Re: Will the free market solve everything?
Damien Broderick (damien@ariel.ucs.unimelb.edu.au)
Mon, 24 Feb 1997 13:42:14 +1000
At 09:00 PM 2/22/97 -0800, JKC wrote:
>I manufacture 99% of the worlds widgets, you make 1% . I want to drive you
>out of business, so I figure I'll lower my price until you go broke and then
>I can jack them up to anything I want. So now you louse money on each widget
>you sell, the trouble is I do too. I have 99 times as much money as you do,
>but I'm lousing it 99 times faster. Even worse, because the price is very low
>the demand for widgets is huge, and if prices are to remain low I must build
>more factories and increase production. I'm lousing money faster and faster,
>meanwhile you just temporally halt production in your small factory and wait
>for me to go broke. It won't be a long wait.
Tell Rupert Murdoch's British newspaper competitors that. I've forgotten
the details, but there was recently a trade war in which his vast slush fund
subsidised what were effectively give-aways for months on end (I believe),
which not only starved the other papers and drove them to the wall but had
the effect (or was so intended; I don't know how effective it was) of
shifting consumer loyalty/habit-of-purchase to his product.
Damien Broderick