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CP.
True, but the company employing the temp has to pay the temp agency, who can take as much as half the salary of said temp. Benefits to temps is a fairly recent addition in the UK, but you are right that I'm not certain about the specifics.
About politics, etc. Well, this is clearly true if we look at government spending, where political concerns override economic ones. In the UK, for instance, private finance initiatives look to be much worse on paper, but serve an ideological aim. Less contentiously, government spending has many concerns which are not to do with econmics and so disrupt that pattern. This is treu as much of right wing governments (who might increase defence spending, say) as of left wing governments. This seems pertinent, given the large budgets that governments have.
Another example is, for instance, Murdoch and News International. In the UK they ran the Sun and The Times newspapaers at a loss in order to squeeze the competition. They did this for some time, in fact. Microsoft also has a history of those kind of anti-competition practices.
Another good example is in trade union relations (of course, economics doesn't tend to recognise unions but still...). Companies often prefer to lose large amounts in revenue, rather than be seen to be giving in to trade union demads. I remember one Railtrack strike where the losses were of the order of ten times the amount requested by the union. Justifiable, perhaps, but politically based.
Many decisions about cost aren't simple, in fact. Different prices relate to differing qualities of a product and the choice then is not entirely about supply and demand.
I am sure collusion is commonplace. The burden of proof is on the state to show if businesses are engaging in anti-competitive practices (collusion, monopolizing, etc.), and it's often hard to prove.
Right. The game theory argument is that it is collusion, rather than competition, which one would often expect to be the default. Even if that collusion is tacit. Price wars may be "good". But they may be evidence that normal economic activity is far from competitive.
Some argue that if they agree to set the price above market equilibrium, there will still be an incentive for one of the businesses to undercut the other, because they could possbily gain more revenue
Yeah, but I don't believe in a "market equilibrium". The demonstration of such is essentially ideological, in my view, by means of quantitative economics which takes as axiomatic the principles of a free market, capitalist economy. You can dismiss this as leftie nonsense if you want, but I think there is a demonstrable inadequacy of quantative economics to work in practice. I suspect that it is largely a con game. |
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, that would not (in theory!!!!) turn into a “lords and serfs” situation and would thus avoid slipping into communism. Such a society would still allow variety of wealth, as well as a process of improvement, but these would not get out of hand and create power-elites (for in getting out of hand it would sow the seeds of its own destruction).