Monday, September 02, 2013

In Celebration of Labour Day: Market Failure's Biggest Hits

What so many managerial class fiscal conservatives never seem to get, is that the health of the Labour Market affects the health of the Market in general - and even the health and well being of the people in it. 

EG: The people least likely to get paid sick days or be able to afford unpaid ones are the people who handle your food.  The impact in lost productivity is many times what paying service workers enough to be above the poverty line and provide sick days would cost.

EG: With the winding down of train service and the increasing price of gas for a huge chunk of the Canadian population a single company, Greyhound, is their sole and only way of traveling.  A Corporate Monopoly controls the travel of millions of Canadians visiting family, following work or fleeing disaster.  They have used this monopoly to let service quality slide to virtually Dickensian levels and threaten to withdraw service without extortionate payoffs from provincial governments. 

EG: A neighborhood acquires a reputation and a customer base because of its character, its unique and independent businesses providing goods and services people cant find elsewhere.  That success causes commercial rents to rise.  And to continue to rise until all the independent, character filled small businesses are forced out of the area and replaced with the soulless  big-box chains that can afford the rents.  The thing that added value to the neighborhood is killed in the process of squeezing every last penny out of that value..

Anybody else have any examples?

3 comments:

131220 said...

http://www.winnipegfreepress.com/local/dauphins-great-experiment.html

Purple library guy said...

Market failure's greatest hits . . . Dunno, I seem to remember something about a bubble market in real estate bursting and masses of derivatives going poof, magnifying the losses, and a world economy going down the tubes as a result. There was something in the news about it a couple years ago, I'm sure of it.

Cliff said...

Right. Both systemic and structural failures. Economic conservatives really do seem to see the market - any market - as a perpetual motion machine, cranked presumably, by an invisible hand.

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