrices.aspx. It's an op-ed piece, but Jubak knows his stuff. He's very sober, and very objective.

And I'd be a serious free-marketeer, too, if it worked with human beings. But it doesn't-- at least, not on large scales. between communities or isolated groups, sure. But history adequately shows that if you scale a demand up high enough (ie, oil) you end up with collusion, monopolies, consumer-antagonistic speculation, and other evils all well documented. That's where regulations originate; they aren't plucked from thin air. Regulations are a governing body's response to the screaming of its constituents. It's an unfortunate reality, and one many don't want to face, but with all restraint removed, too many businessmen will drive a business into the ground while simultaneously screwing everyone who built and supported it. My theory is that the uglier, greedier, more short-sighted folk tend to rise to the top (by the very virtue of those characteristics)... while the nicer sorts are trampled.

That's why I'm a FAIR marketeer. I think marketing systems and processes should be equally fair to the buyer and seller. I think there should be just enough common-sense regulation built-in to temper natural human greed and take the place of altruism that is sadly lacking in commercial enterprise. The best regulations are, though, enforcements of civil and criminal laws. Too often criminal businessmen see that they can influence justice and get away with large-scale crime. That in turn drives demand for what end up as burdensome regulations. Which is sad given that if politicians were honest enough, they would work to correct things-- but too often they're cut from the same cloth (which is why I tend to vote independent and third-party; my motto is "fire 'em all and start over").

/rant 2

EDIT: for proof that the US isn't even a free or fair market, I point to the carrier-driven US cell phone model. Feh.

Re: New N800 price point
 

Alas, that's also true of the stuff I did respond to. I really haven't the time, and so won't, but you may take it as a compliment that your responses make me want to argue rather than lambaste or leave.

Re: New N800 price point
 

Heh... I can go with a pre-emptive agree to disagree. ;)

Re: New N800 price point
 

Without some sort of world regulation system, there is no way to establish what you might call a fair market just in one country, because controlling the price (or competitive conditions or whatever) in that country just provides an incentive for those possessing resources to do business elsewhere.

Re: New N800 price point
 

I totally agree with what Texrat is saying.

I think what he means is that free markets do work as long as they're genuinely free for everyone, but when companies reach certain size they are able to stop the markets being free.

A small example I might have mentioned before: there is an ice cream company in the UK which dominates the market, and they use the vast amount of cash they get from this position to give retailers freezers covered in their brand's advertising. For a while they tried to force retailers to only stock their ice cream in these freezers, so any smaller brands of ice cream were shut out of that retailer because there was only space for one freezer. The shop's customers no longer had a choice of what brand of ice cream to buy.

In other words, in those retailers who took the freezers it was no longer a free market for ice cream, it was a centrally-planned economy run by the largest ice cream maker who could dictate prices and product lines without fear of competition. That eventually leads to expensive shoddy goods.

The UK government stepped in and banned this, they said you can give away freezers if you want but you cannot use them to shut your rivals out of retailers, because that's destroying the free market. The only thing that should decide the success of a product is a consumer choosing it from amongst its rivals, all on the same shop shelf.

The market isn't there for its own sake or for companies' sakes, the market is ultimately there for the benefit of consumers. If monopolies go against the interests of the consumer, then they have to be regulated somehow or broken up so they are no longer monopolies.


Well, it's swings and roundabouts, in some areas of business the US is a much freer market than other countries, but as you say it certainly isn't in the phone world, and that's done real damage to the US phone industry.

Just compare the prices, coverage and services of US carriers with the prices, coverage and services of those in Europe and you'll see a world of difference. Americans pay more but get less, and this is probably because it's much harder to change networks in America so there's far less competition.

America lags way behind Europe and Asia in terms of handset technology and network quality, with odd moments of brilliance like the iPhone being the exception rather than the rule (and despite its UI design, even the iPhone is technologically backward by European or Asian phone standards as it lacks 3G or 3.5G).

US phone prices and network charges are extremely high, with coverage and network speeds extremely low. America must have been one of the last places in the world to continue supporting analogue mobile phones, and it has one of the lowest mobile phone penetration rates in the developed world.

It doesn't have to be this way: if the US government banned phone locking and forced carriers to allow their SIM cards to be used in any compatible device, the US phone market would become extremely competitive and start to resemble the US ISP market, which has some of the lowest prices and highest quality services in the world.

Finland DID ban phone locking, and all of the above came true. Did it harm the Finnish phone industry? Absolutely not, it made it more competitive, more professional and higher quality. It kept companies fit because they had to work harder to win customers.

ISPs don't tell you what computer to connect to their network, so why should mobile phone networks?

Re: New N800 price point
 

[QUOTE=krisse;183348

It doesn't have to be this way: if the US government banned phone locking and forced carriers to allow their SIM cards to be used in any compatible device, the US phone market would become extremely competitive and start to resemble the US ISP market, which has some of the lowest prices and highest quality services in the world.

[/QUOTE]

What are you talking about?

Love to see that happens but this government still tries to help out big fat oil companies...

:confused:

Re: New N800 price point
 

One thing to consider when looking at oil is that the market is an oligopoly, in which the market is dominated by few sellers. The problem is that each of the sellers generally knows what the other sellers are doing and can adjust to keep up with the crowd. This is where the potential for cartels comes into play. Although a cartel is illegal in the US, on the global level it is what it is. Via OPEC, there is a tremendous amount of pressure to limit the supply of crude into the markets, because 1). it preserves the overall reserves of oil, and 2). it tends to keep the prices propped up.

The risk the cartel runs is that one or more of the members break with the group to increase production when they need the cash. Right now, the discipline within OPEC is very strong and there is very little chance of increased production (President Bush asked the Saudis last week to increase production, and they decided not to help him out).

So...a lot of the problem with oil is that the oligopolistic market structure does not act/react entirely the same as it if were a free market.

The same analogy can be applied to the mobile market in the US....few sellers who know exactly what the other sellers are doing (aided of course by being allowed to lock down phones and SIM cards).