What's gone wrong with free-market capitalism?

Inspired from the Airport Rage! thread, got me thinking about what has gone wrong with the free-market economic model? I mean, is free enterprise and competition supposed to breed better service/product to the customer or what? It’s not generally what I experience when travelling, trying to get through to customer service, renting property etc etc…

Thoughts?

Inspired from the Airport Rage! thread, got me thinking about what has gone wrong with the free-market economic model? I mean, is free enterprise and competition supposed to breed better service/product to the customer or what? It’s not generally what I experience when travelling, trying to get through to customer service, renting property etc etc…

What have airports got to do with the free-market?

I mean, is free enterprise and competition supposed to breed better service/product to the customer or what?

free market enterprise is about trying to eliminate competition – it tends towards monopoly.

free market will result in the highest prices for the lowest costs possible, to maximise profits for shareholders.
i could be wrong like.

What’s wrong with free market capitalism? The fact that is an inherently flawed model.

What have airports got to do with the free-market?

Yeah, I didn’t really think it through before I typed :).

free market will result in the highest prices for the lowest costs possible, to maximise profits for shareholders.

This

Capitalism has created the aircraft and airport infrastructure model we now enjoy. If it weren’t for the need to make profit then every town and city would have an airport with a schedule that flew frequently to every corner of the world daily. And every plane would be Concorde. Unfortunately due to the need for airlines and airports to have to make money we all get funnelled into huge airports onto ever growing aircraft with ever shrinking seats.

Last time I flew through Manchester airport there were plenty of trolleys left around so I didn’t need to pay.

Capitalism is all focussed on making a profit for shareholders. If you play fair, one of the best ways to make a profit is to have good product that people are prepared to pay for. If you cheat, you can make a profit by ripping off your customers. There used to be a code of honour, followed by most (there were also some rouges) but the level of incentivisation to individuals, and the level of greed, has more or less wiped it out. So the norm is to rip off the customet if you can.

This is the root cause of the problems whenever a profession gets commodetised – the individuals doing the job try to do it right, but those who cheat have an advantage with regard to promotion – so most of the management (there are still some good guys) have a different agenda to most of the staff.

Just my take on it!

Ultimately capitalism = slavery and environmental disaster.

Capitalism has created the aircraft and airport infrastructure model we now enjoy.

From an airport perspective, I think you’ll find it was the taxpayer, in this country and most others.

It’s a captive market, often with huge PFI debts, so the consumer gets humped.

Very simply, in neo classical model free markets need specific circustances to work. For example lots of choice of seller, lots of buyers, perfect infortmation on prices, free exchange and no interference from govt or authorities other to to enforce property and contract law. In practice this is very difficult to achieve and you get market failures. Home energy anybody?

The question is whether it is better to try a shoehorn some market into everything to try and get some of the benefits or whether a half arsed market is worse that some sort of central or local planning Pretty much all western govts subscribe to the former and rolling back the state to “free up markets” is very much in vogue, to suggest otherwise is heterodoxy in economic and political terms. Btw I embrace the heterodox!

This is all a hopeless over simplification

Interested in more, google post autistic economics… (I don’t like the use of autistic in this sense, but the points they make are interesting)

If you actually look into it planes like the Boeing 707 were based on a US military requirement for a SAC transport, and their design fundamentally affected by the cancelled proposals for the Vickers V1000 / VC7 itself a military transport intended to support the V-bomber fleet.
So modern commercial flying started out by having very little to do with free market capitalism but in military requirements paid for by governments.
Anyway, we’re all about to find out soon how unfettered free-markets actually increase costs, partly because of the enormous bureaucracy required in the public sector to check and enforce the delivery of the private sector providers.

Air travel is cheap, what do you expect?

Unless of course you go 1st class, then its much nicer.

Service and quality are price dependant.

Capitalism isnt all about huge companies and shareholders… plenty of small businesses out there capitalising on one thing or another.

The problem is that governments interfere with the market and this stops it working perfectly. If they just left Michael O’Leary alone it would be brilliant

The taxpayer created the early airports but capitalism has prevented more from being built and making air travel more convenient for us. Convenience is expensive and it’s an expense we’re not wiling to pay for. So we’re stuck with the hub and spoke model rather than the point to point.

Gene Roddenberry seemed to me to have the right idea when he imagined a world without money or commerce based on human achievement. Can’t see that happening any time soon.

hold on what we need is a war we would have loads then just like last time 💡

We’d need to try it first to find that out…

… btw free marketeers would argue that air travel market does work – at least the flying bits to relatively popular destinations. People want cheap more than they want comfort – that is why budget airlines are so successful.

Woppit iirc it led to dark satanic mills and some unhappy plebs- they wanted rights ,education , healthcare , holidays and benefits the bastards ruing it for us all.
I blame the unions for ruining the glorious dream

Free market capitalisam requires expanding resources and expanding markets inorder to generate profit and widespread wealth. Now that the capitalist model has expanded to cover the globe it has no new resource or market so in order to continue to generate profit it has to consume the wealth of the nation states and the majority of citizens . Which is why we have transnational companies which pay low wages and no taxes but depend on government contracts and/or taxpayer support for their employees . The system is now eating itself .

Free market capitalisam requires expanding resources and expanding markets inorder to generate profit and widespread wealth. Now that the capitalist model has expanded to cover the globe it has no new resource or market so in order to continue to generate profit it has to consume the wealth of the nation states and the majority of citizens . Which is why we have transnational companies which pay low wages and no taxes but depend on government contracts and/or taxpayer support for their employees . The system is now eating itself .

Very interesting this. I was reading a book on a similar topic recently, about continual economic growth on a finite planet.

Don’t know where some of you got the idea that capitalism restricted the number if airports, I think you’ll find that’s down to planners, politicians and land owners. There are many regional airports with loads of spare capacity, the airlines (or possibly the passengers) don’t want to fly from them. Our current airport / carrier system was the product of national carriers, governments willy waving and protectionist regulations. The freeing up of the airline industry has resulted in significantly lowers fares although service levels aren’t great but you don’t have the fly Ryan Air if you don’t want to, you have a choice……

Aircraft are expensive assets and airlines won’t buy unless they can fill them. So they prefer to base themselves at one hub and purchase fewer larger aircraft and fill them. The low cost carriers work off a different model, airports that host them make no money off them at all and rely on passengers buying stuff in the airport terminal. Who’s going to build a new airport on that basis? Not exactly a good business case. That’s why expanding Heathrow is the only realistic and viable option compared with Boris Island and sharing the expansion across other London airports even though they have spare capacity. Unfortunately.

Any London MP that votes for the expansion of Heathrow will never be re-elected.

Now that the capitalist model has expanded to cover the globe it has no new resource or market

Not so…. a great many emerging and future markets out there.

Allmountainadventure name two and what are they worth per head of the population of the “developed world.”

I was waiting for some tosser to recommend “more, better capitalism” and blame all the excesses of capitalism on the governments that aren’t able to rein it in- because obviously those companies making all the attempts to endrun, avoid, evade and defraud national governments would act responsibly if there were no restrictions.. But I see Junkyard’s already done it sarcastically, ruining it all. ****.

What’s gone wrong with free-market capitalism?

all that’s gone wrong is that the people making most of the money now are the communists

Not so…. a great many emerging and future markets out there.

That old chestnut. Look around you, everything you see will come from mining, oil and forestry. None of which are sustainable to western standards without increasing environmental destruction.

http://www.theatlantic.com/business/archive/2013/02/how-airline-ticket-prices-fell-50-in-30-years-and-why-nobody-noticed/273506/

What’s gone wrong is the capitalists have forgotten the bit about not muzzling the ox while it is treading out the grain.

…and IT being the tail that wagged the dog.

Capitalism is fine, it’s when you remove the risk that there is a problem.
By removing the risk I mean bailing out banks, building energy production Facilites for energy providers and cheap train lines & maintenance for train companies to use.
Of course I don’t have a degree in finance but that’s my take, fair play if you get rich providing a service, but make sure there is a level playing field and that failure is not rewarded.

Capitalism is fine, it’s when you remove the risk that there is a problem.
By removing the risk I mean bailing out banks, building energy production Facilites for energy providers and cheap train lines & maintenance for train companies to use.
Of course I don’t have a degree in finance but that’s my take, fair play if you get rich providing a service, but make sure there is a level playing field and that failure is not rewarded.

If you cheat, you can make a profit by ripping off your customers.

Or your staff.

In the drive to reduce costs and increase profitability, companies screw their employees wherever they can. This results in almost everyone being just above the misery threshold in their jobs. Doesn’t make for a happy society!

Stewart, I think the fact you don’t have a degree in finance or economics makes you more qualified to comment, not less. It’s obvious to me now that the so called finance and economics experts out there don’t have a clue how the system works themselves – the global economic collapse was just as much of a surprise to them and they didn’t know how to fix it once it happened. It would probably all run just as well if we put Hamsters in charge.

The fundamental problem with free market capitalism is the same old problem that has blighted humankind since day one – greed and power. As soon as you give someone power they get greedy and they want to protect the power they have, and the worldwide finance and banking system has become too greedy and powerful. There is no Ying to the Yang. Free market capitalism should have a natural balancing effect and give everyone a fair chance, but clearly it doesn’t.

Capitalism has created the aircraft and airport infrastructure model we now enjoy.

Nonsense. Nonsense and pish.

The planes were for sure. Airports possibly not in the UK as a lot were old air fields from WW2.

Free market capitalism has been great for reducing air fairs and improving choice of destination.

I was reading a book on a similar topic recently, about continual economic growth on a finite planet.

Unfettered growth on a planet with fixed resources is simply not possible. There is some very thought-provoking work on zero growth as long as you don’t just think ‘hippies’ when reading it. Sensible people live within their own resources at home don’t they?