From: Josef 'Jupp' Schugt <jupp@...>
Date: 2003-06-25T19:45:09+09:00
Subject: Re: Ruby Developer's Guide - hurt book sale

Saluton!

* Michael Campbell; 2003-06-24, 17:56 UTC:
> Probably part of our (Americans) "free market" collective psyche;
> they charge as much as people are willing to pay.

In my opinion the problem lies in the interpretation of 'free
market'. Precisely taken, a free market is a market with optimal
competition. Optimal competition means that if product A has
advantages over product B it has the chance of replacing the latter
or at least of achieving a reasonable market share (is that the
correct term?).

What are dangers for free competition?

- De facto monopoles. Monopoles by themselves are no problem but once
  a company uses it's market power to get rid of competitors it
  becomes a severe problem - there should be a mechanism that avoids
  this.

- Cross-financing. If a company earns lots of money as member of one
  market and does use that money to finance their efforts as a
  competitor in another market there is little to no chance for
  competitors to survive - even if their products *are* better.

- Bundling. Suppose the leader of the keyboard market bundles their
  keyboards with a mouse. That would be a severe problem for the
  mouse market.

In other words: Not only an over-regulated market is an enemy of
optimal competition but also an unregulated one.

The problem becomes obvious when one takes a look at 'Microsoft vs.
Free Software'

Contrary to what proponents say even Open Source Software is not in
accord with the goal of a free competition - many Open Source
Software programmers make their life with something else than writing
Open Source Software. This is Cross-financing.

In my opinion capitalism does face a similar problem as communism:
Most people do not understand what they really mean. I do not see a
difference between a company that gives stocks to the people who work
for them so that they have a vivid interest that the company has
success and the communist idea of having the people own the means
they use for production so that they have a vivid interest that they
achieve better results.

Gis,

Josef 'Jupp' Schugt