Search This Blog

Tuesday, October 22, 2013

Shrinking Hours and Obamacare

Small business is sometimes said to be the engine of jobs creation in America.  If so, the following chart doesn't bode well for employment opportunities in the future with Obamacare coming on line.


86 comments:

Harry Eagar said...

Yes, small business is often called the engine of job creation, but it isn't.

Bret said...

Well, it's certainly not gonna be going forward because of this.

erp said...

If growing the federal bureaucracy were the engine for growing jobs, as Harry is obviously inferring, the job market wouldn't be on life support.

Harry Eagar said...

Not at all what I meant, erp.

Small business creates jobs but it destroys them at about the same rate for a net gain of very little.

Notoriously, restaurant fail about 90% of the time.

The real job gains come in businesses that quit being small. There are various definitions, but the SBA cutoff of 500 is useful.

So when Wal-Mart passed 500 sometime back and grew to some hundreds of thousands or millions, almost all that job growth came from big business.

When Wal-Mart announced 35,000 FT jobs -- remember? -- that was a gain for big biz.

Small businesses notoriously ride free on big businesses, manipulating complaisant workers with split shis, PTing and seasonal work.

Businesses that continue to do that stay small.

The Obamacare scares are just that. It works for the easily frightened -- expect a huge overlap with the 2A folks.

Clovis e Adri said...

Harry,

Sorry to ask, but what are "split shis" and "PTing"? And " 2A folks"?

I need to see the US stats, Harry, but it looks to me you are downplaying small business here.

I remember to read an article on your beer companies. The numbers where that the big ones (who produce awful stuff) have 90% of the market, but only 20% of the workforce, while the small breweries had the rest of the workforce for a much smaller share of the market. The difference, of course, is due to the mechanization of the big ones, while the small keep producing in more handcrafted ways.

A similar effect must happen in many other markets.

Peter said...

Small business creates jobs but it destroys them at about the same rate for a net gain of very little.

Net gain to whom, Harry?

Thus dismissith Harry 30% of the workforce and the engine that historically drove the Americam economy. I think Harry is contemptuous of small business for the same reason that the left is so wary of home ownership--it makes macro-control much harder. The left likes big abstract collectives.


Annoying Old Guy said...

Eagar's point of view seems to be similar that of a farmer who has no use for seeds, because all the real gain in crops comes after the plants have already grown.

Bret said...

Peter wrote: "The left likes big abstract collectives."

If you can't have direct government ownership and control, then I guess regimenting all industry via control of a few large corporations is the next best thing.

I don't like big government. I also don't like big business, especially those viewed as too big to fail. Big businesses are an easy target for government and prone to corruption like any big organization.

erp said...

I was just reading this.

Bret said...

erp,

That's part of the symbiotic relationship between government and Wall Street. Government will protect them and help maximize their profits and then milk them and expect huge campaign donations. It works quite well for everybody but the taxpayer.

erp said...

That's why it's called crony capitalism and I call it fascism and it's not only Wall Street. All the large corporations, G.E., G.M., etc. are in on the scam as well. Those that demur, will be destroyed.

When I was a kid, I wondered how Hitler got control. Now I know.

Howard said...

In a an even modestly dynamic economy, jobs and businesses are being created and destroyed all the time.

Ultimately it isn't just small firms which eventually fail. This becomes apparent if you look at old chart books of stocks or read enough business history and realize how many once prominent companies disappear. There was a pretty good book from about seven years ago which dealt with this phenomenon, Why Most Things Fail, by Paul Ormerod.

This from one review:

Paul Ormerod, an unorthodox free-market economist in the tradition of Friedrich Hayek, made a surprising discovery a few years ago when he compared the failure rate of businesses with the extinction rate of species. In both cases, instead of an even flow, there were long stretches with few extinctions, interrupted by huge spikes in the failure rate.

Ormerod, a former British economic forecaster, noticed that these patterns didn't fit the well-behaved bell curve that economists are so fond of. In bell-curve economics, equilibrium is the norm. But he found that mass extinctions of companies and species are not all that unusual. Instead, the patterns fit what scientists call a power-law distribution, which is commonly observed in networks. (The Web follows a power-law distribution: The vast majority of sites have almost no links to them from other sites; a thriving handful attract thousands.) Ormerod and two collaborators published their results in Physica A, a journal of statistical physics.

...

Here is how he ends the book: "Karl Marx famously wrote that the motto of capitalists was 'Accumulate, accumulate, that is the law of Moses and the Prophets!' As in many other respects, Marx was completely wrong. 'Innovate, innovate!' -- that is the guiding principle...."


Another review here.

erp said...

You know one of things that bugs me the most about lefties is their arrogance. Marx declares what the motto of capitalists is.

Socialism can't be innovative. Only free citizens working without intimidation can be innovative.

Bret said...

erp,

There were a few other factors in Hitler's gaining control. :-)

erp said...

I know, but in fact he couldn't have gained control without the people allowing it either actively or passively just like now. Most people don't know what's going on and after the takeover is complete, they'll wonder how it happened.

Harry Eagar said...

Split shifts
Part-Timing
Second Amendment

Beer is interesting. There used to be a sizable brewery or 2 or 3 in every good-sized US city. The Big Two bought and closed them all, wiping out tens of thousands of jobs.

After a pause of about 10 years, the craft brewing business began. It took around 20 more years to gain traction and it did then explode.

I don't know what the net job gain/loss in brewing is over the past 40 years.

It does put an interesting spin on claims that 'efficiency' gains are a 'good thing.'

Harry Eagar said...

Could we leave Hitler out of this? Bret and erp are becoming indistinguishable from Alex Jones.

It is pretty rare for big corporations to close, Howard. In declining sectors they get absorbed, but they seldom just shut down.

Airlines are an exception, but that is a sector that has generated net losses over its history, so not relevant to most business models.

erp said...

Hmm. Just like there used to be 2 or 3 newspapers in every good-sized US city and more in smaller markets with varied editorial points of view. Unions closed them all decades before the internet, wiping out tens of thousands of jobs leaving only a handful of really big papers all spouting the same lefty party line. IIRC same sort of thing happened to a lot of U.S. industries like steel, auto and even very possibly breweries.

Annoying Old Guy said...

Could we leave Hitler out of this?

This from the guy who uses "Teahadist"? Who is a near unending stream of condescension and insult?

You set the tone, you own it. Time to take responsibility.

erp said...

I was using Hitler as an example of how citizens of a rich developed country of hard-working people can through complacency or conspiracy permit an ordinary jerk like Hitler (or Obama) to wrest control and wreak havoc over much of the globe.

I/we are not accusing others who may disagree with us of being Hitler or Hitler-like unless, of course, the shoe fits ...

:-}

See the difference?

Clovis e Adri said...

Harry,

I ask myself how it happened: how the older generation of consumers accepted such a poor product as the standard commercial beers, to the point they dominated the market.

Or is it possible that a Budweiser was not so awful 40 years ago? Maybe they did not use corn back then...

Bret said...

No, the beer was horrible back then too.

You should've seen the wine we drank! It was even more horrible!

Bret said...

Harry wrote: "Could we leave Hitler out of this? Bret and..."

Me? I was pointing out to erp that I thought her Hitler comment was a bit overboard.

Annoying Old Guy said...

Clovis;

I suspect because it was a lot cheaper. The citizenry is a lot wealthier now and can afford micro-brews. I remember my older brother buying one six pack of good beer and a case of Blatz or Budweiser. The former was to start, the latter for when they were drunk and couldn't tell the difference. The cost was about the same (if anything, the six pack was more).

Bret;

Gosh, how you make me regret being a teetotaler.

Clovis e Adri said...

AOG,

Do you think the "wealthier" effect would explain too the shift from Microsoft to Apple? IOW, are people more wiling to pay for a better product nowadays, hence Apple could displace Microsoft?

Bret,

I know California's wine has some good reputation. So 40 years ago it wasn't so?

Annoying Old Guy said...

In terms of Microsoft vs. Apple, I have generally found Microsoft products to be the same or better quality for my purposes and cheaper. I think the shift is more due to Apple getting better at hardware, and Microsoft starting to lose its edge and suffer from IBM disease.

Clovis e Adri said...

AOG,

Do you really think Windows, for example, is up to par with OS X?

I don't. And I am not biased here: I barely use OS X (my wife uses Apple, I don't), but in comparison I think it is superior.

Annoying Old Guy said...

Windows 7? Yes, for me. I consider even Fedora Core better than OS X. Not that OS X is a bad operating system - we've come a long way and most of them are quite good these days (like digital cameras). Except IOS, which is still not very good.

Bret said...

Clovis wrote: "I know California's wine has some good reputation. So 40 years ago it wasn't so?"

Not so good back then, no. Forty years ago is just when the push for planting reasonable quality vines and producing higher quality wines was starting.

Even now, the U.S. has only about one-tenth the quality wine grape acreage that Europe has, for example.

Peter said...

I often wonder how the older generation of consumers accepted such a poor product as the standard commercial beers, to the point they dominated the market.

Because they put a much higher value on a dependable, safe product with a predictable taste for both consumer and health reasons, and they were right to do so. When we nostalgically lament the passing of great-grandad's rich homemade brew or the delicious pies grandma made in her corner restaurant, we forget how uneven the products of that world were. Local small-scale beer production would have meant a lot of skunked brew and questionable hygiene. Chain family restaurants may not serve original gourmet fare, but you aren't likely to get food poisoning in them.

Clovis e Adri said...

Peter,

You would be right if the industrial processes that guarantees safe, dependable and predictable taste necessarily led to poor beer. It does not.

Simple proof: Europe always kept higher standards for most of their beer. Up there the consumers just wouldn't accept the garbage they sell in the Americas.

The poor beer is simply due to cheap recipes with poor ingredients (e.g. corn), optimized for profits instead of taste.

Maybe part of the explanation, like AOG remarked above, is the binge culture. In puritanical America, the youngs go hard on alcohol, and quantity matters more than quality. In Europe, a culture more tolerant to alcohol, people had the opposite priority.

But this is changing, slowly.

Peter said...

Clovis:

Brewing & distilling in Europe was built on centuries of craftsmanship, much of it protected by guilds or family-held and secret. I don't think it's reasonable to say that, if only 19th century North Americans hadn't been such tasteless binge drinkers, they could have easily replicated the best Bavaria had to offer as cost effectively. Just look at what happens when those oh-so-tasteful Europeans try to make indigenous American food like hamburgers or southern food or barbeque or creole.

But I do have to concede a certain plain roughness to a lot of North American cooking before the sixties. Overcooked meat, overboiled vegetables and the notion that "heavily spiced" meant extra salt. I remember a friend of mine who grew up in the rural Maritime provinces quipping that, in those days, dessert (often excellent) was the prize you got for getting through the main course.

Clovis e Adri said...

Peter,

You are right, they have a whole culture around this business dating from a milennia back, and that's a good reason their consumers are more demanding in this market.

But there are no big secrets nowadays, pretty much anyone can make a good beer if he so wishes. The microbreweries are there to prove it.

And I believe the same goes for Hamburgers. Like Pizza, you have good ones in too many countries too. Damn, I like the burger I make myself and I do not think you Americans (ops, or Canadians) are so much better at it :-)

Peter said...

Clovis:

My cachorro quente will beat up your hamburger any day.

Today, yes, everybody can make everything well, but that is very recent and a function of both prosperity and the communications revolution. I travelled through Europe in the seventies and tasted the delights of Wimpeyburgers in England and fried chicken on the continent. Let's just say I survived and leave it at that. And BTW, North Americans aren't the only ones with bland culinary histories. Mmm...refried beans! :-)

It's much better today, but we've lost something too. We used to travel to the southern states annually and I would savour the anticipation of pulled pork weeks ahead of the trip. In the last couple of years I've noticed almost every pub and family restaurant up here is now serving pulled pork. A lot of it is very good, but I don't like it. Not sure why, but I don't. Maybe the lack of accents. A little like drinking a good margherita in the bar at a ski-hill.

Bret said...

Having been mostly a typical "tasteless binge drinker" in my youth, I simply would've preferred the extremely cheap North American beer even if good beer was available. Microbrews are pretty tasty, but they're really expensive. Bud may be "optimized for profit" according to Clovis, but from my standpoint, it was optimized to allow me to get drunk as cheaply as possible.

Annoying Old Guy said...

Bret;

That brings up the good point that you can complain about Budweiser and how it makes beer, but ultimately it's customer preference that drives it.

Clovis;

I've had pizza in many nations and many states, but you don't know what good pizza is until you've sampled the varieties of pizza in Chicago, the pizza capital of the world.

Peter said...

Bret, that's the difference between Canadians and Americans. We are much more tasteful and discriminating binge-drinkers. We get pie-eyed on Molson's.

AOG, is right about consumer choice, but the ongoing success of Bud is such a mystery to me it almost starts making me dabble in tired leftist cant about greedy plutocrats manipulating the psyches of good honest folk through advertising. Maybe the secret is that, while the first bottle tastes like crap, the tenth goes down real smooth.

Harry Eagar said...

Peter is right on the reliability and wholesomeness point, although you have to go waaay back for that to apply. By the time the Big 2 wiped out the local brewers in he '70s, everybody was making the same insipid beer.

There's a story about how the Miller High Life people went back to the Austrian village whence came the original Miller brewer in America to celebrate a centennial. This was probably in the early '50s.

They brought some High Life, but the Americans made a point of drinking the local stuff till they noticed the locals were drinking American. That's when the Americans noticed the local village brew was awful.

Advertising and local pride had a lot to do with what people drank. 'Gimme 'Gansett' was a form of bonding.

And the reverse, snobbishness. Remember how much trouble people used to take to bring Coors back East?

Veblen explained all this long ago.

For the minority of drinkers who can even distinguish among beers, water counts. That's why there were big breweries early in Tsingtao and Monterey. Same limestone as in Pilsen. The Bohemians flocked in.

erp is of course completely delusional about both breweries and newspapers. Unions had nothing to do with it.

It isn't corn but rice that makes Bud cheap. Interesting that the Busches insisted on using whole grain rice, but when the Brazilians took over they immediately switched to cheaper, broken rice.

Nobody cuts corners closer than InBev.

Peter said...

Not all that far back, Harry. It wasn't until the seventies that, outside of the urban beautiful people in NYC and a few other major cities, there was much interest in "variety" or "natural", to say nothing of the foreign and exotic. When MacDonald's started, it wasn't seen as a symbol of bland uniformity, it was seen as a modern miracle. The exact same meal everywhere? No more overcooked or undercooked burgers? North Americans would pack Nescafé when they went to Europe to avoid those scary cappuchinos and expressos, and a European restaurant was an exercise in navigating danger in search of the familiar. Palates were pretty unsophisticated and taste fought against convenience and mass-produced novelty, usually losing. But as I said above, the homegrown cuisines (barbeque, deli, Pennsylvania Dutch, creole, Quebec, southern and much baking) were excellent.

erp said...

aog, you've obviously never had Brooklyn pizza.

Harry Eagar said...

True as to the consumer end. The best man at my wedding in 1968 had never eaten an olive till I served them at the wedding supper.

But as a redneck, I hardly qualified as urban elite.

You speak of, roundly, the old WASP culture. There were tens of millions who, like me, were not WASPs. We were the ones who offended them with our free use of garlic.

You are correct about the homogenization of road food. It's hard to find a biscuit in the South any more (except at Popeye's). Locally prepared food is labor intensive and expensive even when using subminimum wage labor.

You get what you pay for, and the cheap drives out the good. Contrary to much of what you have read here.

The greatest crime has been to the croissant. French baking in general cannot be imported to America.

I had a friend, a baker from France, who made real baguettes and sold them for $1.25, less than half what they should have gone for.

Everything else in his boulangerie/patisserie was expensive. I asked him why he sold baguettes so cheap.

"Everybody should be able to eat good bread."

Regrettably, Americans will not eat baguettes, even cheap ones, and over the years he WonderBread-ized his.



Peter said...

Harry, you really have to get out more. Honestly, whenever I hear a leftist whine on this subject, I'm reminded of my late Victorian grandmother, who never stopped talking about how everything tasted better when she was a girl. The cranky old dear never clued in that the problem may have been with her tastebuds.

I have never in my life had such ready access to such a broad range of affordable fresh quality food. That tale of your noble French baker selflessly trying to feed an America addicted to Pop Tarts was heart-warming, but in my very typical supermarket in an unexceptional neighbourhood there is an in-store bakery that makes a wide range of breads and pastries of all kinds, including different sorts of baquettes by the hundreds. It's all very high quality and the same can be said about their range of cheeses, meats (in the past few years, there has been an explosion of game meats--all inspected and safe), fish, vegetables, etc. When I was a kid, there was just lettuce, now there are ten kinds. Checked out the choice of fruit juices recently? Plus there are plenty of independant bakeries, delis, butchers, etc. offering an astounding variety of fare to die for at only slightly higher prices. And that's not even counting all the ethnic food shops from every country in the world. I have no doubt that if Clovis were to drop in for dinner unexpectedly, we could whip up a Brazilian dinner that made him homesick, and if we failed, it wouldn't be because of the quality of the food.

I think your problem is you get upset because not everybody eats what you like or think is good for them. You simply can't see the irony of sipping one of two dozen kinds of new quality micro-beers available in your neighbourhood while getting depressed about what Budweiser is doing to beer choice in America.

Clovis e Adri said...

Peter,

Thanks a lot for the invitation to dinner - although, were I to drop by, I would very much like the most Canadian dish you could offer, my concept of tourism is to wonder over new landscapes and to taste every local food the place has to offer.


AOG,

Never been to Chicago, unfortunately, but if one day I get there, the pizza is top of my list. Now and then I try to make my own pizzas and I tried a few recipes of Chicago dough already. They taste good, but I get the feeling I am far away from the real thing.

Harry,

You nailed the origins of my problems with poor beer (and, yes, they use corn too! Of the lowest kind of corn by the way, like not even chickens would eat). The guys who took over your Bud, from InBev, own the beer empire in Brazil for so long that few here knew what good beer was for a long time. Luckly, the micro-breweries have been sprawling around in the last years and now I am a happy man. Sure you can buy five InBev-like for the price of a good one, but I only need one, not five.

Harry Eagar said...

I haven't said anything about the inputs, Peter, only the outputs.

There's nothing wrong with the flour but try to find a biscuit. What are sold as biscuits are not.

The lesson of the breweries, which I have been using for decades, is that when the free-marketeers praise 'efficiency,' it is often at the expense of quality or choice.

For a long time, you could not buy a decent beer in the United States at any price (with the possible exception of Anchor in SF and a chophouse whose name I forget in Washington). The market did, indeed, eventually come to support
small specialty brewers (whose products include a lot of freak beers that are awful).

From around 1975 to the early '90s, it was nearly impossible to get anything but light lager. Even the bock beers that the local brewers used to make in the fall disappeared.

The curious thing is that when the market decreed that there would be only 2 brewers (some thought that Coors, then small, might survive as the country's only regional brewer), the survivors were expected to be Busch and Schlitz.

But then Miller introduced a truly vile product, Lit, and it was Schlitz that fell.

The point is that around 1970 when American brewing was remade, there was zero consumer demand for the change. People in New Orleans were not clamoring for Dixie to disappear. The ones who wanted Bud could buy Bud.

But then, one day, the ones who didn't want Bud had no other choice.


Annoying Old Guy said...

when the free-marketeers praise 'efficiency,' it is often at the expense of quality or choice.

You still just don't understand. If that works, then it's because the consumer choose efficiency (that is, price), over the other two. Eventually, when consumers wanted more choice, it became available.

the ones who didn't want Bud had no other choice

They could have started their own brewery, if there was so much unmet demand. My memory of my brothers and friends buying habits is that other stuff was in fact available, just not much in demand.

One is left curious, however, what you think would have been better. A blue ribbon panel on beer quality so the federal government could decide what types of beers must be brewed in the USA? Maybe a beer mandate, requiring everyone to buy a certain amount of "quality" beer every year. Yeah, that's the ticket!

Harry Eagar said...

It would have been better if the market had accommodated the customers instead of the financiers.

I doubt whether markets are capable of doing that,but it is ridiculous to claim virtues for the market that it does not display.

It's the 'fireproof hotel' problem all over again.

And you have your facts wrong. Dixie, to take one typical example, was as cheap as or cheaper than Bud.

Annoying Old Guy said...

That's incoherent and vague, even for you. I can't make any sense of it.

Harry Eagar said...

You don't understand. Didn't you read your post? The part that said the consumers chose efficiency/price?

But since Dixie was cheaper, they would have chosen Dixie, until they couldn't.

Annoying Old Guy said...

How can I have my facts wrong about Dixie if I never mentioned it?

But you didn't understand even what I did write, as "efficiency" and "price" are not the same thing. The most efficient product is that one that produces the most quality per unit input, which it not the same as being the cheapest.

Harry Eagar said...

Well, you did say that efficiency is price, no qualifiers.

And there is no evidence tha even by your metric, Dixie was less efficient.

It was a power play by finance capitalism; it had nothing whatever to do with consumer desires.

Annoying Old Guy said...

Yes, I messed up the price / efficiency comment. Bud was lower quality, but sufficiently lower price as well to be preferred. Efficiency can lower price, or improve quality, depending on which consumers prefer. It seems that for beer, it was price more than quality.

But it seems in your view, people actually buying products (or not) has nothing whatsoever to do with business success. It's all financial power plays.

Clearly that also stopped all the micro-breweries from starting up when consumer tastes changed, otherwise they'd be all over the place.

Harry Eagar said...

Bud wasn't cheaper. It's cheaper than today's very expensive local beer, but it was more expensive than Jax, Pearl etc.

And all of those were beaten on price by the downmarket labels like Grain Belt.

Annoying Old Guy said...

Lower priced than the micro-brew / "good" beers. Hitting the sweet spot of enough quality at lower cost of production is a clear winning strategy for a business. Are you sure you were a business reporter?

Clovis e Adri said...

AOG,

This is an interesting example that touches monopoly power, which is another subject we discussed before.

I think Harry's point is the power of big companies to induce a winner product even though it would not be naturally a winner. By naturally I mean: if the bigger company had not the power to buy up most of his rivals and close them down, or to restrict their access to the market.

Of course we can not absolutely ignore consumer preference too - if the product is so bad no consumer will take it, no way.

After you dominate the market, it is easy to restrict choices for the consumer to the point he is not really chosing for real anymore. The most important card those big beer companies needed to play was not in achieving a good quality per price beer, but to achieve dominance on the distribution of it through the main channels: supermarkets, bars, pubs and shows.

So if they did not could (or wanted) to buy the competitor, they only needed to deny them clear access to the market.

The renaissance of micro-brew and quality beers is, in due part, to the boom of information: it got too easy to compare your local/national market with better ones, and the consumer started to ask (and pay for) different products. The first ones to attend the demand were well rewarded, and the old beer frozen market broke free again, to the point the big companies now need to introduce higher products too.


There is an interesting lesson on it all. Free markets do not necessarily lead to better outputs by themselves: the state achieved in the 90's was a bad one, where consumer was in a prison. Bit it can *potentially* lead to better outputs, as the present situation we have now.

I see it within my Physics/Math analogies: when you have a function of many variables, there maybe be huge numbers of different local minimuns, and the free market can take you to any of them. You may end up in a "bad" minimum or a "good" one - but to pass to one when you are in other already takes external pertubations.

In the beer market case, the pertubation was the new level of information flux among countries. In some cases, the pertubation may be... government! (I feel AOG in pain now :-)

BTW, I am not defending govt. should have done anything in the beer case. Though I can defend it should do something in other cases.

Annoying Old Guy said...

Clovis;

So, was the lack of alternatives to major brews due to interfence by the major brands as you initially claim, or due to poor information as you later claim? I honestly can't make sense of what you write. You talk about how the dominant brands can restrict markets and then point out why this doesn't work in real life, that new producers come along and because of consumer demand not only succeed but force the big players to adapt as well.

So, which is it? Dominant brands can restrict access, or small players can arise and change the available product mix? As far as I can tell, there was no "prison", people simply didn't care enough. When that changed, so did the beer selection.

However, if you want a big way in which beer companies restrict access for rivals, you need only look at the government and the rules on whole sale vs. retailers, or interstate purchase, or restrictions on sales (e.g., grocery stores), or States that literally ran the alcoholic market. I would not be surpised to find that the micro-brew success was driven just as much by relaxations in these laws.

As for perturbations, the 9/11 jihadis perturbed things as well. I wouldn't consider that a positive thing, but if you want to think of government that way...

I also don't see why the beer case is any different, if you are talking of fundamental principles. I see it as all the same, because I'm an ideolog who doesn't drink beer at all, so this is all abstract to me.

Clovis e Adri said...

AOG,

---
So, was the lack of alternatives to major brews due to interfence by the major brands as you initially claim, or due to poor information as you later claim?
---
Why should it be either one or the other? I believe both things were in play.


---
You talk about how the dominant brands can restrict markets and then point out why this doesn't work in real life, [...]
---
Time, dear AOG, is an important variable here. This is a dynamical system. It evolves in time. At some point it was traped in an atractor, then a shake up in the system made it to evolve to other state.

The market went to a restricted state enforced by its big players. And it did remain so for some time. When conditions changed, everyone needed to readapt.

Why is this picture so unclear to you?


---
However, if you want a big way in which beer companies restrict access for rivals, you need only look at the government and the rules on whole sale vs. retailers, or interstate purchase, or restrictions on sales (e.g., grocery stores), or States that literally ran the alcoholic market.
---
I have no idea on what you are talking about in (i) whole sales vs retailers; (ii) interstate purchase; (iii) grocery stores and (iv) States running the show.

I thank you for any further enlightment on that - we do live in different countries and I am largely ignorant of the market rules of the US. But the description I gave above pretty much fits the beer market I know better (my own country).



---
As for perturbations, the 9/11 jihadis perturbed things as well. I wouldn't consider that a positive thing, but if you want to think of government that way...
---
By heavens AOG, what do you mean with that comparison?? Are you saying governments are terrorists?

Annoying Old Guy said...

Clovis;

The picture is not unclear to me, I simply think it's wrong. I have no doubt the dominant brewers worked to create market restrictions but I think that was, at most, a secondary effect, as we can see from the actual rise of the micro-breweries. Where we differ is that I think this was almost entirely consumer demand driven.

My other point is that brewing and selling beer is an extremely regulated market with many legal restrictions (e.g., it's still a matter of legal dispute whether you can purchase wine across state borders, e.g. mail order it). Groceries being able to sell beer is relative recent in many localities. There are still "dry" municipalities (I grew up in one) where no one can sell alcoholic beverages. In the state of Pennsylvania, all liquor stores are literally owned and run by the State. I remember the big deal when it became legal to buy a sixpack in a bar and take it home (about 10 years ago).

I would find it plausible that the rise of micro-brews was due as much to relaxation of these regulations as to consumer demand. I don't find the dominant brand conspiracy plausible.

Some governments are terrorists, and/or commit terrorist acts. But my main point is that perturbations are not necessarily good things, and that governments can "shake things up" that way doesn't imply that's a good thing either. Therefore, it doesn't follow that it would bother me to agree that, yes, governments can shakes things up and make changes. My argument has been that this rarely turns out well and therefore should be avoided.

Clovis e Adri said...

AOG,


---
I have no doubt the dominant brewers worked to create market restrictions but I think that was, at most, a secondary effect, as we can see from the actual rise of the micro-breweries. Where we differ is that I think this was almost entirely consumer demand driven.
---
The micro-brewery is yet a very small part of the market, AOG, the dominant brewers keep being dominant. And no, we do not differ on anything at this point: I made it clear it was a consumer demand drive too, I only made the point of what changed consumer's mind for that to happen.


---
In the state of Pennsylvania, all liquor stores are literally owned and run by the State.
---
Boy, I do have a hard time to understand you Americans. All this cry about communism, and you do have the State owning liquor stores?!? That's kind of unthinkable down here.



---
I would find it plausible that the rise of micro-brews was due as much to relaxation of these regulations as to consumer demand. I don't find the dominant brand conspiracy plausible.
---
Conspiracy? Where did I talk about a conspiracy?

Well, AOG, if it counts as evidence for you, down here the regulations were the same all the way through those years, the only change happening was consumer demand. And if all tell you about all the govt. regulations which hinders the micro-breweries compared to the all powerful InBev, you would find it a miracle we still have micro-breweries - it is a quite thirsty consumer demand indeed.


---
But my main point is that perturbations are not necessarily good things, and that governments can "shake things up" that way doesn't imply that's a good thing either.
---
OK, with that I completely agree. Any medicine can cure or kill, it all depends on its use.

The thing is, you look to be quite a believer of homeopathy - you never take in consideration the possibility of a medicine to actually help when well used.

Annoying Old Guy said...

Clovis;

The conspiracy is by Eagar's "finance capital".

you look to be quite a believer of homeopathy - you never take in consideration the possibility of a medicine to actually help when well used.

Um, that makes no sense. That's not what homeopaths believe, in fact quite the opposite.

You might also consider why I'm a minarchist and not an anarchist, which isn't consistent with your view.

Harry Eagar said...

There seems very little practical difference between Guy's minarchism and anarchism.

'it is easy to restrict choices for the consumer'

Especially with beer, and most especially with microbrews which almost always started out selling only draft beer.

It is easy to believe Guy doesn't know about beer. If he'd ever been in a saloon, he'd know almost all have only 6 taps: Bud and Bud Light, Miller Lite, Michelob and Michelob Light and usually one other big brand, like Pabst.

It would cost the publican many thousands to add more taps, which is why microbrewers had to start their own pubs -- brewpubs. They couldn't get their beers into places where people drink beer; and adding a bottling line is very expensive.

It is pretty hard to expand your retail business when you have to build a new store for each location.

Yes, it was financial power, nothing to do with consumer preferences.

And, the situation changed, but it took over a generation to do so. -- what good is a responsive market that cannot respond in less than a lifetime?



Annoying Old Guy said...

There is quite a large difference between minarchism and anarchism. For instance, a Republic based on the US Constitution could easily qualify as a minarchial regime, but never an anarchial one. I suppose from your totalitarian view there's not much difference, though...

As for you point, was it financial power, or a side effect of how taps in saloons? Or did those financial powers force that design on the saloon owners? You keep claiming the former and then pointing out how it was really something else. It doesn't make your base claim very believable.

Harry Eagar said...

By the time some people wanted to see microbrews (remember, after a whole generation of no choice), most saloons had 6 taps since their were only 6 fake choices from their distributors.

The reason there were only 6 fake choices was that financial power had been used to wipe out competition, although consumers wanted the old, local beers.

In England, where the setup was very different but the drive to bigness the same, the big brewers used their financial power to deny customer choice via the 'tied-house.' At the very same time that the Big 4 were wiping out choice in the US, there was a wave of tied-housing in England.

It turned out badly there, too, as the failure of Federation, the world's largest brewery shows.

The same use of financial muscle to eliminate consumer choice is so usual that it is taught in college marketing courses.

I like the example of beer because it is so simple and clear, but the system is also evident in supermarkets (where big companies buy shelf space to freeze out local competition). One of my very favorite examples is dBase III.

dBase was finance capitalism in all its glory: stolen intellectual property that took over the market by paying big users to adopt it.

That one turned out badly, too, especially for the suckers at Broderbund.

Guy, you may even have heard about that one, though for all your cocksureness about business, you show little knowledge of how it operates.



Annoying Old Guy said...

though for all your cocksureness about business, you show little knowledge of how it operates.

Unsurprisingly, I think exactly the same about you.

Tales of how terrible "finance capital" is while delivering tales of how it doesn't succeed anyway is, again, not very convincing. I'm still waiting for your alternative to how the beer market turned out.

Clovis e Adri said...

AOG,


---
Um, that makes no sense. That's not what homeopaths believe, in fact quite the opposite.
---
If we restrict medicine to the allopathic kind, my phrase was correct.

Have you noticed, AOG, that if "a Republic based on the US Constitution could easily qualify as a minarchial regime", it is open to wide interpretions the extent to which the government (local or federal) can interfere in the economy? I mean, only Us Constitution + Republic is not necessarily equal to miniarchism. Otherwise you would be in one.

What I find interesting in your freedom call, embodied in your miniarchist positions, is that you only look to care for your particular definition of freedom, AOG. For example, when a major beer company restricts the market choices and, in practice, forbids me to have a good beer, I feel my freedom restricted. I feel myself bad about it, just as bad as when you are denied something due to government regulations. Why do you care so much for the govt. induced restriction, and dismiss so easily the one induced by the Beer Company?

I start to think I care more for freedom than you, AOG.

Harry Eagar said...

The beer market turned out badly for all the people who wanted (perhaps would still want, if thy knew it had once existed) their local beer.

As I've said before, people don't drink beer in the long run, they drink it every day.

Another reason I particularly like the beer example is that it makes a hash out of the most famous example of how the market works to serve he consumer -- Adam Smith's breakfast.

Smith said the brewer would supply his beer because it was in the brewer's interest (this wasn't even true when and where Smith wrote, if he had bothered to look outide his own room, but that is another story).

The brewers followed what they thought was their own interest (building gigantic breweries that needed a gigantic customer base to keep open). It did not benefit the customers, who were denied the beer they wanted; and, for most of the brewers, it did not work out so well either.

But whether it worked out well for the financiers or not, it didn't serve the customers.

Annoying Old Guy said...

Clovis;

Why do you care so much for the govt. induced restriction, and dismiss so easily the one induced by the Beer Company?

Consent. The Beer Company doesn't forbid you anything, it fails to provide it. All the actions that lead to that are among consenting adults. As a result, you could get around it if you wanted, it would just be more effort. You are no worse off than if the Beer Company didn't exist at all (in which case you'd have no beer).

In contrast the government voids consent, it uses force to stop you from doing something and there is no escape. It makes you worse off than nothing.

It can never be "freedom" if someone is coerced to labor for someone else's benefit. When you say your "freedom" is the right to make, by force, other people do what you want, then you're talking about slavery, not freedom.

Mr. Eagar;

How did finance capital get all those people to buy that mass produced beer?

How do you explain Yuenglings? It has operated continuously since 1829. Or Rolling Rock, brewing since 1939?

It seems to me that where people really did want their local beers, those surived. Where they didn't one may reasonably presume it wasn't that important.

Clovis e Adri said...

AOG,

---
Consent. The Beer Company doesn't forbid you anything, it fails to provide it.
---

Your answer is a good one. But you are walking a tightrope here.

When any big business can arranje (i) for taxes to be much higher for the small/local producer (or, the contrary, the taxes to be smaller for the big company, which in terms of competitivity is the same); (ii) most sellers to deny access to competitors due to exclusivity contracts; (iii) move lawsuits that bankrupt the small guy; it is not forbiding anything by regulation, as Govt. does, but it is effectively doing so anyway - and see that case (iii) requires no consenting of adults.

To use your own phrase:

"As a result, you could get around it if you wanted, it would just be more effort."

But there is always a limit of effort -> infinite that is as restrictive as any govt. regulation, or more, since it can not be changed by vote.

Also reagarding to your claim:

"You are no worse off than if the Beer Company didn't exist at all (in which case you'd have no beer)."

I disagree with it too. There are cases where you are indeed worse. Most of them are related to when the company can control government in a way it strikes you through regulation. You usually blame only govt. when that happens. I like to put blame where blame is due, and usually it means both are guilty.

Annoying Old Guy said...

Clovis;

When any big business can arranje (i) for taxes to be much higher for the small/local producer

This is where I find you incomprehensible. Yes, that's clearly a problem but it's a problem because of the taxation, or the reguation. That is, the problem is the result of government power. So we see that such dominance is either short lived or supported by government. That is precisely why I seek to limit the power of government because that is the root of these problems.

Let me note that the one thing I have never been able to explain to Mr. Eagar is that I don't expect perfection, or a utopia, from a minarchal government. It, too, will be made out of humans. My view is that for all the problems such a system would have, making government stronger will overall make the problems worse.

Harry Eagar said...

I understand what you believe. I just don't believe you have evidence for it.

I am halfway through 'Hellfire Nation' by James Morone, which describes how recurring moral spasms result in more government and more and broader freedoms.

And what about the alternative explanation for the novel opposition to neighborhood schools?

Annoying Old Guy said...

What was novel about it?

Clovis e Adri said...

AOG,

---
This is where I find you incomprehensible. Yes, that's clearly a problem but it's a problem because of the taxation, or the reguation.
---
If you read back my last paragraph, you'll see I preemptively answered you. I did add that govt. can make the problem worse by acting on behalf of special interests. BTW, Bret last post is just another, and better, example.

---
That is precisely why I seek to limit the power of government because that is the root of these problems.
---
There was a time when people thought Companies were the problem - they eliminated them, called it communism, and we know how it ended. You look to point fingers at gonvernment with the same naivety of those who used to point fingers only at capitalism.

I think you also greatly underestimate the ingenuity of our species to corrupt any system you make.

Annoying Old Guy said...

I think you also greatly underestimate the ingenuity of our species to corrupt any system you make.

That's what I think about you. My view is proper approach is to disperse and limit power, not concentrate (e.g., stronger government). You seem to think we can avoid corruption, I think the best we can do is limit the damage.

Clovis e Adri said...

AOG,

---
You seem to think we can avoid corruption, I think the best we can do is limit the damage.
---
I do not enjoy using this kind of argument, which borders on Erp's style, but you oblige me:

I do live among blatant and shameful corruption since I was born. You can barely imagine how so. To navigate through it is almost an everyday task. I may be naive about some things in life, corruption is not one of them.

I know how very, very hard it is to get rid of corruption, even more when the system is dominated by it. So, no, I do not believe we can easily avoid corruption. As I abundantly see corruption down here in every form and manifestation, I believe I may be paying more attention to its different faces than you.

IMHO, to make the government very small is not the solution. To make every player - public and private - truly accountable and transparent is a good start, but still far from enough. You need to further balance the powers in play, so ideally you need both public and private players strong (or both weak - there is very little corruption in Antarctica :-). I believe the successful nations are the ones which achieved this sort of right mix.

So, in my opinion, if you keep weakening Government in a place where the Private Sector is rich and powerful, you are fostering more corruption in future.

erp said...

Clovis, name the nation(s) you think have achieved a successful mix.

As for my method of arguing, other than name calling and sarcasm, I haven't heard a refuting argument. I report my personal experiences going back six decades and you ask the impertinent question about whether I've talked a lefty lately? As if any of them is going to proffer an argument I haven't already heard many times before or as Harry does, bring forth an obscure source who in his opinion has the answers or self-serving studies confirming a preconceived conclusion.

Socialism has failed in every instance it has been tried in well over one hundred years, yet you and your brethren continue to plague us with these attempts to take away our humanity and fit us into cogs in a wheel.

These are some of the different members of the human race.

Harry Eagar said...

Not that obscure, erp. It won several top history prizes.

I do, it is true, often cite obscure sources, but'Hellfire Nation' is not one of those.

erp said...

"It" What's the reference?

Clovis e Adri said...

Erp,


Just take every sucessfull nation - let us measure that by GDP per capita - and look at the relationship between GDP and Govt. total income. You'll hard pressed to find small government there.


And I was not referring to your habit of telling about your personal history (which usually I like to hear about), but by the implication you place that you always know better because of it. You constantly use you elderly status to try to shut me up. So in my last comment I indicated that "I do not enjoy using this kind of argument" to make it clear, for AOG, that I was not using my experience with that purpose.

Bret said...

Clovis wrote: "Just take every sucessfull nation - let us measure that by GDP per capita - and look at the relationship between GDP and Govt. total income. You'll hard pressed to find small government there."

Hong Kong and Singapore both spend less than 10% of GDP on government and are both quite successful, especially given very limited natural resources. Both are in the top 15 GDP per capita (using PPP).

Bret said...

Clovis wrote: "...your solution may be really hard to implement..."

Revenue taxes are extremely easy to implement. If you mean difficult politically, then probably.

Clovis wrote: "It is somehow the analog of govt. deciding what is the right size of a family, for example, China like."

Sure, it's saying something like after the tenth kid, you have to start paying additional taxes. That doesn't seem too unreasonable to me either. You can have as big a company as you want or as many kids as you want, you just have increased taxes if you get over a certain size. It's no different than progressive income taxes.

Clovis wrote: "And nothing guarantees it will work..."

No, no guarantees. What is guaranteed, is that what we currently have is NOT working.

Clovis wrote: "It is pretty hard to allow for globalized free markets while trying to maintain their control from a local/national perspective."

Yet another of my upcoming posts is why I think globalized free markets are also a bad idea and what I propose to do about that. Hopefully, I'll do better at finishing that post than I have at the anti-anti-trust post that I promised (I'm having trouble reducing the anti-anti-trust post to something less than 20,000 words which is just way, way too long for this sort of forum). :-)

Harry Eagar said...

The US could get its expenditures down quite a lot if it closed down the military, too.

Bret said...

% GDP spent on Military...

Singapore: 3.6%

U.S.: 4.6%

Difference is 1%.

Clovis e Adri said...

Bret,

Singapore and Hong Kong? Really?

OK, it is my fault, I should have further delimited the method to real countries only - because Hong Kong isn't, and Singapore is smaller than many cities in the world in population and area.

I guess if you wanted to reinforce your point on size and scales, OK, but you reinforced mine too - no front runners with small states.

---
Revenue taxes are extremely easy to implement. If you mean difficult politically, then probably.
---
My fault again, I've meant you solution of an upper bound limit for company size - this one would be hard to implement, politically and in practice too.


---
Yet another of my upcoming posts is why I think globalized free markets are also a bad idea and what I propose to do about that.
---
That's one going to be interesting. I look forward to it.

Bret said...

Clovis,

Singapore has the same population as Norway, and isn't all that much smaller than Sweden, Switzerland, Finland, etc. The fact that Singapore is very well off without land and resources aligns with my point that big government isn't required for success.

Clovis wrote: "...but you reinforced mine too - no front runners with small states."

I have no idea what you mean.

Clovis wrote: "I've meant you solution of an upper bound limit for company size..."

I'm not proposing an upper bound on company size. I'm proposing a progressive tax on revenue. There are no constraints on maximum revenue, it's just taxed progressively.

Clovis e Adri said...

Bret,

---
Singapore has the same population as Norway, and isn't all that much smaller than Sweden, Switzerland, Finland, etc. The fact that Singapore is very well off without land and resources aligns with my point that big government isn't required for success.
---
Please Bret, take a look at Googlemaps, Singapore is truly small in area, much smaller than tiny Switzerland.

Sure they have their own merit, being rich within their limitations, but the complexity of their "country" and society is negligible with much of other countries you compare it to.

Your point only shows that really tiny places are easier to manage. Not a big novelty.


---
Clovis wrote: "...but you reinforced mine too - no front runners with small states."

I have no idea what you mean.
---
I've meant you did not found (real) countries as counter-examples, hence substantiating my call.


---
I'm not proposing an upper bound on company size.
---
Yes, I jumbled things up, sorry.

Bret said...

Clovis wrote: "...but the complexity of their "country" and society is negligible with much of other countries you compare it to."

We'll just have to disagree on that point then. I consider Singapore and Hong Kong extremely important datapoints and I consider size of territory unimportant in the age of modern transportation and communication. Since you discount the importance of Singapore and Hong Kong completely, that will partly explain our fundamentally different narratives.

At the very minimum, they provide evidence for my Divided We Stand post.

Harry Eagar said...

I still say the US could get its expenditures down quite a lot by eliminating its military.

I don't see what percentage of GDP has to do with that.