Dat inequality

[CoccoBill]

Take fictional tire manufacturer Tirez Are Us for example

I understand all this, as I've said the advantages of free competition for efficiency are clear, it's not this I'm concerned about. Also I'm not convinced that public sector operations unavoidably lead to inefficiency and corruption. Unchecked they often do (as I think private sector does in a similar fashion) as is evident.

Even if some tyrannical mega-corporation merged with Tirez and dominated every aspect of the tire economy, from rubber extraction, to manufacturing, to distribution, and the entire automobile economy to boot, they still would face market pressure not to rip people off. This is because of substitution. People have other means to travel. There are other materials that tires could be made from than rubber. Consumers have the capacity to substitute a nearly infinite amount of products for products less available, and this makes it literally impossible for such corruption and fraud to run rampant in the private sector. It is only through state-sanctioned means that companies have any power to run amok in this way.

Let's assume this is the case. Still one clear issue would be time. For industries that require mass investments, research and infrastructure, what is preventing it from taking a lifetime (to slightly exaggerate) before competition can challenge them and the market can adjust? What I mean is that I'm not sure the market is quite as simple as that, and no external factors can hinder or downright block the market from working (yes yes, government regulations and incentives, but other than those). It is clear that individuals will use every trick in the book to try to circumvent that in order to maximize profits, which is the main goal for almost everyone. The scientific method may be a good comparison: the peer review mechanism will drag the consensus kicking and screaming to the right direction, but it may take years or decades for it to do so.

Well aside from competition, if people value the peace of mind that comes from such a service, it isn't as if watchdogs are incapable of emerging in a free market.

For sure, but herein again lies what I feel is a very significant contradiction, the main goal of these services isn't to ensure whatever they are meant to safeguard, but to make a profit. Yet again I'm not convinced, that while competition undoubtedly will have the unintended effect of pushing them to the direction of producing a more cost-efficient service, from a consumer's lifespan perspective they may get caught in a perpetual cycle of just services with improved marketing, branding and cutthroat tactics. A good marketing campaign is way cheaper than research. Of course this is a polarized view but so I think is a corrupt and inefficient government.

The simplest examples of these are websites like yelp and tripadvisor, but those examples are kind of superficial and not likely to satisfy the more left-minded people. A somewhat better example is the Better Business Bureau.

The effectiveness of the BBB in preventing unethical business practices notwithstanding, this is at the very least proof that business are willing to pay to be be policed, and by extension, their customers are willing to pay for the privilege of knowing whether a business meets a stated list of minimal standards.

For certain things, tripadvisor being a great example, I think a private sector solution is the only valid option, but when it comes to safety and health, I would personally leave it to the government.

And I can definitely see companies self-regulating, such as getting ISO-certified and what not, where ever they see a business case for it. But that's also my worry, there needs to be the business case, it's not an inherent want to provide the best possible service.

This model could very easily extend to a forthcoming private corporation that fills the role of currently state-run departments of health inspection. Provided that customers who eat at restaurants or buy from grocery stores value knowing whether said businesses are on the up and up, those businesses will pay a company to do random health inspections and keep an up to date health score. As such inspection services would exist in a private context of ever-present competition, they would be similarly forced to provide an effective service. Eventually, businesses would highly value the seal of approval that comes from a prestigiously pre-eminent inspection company, and would be foolish not to seek one. Needless to say, this would all come at a decreased cost to the bureaucratic state-based alternative that has much fewer incentives to increase the quality or reduce the cost of its work to the consumer.

Let's hope you're right, since this is the likely direction with continual government cutbacks.

Thanks for your responses (wuf also), while I'm not converted I got some fresh perspectives to consider.

[Renton]

the main goal of these services isn't to ensure whatever they are meant to safeguard, but to make a profit.

I can see that plainly you are attempting to gracefully bow out of the debate so I'll try not to open pandora's box again, but you need to objectively evaluate your anti-profit bias. It's an irrational way to argue against capitalism. I liken it to evolution vs creation debates when the creationist says "because Jesus Christ said...." There are plenty of rational arguments against capitalism, that it doesn't internalize costs, that it has trouble providing social services that are susceptible to free riders, that it doesn't allow large infrastructure projects to be built when necessary. There are strong pro-capitalist answers to argue against each of those, but they are still decent pro-state arguments. The fear that corporations will run amok in pursuit of short term profits at any cost to society is not a sound argument though.