Brown Sludge

Spilt Milk

December 21st, 2005

Professor Walter Williams (a conservative) has posted this fascinating piece on how big corporations and unscrupulous sellers gang up on consumers - and using the Dairy Industry as an example - speaks about the phenomenon of “narrowly dispersed large benefits versus widely dispersed small costs” - which means basically - that companies who are spending millions to buy politicians and legislation to achieve “legal” price-fixing - are counting on the fact that it’s cheaper for us as consumers just to pay the extra cost they are gouging us for - than it is for us to organize and stop the gouging.

For once it’s great to see a keen conservative mind pointing this out - and not throwing their body in front of some greed-grab corporate mucky-muck in the knee-jerk name of a “free market”.

I do find it very interesting that out of one side of his mouth he hints that Big Oil shouldn’t be taken to task for gouging - and then later out of the other side of his mouth he lumps them in with all the others that are lobbying for “statutory minimum prices”. Very telling.

A sample :

There are hundreds of statutory minimum prices, including gasoline in some states. There are numerous agricultural import restrictions and production quotas. All of these government-sanction market manipulations represent seller collusions against consumers. You say, “Williams, how can that be? The Sherman Antitrust Act gives the U.S. Justice Department and the Federal Trade Commission the power to prosecute and levy fines or imprisonment for price-fixing.” You’re absolutely right. Price-fixing is illegal, and you will face fines or imprisonment, but with one caveat: unless you get permission from congress or your state legislator. If you get permission, price-fixing becomes legal and it’s non-price-fixing that’s illegal.

The whole piece is a real eye-opener.

Brown Sludge… Milk?

Entry Filed under: General