Anti-Capitalist Sentiment (with some morality)

[OngBonga]

Ronaldo doesn't insure his legs. Real Madrid (his employer) do. They're the ones who invested over £100m in him. Likewise, Kim's arse will be insured by her record label.

I'm probably wrong actually. I'd imagine both Ronaldo and Madrid insure his legs.

[Jack Sawyer]

Ronaldo doesn't insure his legs. Real Madrid (his employer) do. They're the ones who invested over £100m in him. Likewise, Kim's arse will be insured by her record label.

You sure about this?

[Jack Sawyer]

I'm probably wrong actually. I'd imagine both Ronaldo and Madrid insure his legs.

Oh ok

[Jack Sawyer]

So why does the black market exist? Why is my weed consistently good quality?


Sometimes, crap quality weed hits the market. It's rare, because the person who sold it will lose customers as a consequence. That's why most dealers I know will reject crap quality weed.


Despite being an unregulated market, cannabis dealers effectively regulate themselves for their own business interests.

Going back to my point above

While theoretically it *should* work everywhere, I cannot see every industry as exactly equal in the today’s real world.

But still, I’ll try to give you some play. Is there like a baseline? Like a weed review? Weed Times Magazine? Can you consistently say that a certain weed is better than another one? Like the one in Savages? Or is it about taste? Are you sure that the weed you have access to is not soundly crushed by various weeds from somewhere else? Some other manufacturer?


I don’t know, because I don’t smoke. Not even cigarettes. I never really had any interest in smoking crap.


I do have interest in internet access though

[Jack Sawyer]

I'm probably wrong actually. I'd imagine both Ronaldo and Madrid insure his legs.

Here

https://healthyceleb.com/top-6-body-...e-insured/4813

https://www.msn.com/en-au/entertainm...rts/ss-BBeQonq

Fun fact: apparently Real did though. Still example is valid as others have done their own insuring; it's a possibility if you want, need and have the resources

J-Lo's ass is $27M? Holy shit, now that would be one hell of an anal

[OngBonga]

Can you consistently say that a certain weed is better than another one?

Sure I can. I've been smoking the shit for over 20 years now, I know quality weed when I smoke it.

That said, I'm in no doubt that American weed will be, on average, better than British weed. Why? Because it's legal. Those who grow it here are, by the very nature of cannabis law, criminals. You're not going to get someone quit their job as a science teacher to grow weed. In USA, growers could be deeply intelligent experts who understand plant biology before getting involved with weed. People like mojo, rather than people like me. Also, investment is higher, better quality equipment, because there's no need to hide it from authorities.

That said, there's no reason why it's not possible to match American standards in the UK. It's just harder and more expensive.

I can argue this is evenidence of deregulation (in the form of decriminalisation) improving the quality of a product. Of course, you can counter that American weed is more regulated than British weed (license, quality control, permitted fertilisers etc) and that's why the quality is better. I don't think so, but I can't be sure. I can still find quality weed that is comparable to the best American weed, it's just harder to get hold of and more expensive. The obstacle to overcome is regulation in the form of law, that's what's making it rare and expensive.

[OngBonga]

Oh ok

Yeah I mean Real paid a then world record fee for Ronaldo, and of course his salary is huge, they have to protect their investment. Of course they insure their players. But obviously Ronaldo will need to insure himself too, because he's only contracted to Real for a fixed term, while his career might be longer.

I didn't really think my comment through.

[Savy]

Do you think the principles behind buying in bulk & getting a discount apply to insurance in the same way?

[OngBonga]

Do you think the principles behind buying in bulk & getting a discount apply to insurance in the same way?

Not in the same way because one is a product whereas the other is a service. However, insurance is kinda like the bookies, where the more people they insure, the less probability they have of making a losing bet. Insurers are essentially betting you don't break your leg or whatever. So yeah, bulk is still good for their business, and therefore lower cost for the consumer.

[Savy]

Not in the same way because one is a product whereas the other is a service. However, insurance is kinda like the bookies, where the more people they insure, the less probability they have of making a losing bet. Insurers are essentially betting you don't break your leg or whatever. So yeah, bulk is still good for their business, and therefore lower cost for the consumer.

So they aren't (I agree).

[OngBonga]

Well yeah just like rubgy and football aren't the same, so tactics for one sport don't necessarily apply to the other. Doesn't mean tactis are useless for one of the two.

I'm not sure what point you're trying to make, other than stating the obvious in that one is a service while the other is a product, meaning there are obvious and profound differences between the business models.

[OngBonga]

The point I'm making is that regardless of whether it's a service or a product, bulk is good for both, and results in lower costs to the consumer. How those lower costs come about differs from business to business, not just from sector to sector.

[wufwugy]

Sure. Now, buying in bulk should not bring down costs? I assume that if you buy 10 sandwiches, you may get at least 1 free. Or some free OJ.

Yes. The reason why is called "economies of scale."* Interesting to note, economies of scale is one of the couple elements that make up monopolistic attributes that arise naturally.

We are buying insurance against something that hasn't happened yet. By buying in bulk, ergo 1 entity buying all of the insurance, it *should* bring down the price paid. Like buying 10 sandwiches and getting 1 free, Or some free OJ.

It does bring the price down in this one regard. Depending on how it is done, unintended consequences can arise that increase the price by net. When you have insurance you DO want to be a part of a large, varied pool. But that doesn't mean that you want insurance for everything. Regarding healthcare, insurance works very well for catastrophic but not as well for routine or boutique care. The rapid growth in costs of healthcare is in part because government policies are making them cover more than what they should.

Singapore is a good example of avoiding the pitfalls that every western country has undergone regarding government intervention into healthcare. Their system is mostly oriented around catastrophic covered by insurance and most everything else from first-party payment systems (types of health savings accounts).**

Sidenote: these first party purchases obviously already exist, like when Cristiano Ronaldo buys insurance for his legs, or Kim Kardashian buys insurance for her ass. Those that need it, can get it as per usual

Those are not first party since the insurance company would pay for the care. I'm not sure which of second or third party payments Ronaldo/Kardashian paying the premiums to the insurance companies constitutes.

To understand how to know this isn't first party payment, consider this: if Ronaldo has a deductible of $0 and pays his premium every month, it doesn't matter to him what the cost of the procedures the insurance company covers are. They can be $100 or $10000, doesn't matter. BUT if he pays for all he consumes out of pocket, all of a sudden he cares what the price tag is. Ronaldo and the insurance company each have different asymmetries of information regarding what is best for Ronaldo (and best for the insurance company). Sometimes the insurance company (second or third party payment) can have efficiency advantages and sometimes Ronaldo (first party payment) can. In general, as we have seen play out in the real world, the net effect of moving away from first-party payment is an efficiency loss.


*Essentially, growth in efficiency as scale increases.

**There are politicians in the US who want to convert to a similar type of system (like Rand Paul), but their bills never gain traction in large part because the media misuses statistics and scaremongers.

[wufwugy]

Yup, theoretically.

And meanwhile, back in Gotham

https://motherboard.vice.com/en_us/a...s-after-harvey



Take away the rules, take away the regulations, and instant destruction happens.

I can see some irony in there among economic theory and the law of unintended consequences

Earth is cooling because it snowed outside.

[wufwugy]

Do you think the principles behind buying in bulk & getting a discount apply to insurance in the same way?

Buying in bulk benefits due to efficiency gains in higher production and distribution. It's something like a factory can make 100 widgets at $10 a piece or 1000 widgets at $9 a piece. This type of thing happens for a variety of reasons that include specialization of labor and cost of machinery.

"Discount" to insurance comes when in a large, varied pool because the insurance company takes on less risk. Imagine one company that insures everybody who works at Microsoft versus another company who insures the same quantity of people but they all have diabetes. One of those scenarios is vastly more expensive for the insurance company and thus for the consumer.

[wufwugy]

So why does the black market exist? Why is my weed consistently good quality?

Sometimes, crap quality weed hits the market. It's rare, because the person who sold it will lose customers as a consequence. That's why most dealers I know will reject crap quality weed.

Despite being an unregulated market, cannabis dealers effectively regulate themselves for their own business interests.

The term "black market" is misleading because it can seem like it is not regulated yet in fact the market is highly regulated. Economics thinks of markets in terms of goods and services (or labor or financial products, etc.). So, regarding marijuana, it would be the marijuana market, which is an intensely regulated market, so much so that most types of transactions are strictly illegal. Within this marijuana market, transactions that bypass the regulations do happen, which is where the idea of "black market" comes from. We should be sure to not think of this meaning that it is unregulated because the secret transactions of marijuana are a product of the intensely regulated marijuana market.

Markets that are so intensely regulated that secret transactions are common tend to have costs that are many multiples greater than they otherwise would be. I looked at some numbers a while back and it appears that if marijuana was as legal and unrestricted as wheat, an ounce of top quality weed could be like ten cents or some crazy low price.

[Jack Sawyer]

Earth is cooling because it snowed outside.

I think I heard this argument literally on fox news and many other right-wing news sources before

Edit: Yup

http://www.cc.com/video-clips/r8c9ac...-war-on-carbon

[wufwugy]

I do have interest in internet access though

Keep in mind that it is because of the price system that you have internet access in the first place, and also why what you will have in the future will be better.

[Jack Sawyer]

Buying in bulk benefits due to efficiency gains in higher production and distribution. It's something like a factory can make 100 widgets at $10 a piece or 1000 widgets at $9 a piece. This type of thing happens for a variety of reasons that include specialization of labor and cost of machinery.

"Discount" to insurance comes when in a large, varied pool because the insurance company takes on less risk. Imagine one company that insures everybody who works at Microsoft versus another company who insures the same quantity of people but they all have diabetes. One of those scenarios is vastly more expensive for the insurance company and thus for the consumer.

Yes, but it doesn't work that way. Ideally you should be on insurance *before* you get diabetes, so that when you happen to get (the chance thing ong was talking about) you can deal with it in a more humane way.

Paul Ryan was like: "it's not fair for the healthy to pay for the sick". Needless to say, this saying is not only heartless, but also stupid

[Jack Sawyer]

Markets that are so intensely regulated that secret transactions are common tend to have costs that are many multiples greater than they otherwise would be. I looked at some numbers a while back and it appears that if marijuana was as legal and unrestricted as wheat, an ounce of top quality weed could be like ten cents or some crazy low price.

Yup, and the cartels DON'T want this

Which is why "good people don't smoke marijuana"

[wufwugy]

Yes, but it doesn't work that way. Ideally you should be on insurance *before* you get diabetes, so that when you happen to get (the chance thing ong was talking about) you can deal with it in a more humane way.

Paul Ryan was like: "it's not fair for the healthy to pay for the sick". Needless to say, this saying is not only heartless, but also stupid

Paul Ryan is a stupid tool.

[CoccoBill]

https://www.theatlantic.com/ideas/ar...market/600859/

[MadMojoMonkey]

https://www.theatlantic.com/ideas/ar...market/600859/

What are you going to do about it, though?

[OngBonga]

Consume less.

[CoccoBill]

I remember well paying highway robbery prices for internet back in the late 90s here, while similar and faster connections were available in the US for cheaper. Now I pay $45/mo for gigabit fibre and about $22/mo for 200Mbit cellular, both unthrottled and unlimited. My understanding is both of those cost several times more in the US now, with very limited availability. Something's changed quite a bit.

I'm no economist, but it would make sense to a layman's ears that antitrust regulations could enable competition.

[wufwugy]

antitrust regulations could enable competition.

They can (and do). What's the cost?

[CoccoBill]

Nobody seems to know, but without a doubt there are some, depending on how the regulations are implemented. According to research it does seem though that at least in the US and the Netherlands the benefits outweigh the costs:

"The analysis showed, first, that competition is typically desirable. Second, it was found that without antitrust policy, firms could and would (permanently) exercise market power to the detriment of overall welfare as well as consumer welfare.

Subsequently, an estimation of the costs and benefits of antitrust enforcement suggested - at least for the United States and the Netherlands - that the realised benefits overtop the realised costs by far as long as overcharges/redistribution effects and deadweight losses are considered as welfare loss. However, under a total welfare approach, only the avoidance of deadweight losses can be considered as benefit of antitrust policy and then, the benefits estimated for cartel and merger enforcement under a disaggregate approach weren’t able to cover the derived cost estimate for the United States and the Netherlands. However, it should be kept in mind that the deterrence effect as an important benefit of antitrust laws and enforcement didn’t enter the quantification. Generally, it has to be reminded that some cost and benefit components can hardly be measured with satisfactory accuracy."

http://ftp.zew.de/pub/zew-docs/dp/dp08107.pdf

Conclusions on page 35.

[wufwugy]

Nobody seems to know,

Quantification is limited to modeling that shows a portion of effects.

but without a doubt there are some, depending on how the regulations are implemented. According to research it does seem though that at least in the US and the Netherlands the benefits outweigh the costs:

"The analysis showed, first, that competition is typically desirable. Second, it was found that without antitrust policy, firms could and would (permanently) exercise market power to the detriment of overall welfare as well as consumer welfare.

Subsequently, an estimation of the costs and benefits of antitrust enforcement suggested - at least for the United States and the Netherlands - that the realised benefits overtop the realised costs by far as long as overcharges/redistribution effects and deadweight losses are considered as welfare loss. However, under a total welfare approach, only the avoidance of deadweight losses can be considered as benefit of antitrust policy and then, the benefits estimated for cartel and merger enforcement under a disaggregate approach weren’t able to cover the derived cost estimate for the United States and the Netherlands. However, it should be kept in mind that the deterrence effect as an important benefit of antitrust laws and enforcement didn’t enter the quantification. Generally, it has to be reminded that some cost and benefit components can hardly be measured with satisfactory accuracy."

http://ftp.zew.de/pub/zew-docs/dp/dp08107.pdf

Conclusions on page 35.

He does a good job of showing the effects when modeling a slice of the whole.

Thanks. That was fun. I haven't seen the phrase deadweight loss in a while.

[wufwugy]

What variables not included in that model can you think of?

[CoccoBill]

After 7 beers not a single one.

[wufwugy]

Perhaps finding ones that adjust for how peoples' behaviors change over time when there exists firms with the kind of market power that antitrust laws are made for.

[CoccoBill]

Can you think of any situations where peoples' behaviors haven't or couldn't have changed?

[wufwugy]

Coercion tends to qualify for that.

[CoccoBill]

True. What about not having viable options?

[wufwugy]

Our vast landscape of amazing goods and services is built on what looks like lack of viable options at first.

[CoccoBill]

Should I interpret that as to mean the Atlantic article was all wrong, the prices actually aren't higher in the US, or that they'll be fixed by the markets soon?

[wufwugy]

The Atlantic article appears solid. Nobody can quantify the cost of antitrust regulation.

What we can do is qualify how goods and services grow and change.