Market Competition
Capitalism, at least as Western countries practise it, it a funny thing. Consumers and businesses have very different ideas about what makes a good Capitalist market. Sadly for consumers, it is the businesses who get to make the rules that govern them and the resulting legislation easily reflects this.
Take a recent article in the Fredericton Daily Gleaner about retailers complaining about Costco selling gas "too cheap". There is a rule that needs to apply far more often than it currently does: the good of the many outweighs the good of the few. In a market working for consumers, Costco's cheaper gas would force this rule to apply: other retailers would be pressured to reduce their own prices and either they will change things to remain profitable, fail to profit from the sale of fuel or discontinue fuel sales. No one wants to go out of business, so the pressure would be on distributors to lower prices. Eventually, and it would take a while, gas prices would lower and stablize at a point where profits would be lower but so would the cost to consumers. This could also lead to indirectly lowering prices of other goods, since the cost of fuel used to transport goods is lower. Although the idea of reducing profits is contrary to the structure of a business, and although jobs would certainly be lost, the detrimental effects on the relatively few people should be considered outweighed by the benefit to the vast majority of people; most especially those who fall into the lower income bracket who would most benefit from lower prices.
On the other side are the retailers. Retailers, like any business, loathe any reduction in their profits and fight to keep profits rising. As demonstrated on a fairly regular basis, businesses consider any reduction or stagnation of profits to be a near-catastrophic event and react accordingly. Granted, in the specific case of the New Brunswick minimum wage increase there are better alternatives, but businesses have restricted themselves to whining about lost profits and have yet to push for more effective alternatives to dealing with poverty. When taken in the context of how businesses operate on a daily basis however, it becomes clear that businesses do not actually support or even want a Capitalist open market.
Ideally, for consumers, products would be brought to market at a given reasonable price point. Other competitors could bring similar products, or even the same product, at a price point they feel to be appropriate. Businesses would be forced to adjust at least one of pricing or quality to attract customers. As Apple has demonstrated many times, this adjustment does not necessarily need to result in a price reduction; Apple demonstrates on a daily basis that people are willing to pay a significant amount of money for products of unusually high quality. Since Apple's products tend to be among the best in the markets they participate in, Apple has a substantial cash flow from markets where numerous viable alternatives exist at significantly cheaper prices. Government intervention should be restricted only to the point necessary to preserve proper competition in the markets and punish anti-competitive behaviour.
In reality, legislation is primarily geared toward protecting businesses with barely enough consumer protection to keep consumers mostly placated. The result is that businesses expect to be given continuously rising profits and move to protect any threat to profit margins. Hence, the cries for Costco to stop selling their gas "too cheap". What this shows, or at least ought to make obvious, is that businesses don't actually want a fair and open market but rather want a market legislated in their favour. Legislation which is not in favour of a business is invariably decried by that business, as proven by tobacco companies railing against laws which claim (but fail) to protect consumers but have a detrimental effect on the already excessively large tobacco profits. Businesses also fail to realize that any new entrant to a market must mean a loss of revenue to all other competitors; or perhaps they realize this all too well and accordingly fight to prevent new competition.
The American (by extension, the Western world) media corporations have been the most blatant about legislating away threats to their old and outdated business models and refusing to innovate and adapt. It seems that other businesses are hoping that the successes demonstrated in the media markets translate well into other markets so businesses can continue on without innovation or change with no care for the benefit they could bring to the very consumers who allow them to survive.
