It has gone unnoticed on us that our economic system has a couple flaws. Big ones. We heap praises upon the competitive free market system, and it is wonderful.
But, it has two significant flaws that we should be concerned about if we were to seek a perfect economic system.
One, at time of sale, sometimes there isn't any competition. That should shock you. But, yes, its true.
Two, at the point we need information about the product, usually the person giving us answers has a conflict of interest.
On these two flaws hang many a problem. Prices are jacked up. Items are overpriced. Customers are taken advantage of. Wouldn't it be a wonderful world if we could pretty much check prices from being inflated, and if we could save people from being ripped off, and if we could save them from buying things they don't need?
Sounds to me like this would improve society as much as most anything. So, if you ever set about solving all the ills of society, don't leave this off the list.
Here's my thoughts tonight on what we might do.
On that first problem: At point of sale, often there isn't any competition. I had someone come look at my air conditioner the other night. As he concluded I needed a new condenser and a new coil, I stood at point of sale. And, he alone stood before me for me to choose from. He -- ABT Mechanical -- alone offered me a product. Action, Whipple, Manwill -- all the other companies were gone from the scene. I call this having a captive customer. I call it the monopoly moment. Although we have a competitive market, if a monopoly exists at the point in time, the moment when the sale is being purchased, it washes away much of effect of the competitive market system, for that system isn't there at the most crucial point.
Alas, in our system, often at point of sale, there is no competition, the customer is captive, and the seller has a monopoly.
And, I said we have a second problem. When we are in need of information, the person giving us the information has a conflict of interest. As I was buying the air conditioner, there were a lot of things I knew nothing about. I needed someone to guide me through the sale, and the only person there to do it was the person making the sale. I may have fared a little better than many do, on this occasion, as ABT seems a company bent on integrity. Still, the usual scenario is for the company to look for a sale, and the information given comes through that set of glasses. At one point, I told the worker/salesman that I wanted to convert my heater to electricity because I was going to go solar, and the heater would need to be electric if it were to use solar. It didn't occur to me that one might be cheaper than the other, gas and electricity not being equal in price. The salesman/worker did not provide input and it was not until I spoke to the owner days later that I got that information.
So, what do we do? How do we correct our economic system, so that these two problems are done away with? Pass a law? Yes, we could pass a law, saying that when a diagnosis is needed before a product can be sold, then the company making the diagnosis cannot make the sale until all other companies have had a chance to bid.
Now, just a few years ago, this solution would not have been practical. It is only with the coming of the Internet that it is. The Internet makes it possible to place the sale on line and have all the air conditioning companies offer their bids. The company that came to my house -- ABT Mechanical -- would post the diagnosis online, and within a short time -- minutes, perhaps -- all the other companies would make their bids.
This model would work for car repairs, as well. You would go to one shop to have the car diagnosed, then you would have the option of driving to another shop for the repair once the bids came back on the Internet.
What about conflict of interest? To really erase that, you probably would need to say that the company making the diagnosis could not also make the sale. Off top, you might see some problems with this. One, what about when your car is towed to the garage? You hardly want to pay for a second tow to get it to a different garage. Second, there is the inconvenience of going to a second garage, period. Thirdly, there is the time factor. It takes extra time to go from the place where the diagnosis is made to the place where the repairs are made.
But, those problems might not play out quite so severely as might be seen. As for towing the car to a second garage, in making their bids, companies would likely realize the need to move the car and often offer to tow it at no cost. This would also remove the inconvenience of having to drive to a second shop.
What about, then, the concern it takes extra time to get the job done if one company is doing the diagnosis and you must wait for a second company to do the fixing? Well, actually, there will be times when the new system is quicker. When you go to the garage, they sometimes make the diagnosis but do not do the repairs immediately because they must wait for parts. So, they call you up, give you up, give you the estimate, and tell you it will be later before they can get to it, and you are placed behind other customers also there at the shop. In an Internet system, if someone does not have a customer at the moment, they can come get your car and fix it right then.
There are different ways to address the conflict of issue problem. One, would be to have diagnostic shops be separate from the fix-it shops. You'd take your car to a place, tell them what you wanted checked, and they would charge you a flat fee, regardless what they did or didn't find wrong. So, you would have a whole line of diagnostic shops, and a whole separate line of fix-it shops. It would be illegal to own both.