What a terrible article. The title and the first paragraph talk about how new business models are circumventing existing laws, which seems fair enough and actually quite an interesting subject.
Then, there is a switch to the most traditional of businesses with the most traditional business models. Who, the author argues, are engaging in price gauging. In the second paragraph he claims that apps cause this inflation ("so much of inflation can be attributed to a crime, done with an app"), then goes on to list a couple of traditional companies who are, he argues rising prices above inflation. And who he partially blames for inflation.
None of the examples he gives support the case he is trying to make in his title. Apparently being an "App" has absolutely zero to do with getting away with financial misdeeds.
None of the questions raised by the title are even investigated. And the core argument, that traditional companies are causing inflation, is never argued for. The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone. The source of the inflation being gone does not cause inflation to reverse. And so the fair market price would not get lower, getting something so basic wrong seems ridiculous for someone leveling serious accusations at companies.
> Then, there is a switch to the most traditional of businesses with the most traditional business models. Who, the author argues, are engaging in price gauging. In the second paragraph he claims that apps cause this inflation
He is saying that the traditional businesses use an app that allows for a legal way of price gauging.
> The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone.
The author claims, that these companies raise prices more than inflation based cost increases in production would allow for.
Did we read the same article? There are repeated examples of cartels colluding to fix prices which aren't being prosecuted because they're using a third party (app) to coordinate the collusion rather than doing it in a board room.
This is what has repeatedly bothered me about Doctorow, he writes quite compellingly on the surface, but the arguments are often sketchy at best, and the pandering to/expression of outrage often dominates any attempts at clear analysis.
The fact that this is seemingly the top comment shows how entrenched HN’s typical user is in making money off the predatory practices articulated thoroughly in the article.
I noticed you mistook "gouging" for "gauging", which I agree, would change it to an obviously-wrong essay that failed to back up anything.
There's a lot of other stuff that is unclear (questions in the title? the article says inflation goes in reverse?), but that one thing neatly explains the vibe that might have driven the rest.
Perhaps if there was a tighter line pointing at corporations using 'apps'.
Traditional rental property corporations, were pre-existing, and also adopted the use of an 'app' that allowed them to raise prices over the inflation rate.
So, traditional corps, taking advantage of the new 'app-crime-for-free' model.
But really, where the logic broke down a little. Was all those 'crime-apps' are actually reducing prices for most part. So should help inflation not hurt it.
While some of the article’s leading point in apps doesn’t clearly connected to collusion to raise egg prices, it’s all valid. Tearing it all down is sore of you.
This is all a result of a lack of active market regulation. The government needs to step in actively to keep a free market from collapsing into one of the natural end states. But the US has consistently been far too passive and accepts greedy companies far too readily.
If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently. Let them go through a cumbersome govenment approval process for price changes or something to cap margins. Price fixing cartels need to be busted more aggressively.
> If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently.
The fallacy is assuming that the government will make everything cheap for consumers.
In practice, government regulation of prices just changes the game. Look at any market with rent control: There are numerous meta-games around building or not building new supply, landlords are incentivized to not fix units because they know tenants don’t want to give up their rent control and move, and a new market emerges where people illegally sublet their rent controlled apartments because it becomes attractive to take advantage of the market demand that landlords aren’t allowed to capitalize on.
The other fallacy in all of this is thinking that companies control both supply and demand. For nearly all commodities, there is a price where consumers won’t pay for it. If rents get too high, people move to a different city. If gas gets too expensive they start carpooling and looking for WFH jobs. If eggs are too expensive they eat something else. These choices make people angry as hell, but there’s no denying that these choices exist. Companies can’t push past these limits and force people to buy at any price. They still have to discover that point on the supply and demand curve.
"But the US has consistently been far too passive and accepts greedy companies far too readily."
All companies are greedy. That's the reason for existence. Your point that monopolies and oligopolies need to be crushed is very valid though. I wish more mergers were rejected in the first place.
Regulating prices is a recipe for disaster though.
> The government needs to step in actively to keep a free market from collapsing into one of the natural end states.
Which is what, exactly? The US is per capita richer than almost all EU countries by a huge margin (with a few small exceptions mostly enabled by regulatory arbitrage targeting US money), so forgive me if I don't take your seething commentary about the US economic apparatus very seriously.
Algorithmic price fixing is certainly a not-insignificant part of the issue. But it's strange to see zero acknowledgement of the massive increase in money supply over the same time period. When doing causal analysis, we need to examine both the private sector and our government.
> But it's strange to see zero acknowledgement of the massive increase in money supply over the same time period.
Because when you look at inflation in the period of say ~2000 to ~2025 [1] it's really not very obvious that there's an increase in M2 from '08 onward.
Talking about M2 as a source of inflation is like shouting Red at a roulette wheel. Sure, sometimes the ball will land on Red but your shouting is a non-sequitur on the result.
For money supply to be inflationary it has to increase demand or reduce supply for a given product.
It sounds neat but there’s little evidence of that occurring on more than a temporary basis during covid. But covid also caused supply shocks.
It seems that what happened is covid showed companies what they could get away with both because of decades of consolidation and because of new ways of colluding.
This graph is absolutely insane. As I am completely unfamiliar with what is represented, would you have some pointers on where to start to understand what it represents?
I'm particularly intrigued by the very sharp rise during the covid time, when the global economy was in taters.
ok, but does the increase in money supply explain the price collusion that businesses admit to doing? You're bringing up an issue that's not pertinent to companies criming.
Increase in money supply only causes inflation if the money is spent on purchases of items with inflated prices (say, ferraris instead of basic food items).
When the basic food items become ferraris, people have no choice on that.
It appears that the crux of the article is that a lot of price fixing is going on through the use of programs that suggest or encourage pricing among a few players, to the advantage of all the players and the disadvantage of the customer.
Crackdowns do take time in the US but there is hope. See e.g.:
The current administration, however, plans to let M&A run wild. Oligopolies don’t need an app for uncoordinated price fixing. The fact that there’s a cartel that controls 97% of the frozen potato market is wild. This will only get worse without breakups.
The New Deal, which Bernie was resurrecting, was meant to break monopolies up, to promote completion and make price fixing impossible. the democrats voted against that as they are controlled by the big companies too. this is easy MAGA exists, and won.
> These companies have been hiking prices for years, but really started to turn the screws during the post-covid inflationary period
The only one I found a time series for quickly is Lamb Weston: Their margins steadily went down after 2019, then surged quite substantially, and by the end of 2024 were more or less back at their 21/22 low points [1]
Additionally there's apparently a class action suit against the companies mentioned which was filed in November 2024 [2]
I don't know enough about this market to judge whether something shady happened, but it seems like both of those facts are relevant to this article.
> Josh Saltzman, owner of the DC sports bar Ivy and Coney. Ten years ago, Saltzman charged $3 for fries; now it's $6 – and Saltzman's margins have declined. Saltzman has a limited number of suppliers, and they all get their potatoes from Big Potato, and they bundle those potato orders with their other supplies, making it effectively impossible for Saltzman to buy his potatoes from anyone else.
I understand there will be a demand for French fries from consumers, but you don’t have to serve them. This is something I appreciate about Greek cuisine. There are so many wonderful foods spawned from input constraints. Sugar was a luxury in Greece during the 20th century while honey was more readily available, so you see many desserts sweetened with honey. The Lenten and nativity fast call for essentially a vegan diet, so there are numerous recipes that don’t require animal products and are cheap to make. Eggs and lemons were readily available, so they created avgolemono soup, which is a modest, yet delicious dish.
The overall American cuisine seems unwilling to adapt. The tricky bit is, that’s probably correct from a business standpoint. I’ve heard, “If we don’t sell hamburgers at airport restaurants, they’ll fail.” from a consultant in the airport terminal industry. It’s as if we’ve grown to expect seasonal fruit and vegetables year round as a mindset for our cuisine. Surely, there’s room to be more flexible with what we eat, which would allow business owners to serve food based on what’s readily available and cheaper for them to serve.
Now if absolutely every type of food is experiencing price gouging, that’s hard to get around. But I think there’s some middle ground, which requires serving different food items.
Does anybody know whats stopping ethical and slightly less greedy companies from outcompeting these conglomerates? Its a question I keep coming back to because if the market were efficient then competitors should be able to use that same data to undercut big potato (or big whatever). This never seems to happen.
I’m just guessing, but it likely requires scale in order to become profitable. Building up the necessary network, infrastructure and logistics, while getting up to speed on all the regulatory requirements, would require a lot of difficult work. VCs also wouldn’t fund something that merely becomes profitable, without a chance of making stupid amounts of money. The number of “founders” who would want to make this their carrier is constrained by that limited prospect as well, in addition to “selling potatoes” not being very sexy. And the price-fixing cartel would try to thwart you at every step.
That's called "barrier to entry" to a market (or "un-leveling the field of play"). Actually, that's what any significant corp use first to forbid any new competitor to compete (and that's the reason of the need of "disruption", meaning changing the field of play instead of trying to level it for all players).
Examples:
- laws and regulations provide great barrier for newcomers
- brand recognition (would you better by a know cigarette brand or unknown cheapest one?)
- technical and/or financial and/or IP investment, either because the INDUSTRIAL process need costly tools (so you need to be big from the start) or because you need some really specific know-how
Monopolies. They may not all have the 100% marketshare to convince regulators they legally constitute a monopoly, but in practice one can't compete on price with vertically-integrated conglomerates that already own the lion's share of the market, and have an existing relationship with all of your potential suppliers/logistics/retailers...
>Does anybody know whats stopping ethical and slightly less greedy companies from outcompeting these conglomerates?
I like this question because it inspires the thought of an "incrementally more ethical firm". Ethics can be roughly characterized as constraints on behavior, therefore if two firms, all else equal, differ then the ethical one is naively at a natural disadvantage, having fewer degrees-of-freedom in any situation. The classic response is that cooperation between firms is itself a powerful advantage, and that ethical behavior ought to yield advantages to cooperation that outweigh the cost of behavioral restrictions.
I believe that the equation changes when ethical behavior itself is successfully attacked and associated with weakness. What happens to a bank if everyone believes it will fail? It fails. What happens when everyone believes that morality is weakness? Morality IS weakness. At that point the reputation and cooperation effects are erased, and only the loss of freedom remains. At that point the culture shifted from the "cooperate-cooperate" Nash equilibrium to the "defect-defect" one. (Religious belief tends to unequivocally favor "cooperate-cooperate" and can therefore both resist this transition and assist in the reverse transition, which adds to religion's social utility.)
Perhaps, given economies of scale, it's difficult for smaller more ethical companies to compete even with the price-fixed conglomerate product.
There are some more ethical companies, too. In N Out french fries are $2.30, certainly due to the fact that they own their supply chain and cut potatoes in house.
It's not like there's an open market you can actually just sell your frozen potato product on. The supply chain between producers and consumers is a web of vertical integration and deals between large oligopolistic companies.
If you can finangle a wedge of the market, they can just buy you, or apply local pricing pressure in lock-step based on their data broker recommendations.
I will continue to shout this at clouds and hope something changes:
As tech industry practicioners, we are some of the only people in the country who have both the desire to affect positive change, AND the agency to do so. Don't work for these companies. If your company does business with these companies, criticize it and encourage your coworkers to do the same.
ISTM this really wants legislative action more than FTC action. “Price fixing with an app” should not be something probably illegal due to complex Sherman Act arguments that result in it taking years for the government to do anything about it. It should be directly an unambiguously illegal, with strong penalties (3x damages?) for both the companies using the apps and for the companies making the apps. And enforcement should be fast: the government should be able to entirely shut down these apps via a preliminary injunction.
And yes, maybe there should also be penalties applied personally to the executives who break these rules. But that’s a can of worms and it might be unnecessary.
I think the key insight that the article misses is that when consumers interact with an app they have an excess of trust in "the app".
I run an ecommerce site. It's hard as a small retail operation to keep inventory in sync and model the complex network of supplier relationships for special-orders: we can get some products in a day, some things in a week, some in 6 months. Nonetheless customers assume that the computer is the word of God, and that if the website lets them order a product that product must be available immediately.
When you make an app to do something that is illegal, people for some reason assume it is legal (or at least less bad) to do in the app. The presence of a computer intermediary somehow cleanses the action of moral ambiguity. I think this is because most people don't understand how computers work, and they assume that "the computer is always right".
This goes as far back as Babbage:
On two occasions I have been asked, 'Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question
The food companies accused of gouging are mostly publicly traded corporations that publish their finances...if profit margins shot up we would be able to see it, but everyone who does the analysis finds margins are mostly steady, slightly down overall. Yet the bullshit claim persists.
Here are some better explanations:
- the "breadbasket of the world" (Ukraine) is at war
- wages are up in the agricultural sector (a good thing overall but it's not free)
- egg shortage
- years of government deficits have massively increased the money supply...(more money chasing the same economic output)
I can't say I buy this argument? I think for some of the cases (like Uber?) it might be correct, but are they sure there isn't another force at play in a lot of other cases?
I recall reading that with apartment rentals in NYC, the problem was (is?) apparently that there are literally contracts in place preventing landlords from deviating from the recommendation. That's the crux of the problem, not the app recommendation itself.
Are we sure the causes in these cases aren't analogously different? For example, the part about 97% of a market being controlled by one company sounds like a monopolization issue rather than anything to do with an app.
More like "not a crime if a cartel of corporations does it" - not so sure it has much to do with an "app".
Useful analysis of consolidation and resulting price increases due to "inflation", even if the title could use re-wording.
Interesting that -- especially in an election cycle -- the government is blamed for "inflation", whereas a large contributing factor -- and the main one in this case -- are companies which control a market segment leveraging opportunities (COVID supply chain breakdowns, etc.) to increase their profits at the expense of the Average Joe.
We recently had to do a shower remodel. The salesperson told us that the price was 50% higher now than it was pre-pandemic. Prices shot up during the pandemic due to the known supply chain issues, but never went back down even after those supply chain issues are resolved.
Another good example of this are road bikes (I'm a cyclist): You could get a nice carbon bike for $2500 before the pandemic. Now it's $5000 for essentially the same thing. This is not explained by supply chain issues or an increase in the money supply.
> These companies have been hiking prices for years, but really started to turn the screws during the post-covid inflationary period. One of Schwenk's sources is Josh Saltzman, owner of the DC sports bar Ivy and Coney. Ten years ago, Saltzman charged $3 for fries; now it's $6 – and Saltzman's margins have declined. Saltzman has a limited number of suppliers, and they all get their potatoes from Big Potato, and they bundle those potato orders with their other supplies, making it effectively impossible for Saltzman to buy his potatoes from anyone else.
I've had the same opinion for a while now. Something has malfunctioned with the market economy if jacking up prices does not bring in competition that can do it for less.
The central message of this article is that huge companies are bad because they make large profits.
But there are many countries were companies cannot grow huge because the underlying economy is small and not part of a large trading block. (Georgia, where I'm currently living, is a good example).
People are worse off in these countries: Wages are lower in dollar terms. Locally produced products are of poorer quality and cost more.
So, although huge companies make big profits, their economies of scale do benefit their customers and staff.
I was recently looking into my family history, and doing some research on my great grandfather's rural grocery store in 1930's Kansas. I found an old newspaper ad from the time where the four local stores were excited to offer a weekly sales program where each one would put a product on sale every week, and the other three would agree not to compete on that product. "Huh, that's an interesting gimmick... wait, wait, WHAT? How was that legal?"
Lately I have been trying to propagate type ideas:
(1) corporations are not people. They are groups of people acting in concert under the direction of a small number of, or even one, person. They get legal immunities that individuals and unincorporated companies don’t. It is bat shit crazy to legally treat them as people for the purpose of “rights”. They don’t have morals (literally corporations are amoral entities). They concentrate power. We should be limiting them; not doling out rights to them.
(2) the best way to limit corporate power is to make it undesirable to centralize too much corporate power. I think that corporations should have a tax rate base on power - eg increasing based on revenue and number of employees and market share. The rates should increase with increases in any of these numbers. If done correctly, it would eliminate the need for antitrust and much oversight as it naturally deters centralization. Lots of details like shell corporations controlling other corporations, etc, but do-able.
Interesting that if people took their health more seriously, the food companies mentioned here would struggle to survive regardless of pricing power. Total addressable market would plummet. I suppose one way to accept the status quo is that these companies are self levying a vice tax.
Well, it used to be a crime to offer a communication service without government explicit approval.
But an app like Skype made it possible for people to communicate for free. Was it bad? Do we need government to define what kind of business people can conduct?
[+] [-] constantcrying|1 year ago|reply
Then, there is a switch to the most traditional of businesses with the most traditional business models. Who, the author argues, are engaging in price gauging. In the second paragraph he claims that apps cause this inflation ("so much of inflation can be attributed to a crime, done with an app"), then goes on to list a couple of traditional companies who are, he argues rising prices above inflation. And who he partially blames for inflation.
None of the examples he gives support the case he is trying to make in his title. Apparently being an "App" has absolutely zero to do with getting away with financial misdeeds.
None of the questions raised by the title are even investigated. And the core argument, that traditional companies are causing inflation, is never argued for. The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone. The source of the inflation being gone does not cause inflation to reverse. And so the fair market price would not get lower, getting something so basic wrong seems ridiculous for someone leveling serious accusations at companies.
[+] [-] adminu|1 year ago|reply
He is saying that the traditional businesses use an app that allows for a legal way of price gauging.
> The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone.
The author claims, that these companies raise prices more than inflation based cost increases in production would allow for.
[+] [-] Arainach|1 year ago|reply
[+] [-] bschne|1 year ago|reply
[+] [-] elicksaur|1 year ago|reply
[+] [-] 1vuio0pswjnm7|1 year ago|reply
More on Potatotrac:
https://fingfx.thomsonreuters.com/gfx/legaldocs/byprmmxmwve/...
https://ia800109.us.archive.org/34/items/gov.uscourts.ilnd.4...
[+] [-] refulgentis|1 year ago|reply
There's a lot of other stuff that is unclear (questions in the title? the article says inflation goes in reverse?), but that one thing neatly explains the vibe that might have driven the rest.
[+] [-] FrustratedMonky|1 year ago|reply
Traditional rental property corporations, were pre-existing, and also adopted the use of an 'app' that allowed them to raise prices over the inflation rate.
So, traditional corps, taking advantage of the new 'app-crime-for-free' model.
But really, where the logic broke down a little. Was all those 'crime-apps' are actually reducing prices for most part. So should help inflation not hurt it.
[+] [-] qwerty_clicks|1 year ago|reply
[+] [-] ogleopoly|1 year ago|reply
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[+] [-] yieldcrv|1 year ago|reply
[+] [-] gmueckl|1 year ago|reply
If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently. Let them go through a cumbersome govenment approval process for price changes or something to cap margins. Price fixing cartels need to be busted more aggressively.
[+] [-] Aurornis|1 year ago|reply
The fallacy is assuming that the government will make everything cheap for consumers.
In practice, government regulation of prices just changes the game. Look at any market with rent control: There are numerous meta-games around building or not building new supply, landlords are incentivized to not fix units because they know tenants don’t want to give up their rent control and move, and a new market emerges where people illegally sublet their rent controlled apartments because it becomes attractive to take advantage of the market demand that landlords aren’t allowed to capitalize on.
The other fallacy in all of this is thinking that companies control both supply and demand. For nearly all commodities, there is a price where consumers won’t pay for it. If rents get too high, people move to a different city. If gas gets too expensive they start carpooling and looking for WFH jobs. If eggs are too expensive they eat something else. These choices make people angry as hell, but there’s no denying that these choices exist. Companies can’t push past these limits and force people to buy at any price. They still have to discover that point on the supply and demand curve.
[+] [-] ajmurmann|1 year ago|reply
All companies are greedy. That's the reason for existence. Your point that monopolies and oligopolies need to be crushed is very valid though. I wish more mergers were rejected in the first place.
Regulating prices is a recipe for disaster though.
[+] [-] olalonde|1 year ago|reply
What is that natural end state? Natural monopolies are exceedingly rare, almost all monopolies are the result of government intervention.
[+] [-] vtashkov|1 year ago|reply
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[+] [-] stickfigure|1 year ago|reply
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[+] [-] wyager|1 year ago|reply
Which is what, exactly? The US is per capita richer than almost all EU countries by a huge margin (with a few small exceptions mostly enabled by regulatory arbitrage targeting US money), so forgive me if I don't take your seething commentary about the US economic apparatus very seriously.
[+] [-] greyface-|1 year ago|reply
> Inflation has lots of causes, it's true.
https://fred.stlouisfed.org/series/M2SL
Algorithmic price fixing is certainly a not-insignificant part of the issue. But it's strange to see zero acknowledgement of the massive increase in money supply over the same time period. When doing causal analysis, we need to examine both the private sector and our government.
When you use M2 as denominator for egg prices, we're at the same place we were in early 2016: https://fred.stlouisfed.org/graph/?g=1DcVw
[+] [-] lesuorac|1 year ago|reply
Because when you look at inflation in the period of say ~2000 to ~2025 [1] it's really not very obvious that there's an increase in M2 from '08 onward.
Talking about M2 as a source of inflation is like shouting Red at a roulette wheel. Sure, sometimes the ball will land on Red but your shouting is a non-sequitur on the result.
[1]: https://fred.stlouisfed.org/series/CPALTT01USM657N
[+] [-] dd36|1 year ago|reply
It sounds neat but there’s little evidence of that occurring on more than a temporary basis during covid. But covid also caused supply shocks.
It seems that what happened is covid showed companies what they could get away with both because of decades of consolidation and because of new ways of colluding.
[+] [-] fransje26|1 year ago|reply
This graph is absolutely insane. As I am completely unfamiliar with what is represented, would you have some pointers on where to start to understand what it represents?
I'm particularly intrigued by the very sharp rise during the covid time, when the global economy was in taters.
[+] [-] miltonlost|1 year ago|reply
[+] [-] cluckindan|1 year ago|reply
When the basic food items become ferraris, people have no choice on that.
[+] [-] djoldman|1 year ago|reply
Crackdowns do take time in the US but there is hope. See e.g.:
https://www.justice.gov/opa/pr/justice-department-sues-realp...
[+] [-] fny|1 year ago|reply
[+] [-] sega_sai|1 year ago|reply
[+] [-] cpill|1 year ago|reply
[+] [-] bschne|1 year ago|reply
The only one I found a time series for quickly is Lamb Weston: Their margins steadily went down after 2019, then surged quite substantially, and by the end of 2024 were more or less back at their 21/22 low points [1]
Additionally there's apparently a class action suit against the companies mentioned which was filed in November 2024 [2]
I don't know enough about this market to judge whether something shady happened, but it seems like both of those facts are relevant to this article.
1. https://www.macrotrends.net/stocks/charts/LW/lamb-weston/pro...
2. https://www.hbsslaw.com/cases/frozen-potato-products-antitru...
[+] [-] sotix|1 year ago|reply
I understand there will be a demand for French fries from consumers, but you don’t have to serve them. This is something I appreciate about Greek cuisine. There are so many wonderful foods spawned from input constraints. Sugar was a luxury in Greece during the 20th century while honey was more readily available, so you see many desserts sweetened with honey. The Lenten and nativity fast call for essentially a vegan diet, so there are numerous recipes that don’t require animal products and are cheap to make. Eggs and lemons were readily available, so they created avgolemono soup, which is a modest, yet delicious dish.
The overall American cuisine seems unwilling to adapt. The tricky bit is, that’s probably correct from a business standpoint. I’ve heard, “If we don’t sell hamburgers at airport restaurants, they’ll fail.” from a consultant in the airport terminal industry. It’s as if we’ve grown to expect seasonal fruit and vegetables year round as a mindset for our cuisine. Surely, there’s room to be more flexible with what we eat, which would allow business owners to serve food based on what’s readily available and cheaper for them to serve.
Now if absolutely every type of food is experiencing price gouging, that’s hard to get around. But I think there’s some middle ground, which requires serving different food items.
[+] [-] Eextra953|1 year ago|reply
[+] [-] layer8|1 year ago|reply
[+] [-] olivierduval|1 year ago|reply
Examples:
- laws and regulations provide great barrier for newcomers
- brand recognition (would you better by a know cigarette brand or unknown cheapest one?)
- technical and/or financial and/or IP investment, either because the INDUSTRIAL process need costly tools (so you need to be big from the start) or because you need some really specific know-how
- ...
[+] [-] swiftcoder|1 year ago|reply
[+] [-] simpaticoder|1 year ago|reply
I like this question because it inspires the thought of an "incrementally more ethical firm". Ethics can be roughly characterized as constraints on behavior, therefore if two firms, all else equal, differ then the ethical one is naively at a natural disadvantage, having fewer degrees-of-freedom in any situation. The classic response is that cooperation between firms is itself a powerful advantage, and that ethical behavior ought to yield advantages to cooperation that outweigh the cost of behavioral restrictions.
I believe that the equation changes when ethical behavior itself is successfully attacked and associated with weakness. What happens to a bank if everyone believes it will fail? It fails. What happens when everyone believes that morality is weakness? Morality IS weakness. At that point the reputation and cooperation effects are erased, and only the loss of freedom remains. At that point the culture shifted from the "cooperate-cooperate" Nash equilibrium to the "defect-defect" one. (Religious belief tends to unequivocally favor "cooperate-cooperate" and can therefore both resist this transition and assist in the reverse transition, which adds to religion's social utility.)
[+] [-] pants2|1 year ago|reply
There are some more ethical companies, too. In N Out french fries are $2.30, certainly due to the fact that they own their supply chain and cut potatoes in house.
[+] [-] shkkmo|1 year ago|reply
If you can finangle a wedge of the market, they can just buy you, or apply local pricing pressure in lock-step based on their data broker recommendations.
[+] [-] ryukoposting|1 year ago|reply
As tech industry practicioners, we are some of the only people in the country who have both the desire to affect positive change, AND the agency to do so. Don't work for these companies. If your company does business with these companies, criticize it and encourage your coworkers to do the same.
[+] [-] amluto|1 year ago|reply
And yes, maybe there should also be penalties applied personally to the executives who break these rules. But that’s a can of worms and it might be unnecessary.
[+] [-] bdndndndbve|1 year ago|reply
I run an ecommerce site. It's hard as a small retail operation to keep inventory in sync and model the complex network of supplier relationships for special-orders: we can get some products in a day, some things in a week, some in 6 months. Nonetheless customers assume that the computer is the word of God, and that if the website lets them order a product that product must be available immediately.
When you make an app to do something that is illegal, people for some reason assume it is legal (or at least less bad) to do in the app. The presence of a computer intermediary somehow cleanses the action of moral ambiguity. I think this is because most people don't understand how computers work, and they assume that "the computer is always right".
This goes as far back as Babbage:
On two occasions I have been asked, 'Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question
[+] [-] missinglugnut|1 year ago|reply
Here are some better explanations: - the "breadbasket of the world" (Ukraine) is at war - wages are up in the agricultural sector (a good thing overall but it's not free) - egg shortage - years of government deficits have massively increased the money supply...(more money chasing the same economic output)
[+] [-] dataflow|1 year ago|reply
I recall reading that with apartment rentals in NYC, the problem was (is?) apparently that there are literally contracts in place preventing landlords from deviating from the recommendation. That's the crux of the problem, not the app recommendation itself.
Are we sure the causes in these cases aren't analogously different? For example, the part about 97% of a market being controlled by one company sounds like a monopolization issue rather than anything to do with an app.
[+] [-] insane_dreamer|1 year ago|reply
Useful analysis of consolidation and resulting price increases due to "inflation", even if the title could use re-wording.
Interesting that -- especially in an election cycle -- the government is blamed for "inflation", whereas a large contributing factor -- and the main one in this case -- are companies which control a market segment leveraging opportunities (COVID supply chain breakdowns, etc.) to increase their profits at the expense of the Average Joe.
We recently had to do a shower remodel. The salesperson told us that the price was 50% higher now than it was pre-pandemic. Prices shot up during the pandemic due to the known supply chain issues, but never went back down even after those supply chain issues are resolved.
Another good example of this are road bikes (I'm a cyclist): You could get a nice carbon bike for $2500 before the pandemic. Now it's $5000 for essentially the same thing. This is not explained by supply chain issues or an increase in the money supply.
[+] [-] jpswade|1 year ago|reply
[+] [-] locallost|1 year ago|reply
I've had the same opinion for a while now. Something has malfunctioned with the market economy if jacking up prices does not bring in competition that can do it for less.
[+] [-] nroets|1 year ago|reply
But there are many countries were companies cannot grow huge because the underlying economy is small and not part of a large trading block. (Georgia, where I'm currently living, is a good example).
People are worse off in these countries: Wages are lower in dollar terms. Locally produced products are of poorer quality and cost more.
So, although huge companies make big profits, their economies of scale do benefit their customers and staff.
[+] [-] technothrasher|1 year ago|reply
[+] [-] efitz|1 year ago|reply
(1) corporations are not people. They are groups of people acting in concert under the direction of a small number of, or even one, person. They get legal immunities that individuals and unincorporated companies don’t. It is bat shit crazy to legally treat them as people for the purpose of “rights”. They don’t have morals (literally corporations are amoral entities). They concentrate power. We should be limiting them; not doling out rights to them.
(2) the best way to limit corporate power is to make it undesirable to centralize too much corporate power. I think that corporations should have a tax rate base on power - eg increasing based on revenue and number of employees and market share. The rates should increase with increases in any of these numbers. If done correctly, it would eliminate the need for antitrust and much oversight as it naturally deters centralization. Lots of details like shell corporations controlling other corporations, etc, but do-able.
[+] [-] johnrob|1 year ago|reply
[+] [-] killerstorm|1 year ago|reply
But an app like Skype made it possible for people to communicate for free. Was it bad? Do we need government to define what kind of business people can conduct?