We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

What those who instinctively reach for more state regulation of companies such as Uber assume is that a few laws and rules can “perfect” perceived failures of markets without unintended consequences. In other words, they assume markets are “imperfect” but “perfectable”. They judge markets by anecdotal failings and interventions to correct them by intentions.

Those of us who believe that markets tend to work well have more humility about our judgement. We recognise that achieving a perfect market by design is impossible. In life, things go wrong. What we think examples such as the above show is that markets work better than government regulators in developing innovations and institutions for dealing with problems, because that is in fact part of the service customers want. And the best bit? Over time, these new innovations, by enhancing competition, raise the game of everyone else too.

Ryan Bourne

12 comments to Samizdata quote of the day

  • Stonyground

    Has anyone else heard that radio Ad. that has a bunch of kiddiwinks spouting various unsupported assertions about the future of food supplies? The Ad. ends with a plug for a government website. When hearing it my thought is that the last thing that our food supply needs is government interference.

  • Alisa

    Market failure = I want something, but cannot not get it on my exact terms

  • Ignoramus

    Read somewhere that Uber is the same as “sharecropping” the Uber guys are getting screwed. The top cream off the the money whilst the drivers pay off their “loans”.

  • llamas

    I’m still trying to figure out in what way Uber et al have ‘failed’ their consumers? A better question for the compulsive regulators might be – what regulations are you going to apply to ‘conventional’ taxi services to bring them up to the same standards of speed, reliability, predictability, transparency and accountability that are part-and-parcel of the operation of Uber?

    (crickets chirping)



  • Read somewhere that Uber is the same as “sharecropping” the Uber guys are getting screwed.

    Screwed in what way? And why is the loan a “loan”?

  • Laird

    If the point Ignoramus was trying to make is what I think it was, his nom de web is well chosen.

  • bobby b

    The Uber model right now is underpriced. When you take into account gas, vehicle depreciation, and driver time, the drivers’ cut of the money is too small. Hence, I’m guessing, the “sharecroppers” analogy.

    But however much you believe in regulation as the fix for everything, this is simply a pricing issue. This is the most basic of all issues that will be addressed by the market participants eventually.

    Right now, Uber enjoys both lower pricing and higher convenience over traditional taxis. It may be that, to sustain the effort, prices must be raised to keep people driving. Prices might well have to approach traditional taxi prices.

    But still, with the end of the limited medallion model of taxi availability, the higher number of taxis available to meet demand will better serve the customers, and so the Uber model will eventually succeed. It remains to be seen whether prices will come down, remain the same, or even rise – after all, Uber is built on there being many available drivers where and when riders need them – but prices will have to find a point where Uber drivers see an advantage to themselves to continue being available.

    If sharecroppers had been able to keep a bigger chunk of their gross, sharecropping might have a better reputation. They couldn’t – they had no bargaining power – and so sharecropping was a disaster for the farmers. But Uber needs as many drivers as possible, and to attract them, prices are going to have to rise.

    What the taxi medallion system really protected was the ability of drivers to make an income as full-time taxi drivers. Uber is building a much more flexible system, where many more part-time drivers can respond to varying demand without artificial shortages, but who cannot sustain a full-time availability. In short, as with any non-protected market systems, there are going to be failures at the margins – which is how we find the margins.

  • RRS

    They judge markets by anecdotal failings and interventions to correct them by intentions.

    That stands on its own.

  • Nicholas (Unlicensed Joker!) Gray

    Just read about the bad news that, after Brexit, unemployment has fallen. When will things go up? Let’s hope the leftoid press don’t hear about this!

  • Thailover

    Most people don’t have the beginning of a clue how a market (supply and demand) regulates itself. And these same economically illiterate have no idea that a product’s success dooms it’s profitability.

    (As a successful product saturates it’s market, demand begins to fall and price equilibrium falls as well, bringing the product price closer to the manufacturing cost, reducing profits). The solution to this is constant innovation and lower prices on yesterday’s technological miracles as this year’s miracle comes on the scene, thus producing a higher standard of living for society as a whole. Refrigerators, microwave ovens (radar ranges), cell phones, game consoles, wall to wall carpeting, even ball-point pens, etc used to be available only to the rich. Now every poor household in the west has these things.

    But, since the economically illiterate don’t understand these things, they insist that every market should, indeed must be “regulated” by some government entity. So that the rich don’t take more than their “fair share”, and workers are not “exploited”. (Yes, Marxism).

    Do they understand that employers in a free market are FORCED by market forces to pay competitive wages to skilled workers? LOL, of course not, and they won’t accept it even after this elementary point is explained over and over again.

    Hell, most people don’t seem to be able to understand the difference in tax rates and tax revenues and how they’re often not directly proportional.

    Most people live in a zero-sum Flatland.

  • Laird

    “Most people live in a zero-sum Flatland.”

    That about sums it up.

  • Paul Marks

    Good post – and good comments.