Cartoon 778: Free market for whom?

The evangelist of capitalism exhort the virtues of the free market. In reality it is a conceptual “Shangri la”, “El Dorado”, or more apply put, “Fantasyland”.

Reportedly a free market is one in which businesses are left to compete among themselves and the market forces determine successes and failures. It is supposed to be the application of economic “Darwinism” or survival of the fittest.

American business capitalism is a bulwark made of artificial props. The incumbents crouch behind broad patents, tax loop holes, and a cozy relationship with the Supreme Court and politicians. Size matters in this environment. The more mass they obtain, the easier to shrew market dynamics. They act like “black holes” garbling up perceived potential challenges to their business model. Their intent is both horizontal and vertical integration.

The behemoths do compete among themselves for stock price increases and incremental market share gains. The goal is maintain the appearance of real choice and competition in the marketplace for consumers. In most cases there are just two companies in a given area. Their prices and offering vary little. They subscribe to the same business model. The game is fixed. Radical business models by startups are squashed [Lightsquare].

Seldom are they surprised and have to regroup, but there are a few cases. A prime example is the DVR [Digital Video Recorder]. It started as a geek item. Its high hardware price, and with the advent of TIVO, subscription fee was viewed by the Satellite and cable incumbents as an insignificant novelty. It was ignored. They were greatly proved wrong and have been trying to regroup every since. The “On-Demand” service is their best effort.

Another example is the availability of older movies and television shows. The tastes vary greatly. Therefore the business model of mass audiences fails. Enter Netflix. Its business model focused on individual tastes. It garnered a large enough library and distribution mode to grow very fast. It caught the media companies by surprise. They have been playing catch up. There most successful attempt is “Hulu”. They have also resorted to Samurai actions of slicing the competition. The media companies and Hollywood are trying to starve Netflix into submission. I wonder where the announced agreement between Redbox and Verizon expect to get their content [media]?

So far I have identified merely media lacking a free market approach. But the same is true for household products, and pharmaceuticals. Research most anything. You will find just a few companies provide about everything and move in lock step.

American capitalism today is an oligarchy environment maintained by political influence. The consumer is the “the mark” [patsy].