Via Ars Technica, “AOL raising dial-up prices to spur broadband“:
“You’ve got a price increase! AOL is planning to raise rates on its dial-up users in order to spur the transition to its re-branded DSL offerings.”
This strikes me as neither surprising nor as a very smart move. The fact that AOL, which is not a monopoly, and has made some really horrible business decisions, is making an intentional choice to screw customers on dial-up pricing. This is not behaviour one would expect from a market that encouraged competition to spur prices to be lowered. Another example of how the market does not behave in the way that advocates of free market want to believe it does.
In fact, prices are part of an over all mission to shape comsumer behaviour, and that means that consumers are given information filtered and packaged through marketing plans. Advocates of the free market like to pretend that consumers will be able to make choices that maximize their own self interest in the marketplace, but fail to recognize the nature of the market as a space where information is neither free nor is it perfect.
Information shaping is a billion dollar industry, and that means that individuals are at a serious disadvantage when it comes to having anything other than the mere illusion of perfect information about the best choices they have available. Further, the history of the market shows that even with information about better choices, consumers tend to stick with the products with which they are familiar even when something better is available. This is why consumers stuck with providers like AOL for so long, even when their support for the Internet was reluctant and still aimed at maintaining proprietary control as a gatekeeper. This tendancy of the consumer to stick with the familiar is also something that has been noted in the way that people have stuck with Microsoft products in spite of bugs and viruses features and opportunities for 3rd party developers.
Vendors are not blind to the way that pricing can be used to manipulate. There’s a reason that prices end in .99 instead of .00 so often, after all. Also, vendors know very well that if prices are too low, consumers will assume the product is cheaply made and refuse to buy.
Also, I recall the case where different catalogs, with different prices were being sent to consumers by a single vendor. The pricing was set based on information that the vendor had gathered about the consumer. Also, let us not ignore the fact that a huge percentage of what passes for news and entertainment is actually marketing, or derived almost verbatim from press releases. That certainly cannot mean unbiased and unfiltered information, even though it specifically is masked as being such.
So, not only are prices not going to be lowered by the vendors in a free market, but also, consumers participate in their own fleecing. I doubt that any of this is unrecognized by advocates of the free market, so I cannot help but wonder if there’s another agenda behind their advocacy.
The hidden part of the pricing mechanism is privilege. Privilege and class have a great deal to do with what prices one pays in the market, even now. The free market, one with no protections for anyone, would be an absolutely heinous playground for prejudice and manipulation.
A “free” market is no such thing. It would be expensive, unjust, unequal and the only people that would ultimately benefit are those that already have inordinate power and wealth. It’s important to remember that the protections in place as now, which are by no means absolute, are in response to problems that the market was unable to address, problems that, I suspect, are inherent in the marketplace metaphor.
Things like customer service and being treated well are luxuries in a marketplace that is trying to be efficient. Anything that interferes with the flow of money from the consumer to the vendor is a market inefficiency. That means anything less than a hard sell without any service or courtesy is inefficient, to the market. In a “free” market, these luxuries would be even more quickly sequestered away from even the above average consumer to an ever increasingly rarified demographic.
The only freedom in a “free” market is an anarchy of unfettered, frictionless power and privilege. That may not bother those that are already able to exert their ever increasing power in the market, or those that think it is in their best interest to support the regime of hegemony. However, it should be something that sends chills along the spine of anyone with a conscience or a believer in the attempt to acheive equality and justice.
And, this does not even start to talk about what would happen in a “free” market to the environment or long term stability and sustainability. Externalizing machines would be the accelerating death of health and safety, not to mention everything previously mentioned.
For a greater quality of life for everyone, there must be controls on the market, but it should be clear that even that is not enough because of the overwhelming power of pursuasion to shape and occult information in the market. In order for a market to be free, it is not enough for the vendors to be unfettered, but the consumers must have freedom as well. The only way for the both the vendors and consumers to be free in a market is for there to be protections against the natural tendency of power to distort and infuence the market, therefore a free market paradoxically requires conditions and controls.