The dangers of overcentralization of shopping. The country in which I presently live went into lockdown a couple of weeks ago, but I have still been able to order all kinds of stuff and have it delivered to my home: some furniture, some books, vinyl records, a new vacuum cleaner. That is because none of the disparate online shops here to which one turns are overburdened. Amazon’s decision to be the one-stop-shop for everyone and sell food as well, now makes it unable to provide the rest of its inventory.
Well, on the other hand, it seems like because Amazon is so centralized, they had a lot of capacity which they can now re-purpose. Previously they were shipping both non-essential stuff (books, vinyl records, etc) and essential (food, medicines), and now all those resources can go into essential things.
If the vinyl record shops had a completely separate fulfillment system, there would be no easy way to repurpose it to ship essential items, so we would be in a worse position.
They can also do this without worrying about profit in the short term. The essentials may have lower margins but higher benefit to society. Amazon can take that financial hit over the next couple months and not go bankrupt
In an unencumbered free market system where shipping systems were not dominated by any one particular shopping vendor (not Amazon, not vinyl record companies, nobody), what would naturally happen would be a sharp increase in shipping costs in accordance with demand (incentivizing shipping companies to increase supply), followed quickly by a corresponding decrease in demand for shipping items the market deems non-essential (e.g. I'm less inclined to order vinyl records online if shipping costs go up, but if I can't get hand sanitizer anywhere _but_ online I'll probably still order it).
I'm not sure what you're trying to say. Are you saying an unencumbered free market system is impossible, or just that it's not what our current system is right now?
If the latter, I agree; that was sort of the whole point of my comment. Amazon controls a large portion of the shipping market, therefore what we have here is closer to a monopsony than an unencumbered free market.
If the former, I mostly disagree. Obviously a perfectly idealized free market system is impossible in the real world: all idealized systems are. There's no such thing as a frictionless surface or a perfect sphere either. That doesn't mean however that we couldn't be a lot closer to that ideal than where we are now, or that idealized systems aren't useful tools for modeling the behavior of similar, non-idealized systems in the real world.
While an unencumbered free market can exist it's not a stable equilibrium. Without strong external forces keeping it in that state a free market will quickly centralize power and enact artificial market barriers.
From the rules: Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. And: Be kind. Don't be snarky. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive
>In an unencumbered free market system where shipping systems were not dominated by any one particular shopping vendor
isn't it a natural feature of unencumbered free market to become with time dominated by a one or a very few large players? It is basically a symmetry breaking process.
Increased cost disincentivizes hoarding and incentivizes everyone to conserve, meaning there's more to go around.
If there are people who literally can't afford to buy hand sanitizer then that's a problem which needs to be dealt with separately, through non-market means. Artificially keeping cost low for everyone without increasing supply isn't the solution; all that does is create a situation where hand santisier is sold out everywhere and no one can get any. It also reduces the incentive for companies that manufacture hand sanitizer to increase their supply, and reduces the amount of capital they have available to increase production in the first place.
"Literally can't afford" is a very murky line though. What if they can afford it but only if they forgo some other necessity? Does that solve the problem perhaps?
My office, which sent everybody home, also got hand sanitizer for every conference room. The same conference rooms that nobody is using. It's a colossal waste. And I work for a FAANG. It would have been good if they had had to pay an inflated price for hand sanitizer and has therefore reconsidered and not contributed to the shortage.
Yeah, the same is happening with internet infrastructure and basically any other service. Because of the centralized nature of these things, everyone is now overloading the few at the top.
Maybe this will equalize when people start using alternatives because the big ones can't keep up?
