The Answer to Predatory Business Practices
The Answer to Predatory Business Practices published by The 1st Amender
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Posted on 2019-02-14
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Adam Smith, in the Wealth of Nations book of 1776, referred to modern economics as it is currently understood. When he would look into the predatory practices of competition, markets, and how it all works, came into realizing these fundamental truths of natural markets.
- Competition & self-interest act as an invisible hand that regulates the free market.
- Competition keeps prices low.
- Competition keeps quality high.
- Government does not get involved.
- Needs of society are automatically met.
- Profit-seeking producers will make more.
These are fundamentals to what Adam Smith referred to as the invisible hand. And without getting too theoretical about it, the theory is simple:
So what does this have to do with predatory business practices? How is this even remotely relevant today, and how can we say that capitalism will somehow "self-regulate" when there is evidence all around us that the opposite is true. Simple. In order for a business to mistreat its customers and stay in business, it requires some sort of power over competition. How is that possible? Some would say with money that it can be done. Other ways through legislation that it can also be done. Yet with a company performing predatory practices, you have companies that don't in the same field. In order to screw a customer over, you have to somehow maintain your presence over competition that would "not" screw a customer over.
So how is it that predatory business practices exist today? Well, often by getting rid of competition. Often you have companies that are of special interest, or gain special interest with government entities. Usually through lobbying, they present hard cases to the benevolent hand of government, and present a case that would allow them to get above the cut of competition. Other instances of trade practices, attempt to remove competition by filing erroneous patents on the off chance that someone may seek to gain a competitive edge. This allows aspects of competition to disappear. And the bird of capitalism without competition is effectively a bird with its wings chopped off.
One of the primary forces of what makes a company honest is through competition. A company is not interested in harming you if they know that your money will go to their competitor. So the answer to predatory business practice is to encourage competition, keep markets open, and to those who seek to subvert it to see legal battles against it. Processes like this are already occurring throughout the nation to preserve the wings of the bird. "Right to Repair" movement, the aspect that proprietary parts and specifically designing an electronic to never be repaired except by the manufacturers of that product (Hello Apple, I'm talking about you) is an example of anti-competitive practices. Anti-trust laws are laws that exist on the books to help maintain competition, and not allow a company to screw over it's people. Because if you have a company that screws over people on the daily and you know it, perhaps they only exist if they remove competition!
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