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<div class="moz-cite-prefix">On 2013/01/07 10:13 PM, Milton L
Mueller wrote:<br>
</div>
<blockquote
cite="mid:855077AC3D7A7147A7570370CA01ECD22F8237@SUEX10-mbx-10.ad.syr.edu"
type="cite"><span
style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Guru,
if you get badly personalized results from Google without asking
for it, what is to stop you from not using Google?
</span></blockquote>
<br>
The problem with this kind of analysis of "consumer choice" analysis
is that it is theoretically grounded in the neo-classical and/or
neoliberal economic theory. So let us look at what this says:<br>
<br>
1. If consumers have choices, then there is not a problem<br>
2. Consumers have choice NOT if there is a real choice (i.e. apples
to apples) but if the market per se is contestable (Contestable
Markets theory) - which is in part why oligopolies can be
theoretically tolerated in anti-trust law (abuse of dominant
position etc)<br>
3. Government interventions are presumptively bad. Private
initiatives (except for fraud and -as defined by law and action-
anti-competitive behaviour).<br>
<br>
Now what is the problem with this?<br>
<br>
1. Consumer choice is elevated as a moral/ethical good, in spite of
practical realities: there may be qualitative issues related choices
that are NOT available (i.e. market failures)<br>
2. The theory has an internal contradiction. Contestable Markets are
fine, but yet almost all the analysis makes use of Alfred Marshall's
representative firm. What is a representative firm as compared to a
"real" firm? It does not have the observable tendency to "first
mover" advantage or to reap the benefits of economies of scale. In
other words the theory used to justify consumer choice ab initio
excludes the advantages that flow to Google from first mover (with a
great algorithm) and the consequent economies of scale.<br>
<br>
Therefore, if one excludes these relevant tendencies from the
analysis, well then one is not saying much.<br>
<br>
While consumer choice may be a relevant approach in the
North(tactically), it has its limits in terms of theory and of
context. Analogously In the UK something as banal as supermarkets
were found to have a dominant market position when they controlled
about 4% of the market (i.e. sufficient to have upstream and
downstream negative effects). <br>
<br>
Now if one were to let reality impact on the theory/ideology, then
perhaps we can chat. I mean this whole notion of consumer choice is
aptly illustrated by the US crisis. Of course, you could have any
Mortgage Backed Security you want - there was consumer choice - and
that did not detract from the fact that the entire operation was
hoopla. As spokesperson for this neoclassical theory Alan Greenspan
said he was "shocked" that market participants breached their duties
and took on the reputational risk (in a market governed by fides).
Of course if he had been open to other ideas, then he might have
seen this coming. <br>
<br>
But in the North (with my limited experience) the adage, 'in the
land of the blind, the one eyed is king', more like "in the land of
the blind, the one eyed is mad". <br>
<br>
Welcome to the mad world of heterodox economics... <br>
<br>
<br>
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