Probably you all have heard whispers about economic recessions in US which can be spread to the rest of the world very fast. In a quick response Federal Reserve of US has cut the interest rate for 75 point(The greatest amount I heard in recent years) and speculators are betting that the European Central Bank and the Bank of England will soon be forced by a deteriorating economy to cut interest rates themselves.
I was watching a great show called "Daily show" and I saw that one of the guests was talking about Adam Smith and free market. Among his words there are some points about US budget, war and its effect on US economy and etc. I decided to post it since it shows how US is struggling to avoid recessions.(I'm not making this post too much scientific)
Thursday 24 January 2008
Thursday 17 January 2008
Critical consumption vs dicrimination against consumers
Today, I was thinknig about the several forms of "critical consumption", where for "critical consumption", I intend all the forms of consumption which respect echology, the human rights of workers, and so on.. In this last years the increase in this forms of consumption has been elevate: a share of consumers prefer buyng goods by firms who respect the human rights of workers, several enviromental parameters ("enviromental friendly firms"), and so on and so forth..
This increase in critical consumption could be seen as a parameter of how benevolent people are about enviromental problems, the violation of human rights and son on..Then, in a certain sense, with an increase of this kind of consumption, we can conclude that an higher share of population takes care about some important problems of the world..and this could be seen as a good factor of the world population..or at least as a good phenomenon!
BUT THE QUESTION IS: Is this phenomenon really good for all the consumers?
To go directly to the point, I was wondering if these forms of consumption were egualitarian or not!!!?? I mean: I was asking myself if these forms of consumption discriminate consumers or not?!
The answer is in the affirmative way!
Goods which respect some particular norms - i.e. critical consumption goods - are usually higher in price than the other goods: low income households cannot afford this kind of goods and are forced to buy the minimum price goods which are not enviromental friendly and are created without the respect of human rights..
Of Course, people can answer me:"look, this is not a real problem..if you look at the same problem from another perspective..everything change: richer consumers can afford the critical consumption goods..and if richer consumers buy those kind of goods, there is, in a certain sense, an inderect redistribution of wealth between all the population!! And this is good for everyone, also (and especially) for that consumers who cannot afford that types of goods!!!"
That's fine (if richer consumers pay more to buy critical consumption goods which give benefits to all the population, then also poor consumers will benefit..), but what does it happen if this kind of "critical consumption goods (or services)" are the only goods (services) on the market?
Fortunately, this phenomenon is not actual but there are two cases on which I would like to discuss about:
1) Impossibility to drive old cars during the enviromental Sundays (the Green Sundays) and Enviromental taxes on old cars (which not respect new pollution parameters); and
2) Possibility of regulating GMO food.
1) In Milan, people who onws an old car (which does not respect the new pollution parameters) and wants entering into the city with their cars, has to pay a specific enviromental tax.
This is a case of DISCRIMINATION between consumers: low income consumers which cannot buy a new and enviromental friendly car, has to pay taxes more than rich consumers who can afford new cars!!!???
During the "Green Sundays", a lot of cities prohibite people with old cars to drive into the city: also this phenomenon is a specific case of discrimination between low and high income consumers!!!
2) Some weeks ago, in USA, it has been decided to open the food markets to the GMO food (GMO: genetically modified organisms) without imposing firms to specify that this good is GMO. The reason used by the Food and Drug Administration to permit the sell of those goods is that the cost of production of those goods are lower than the cost of the traditional food and this would give benefits to low income consumers.
The very big problem is however an health one: even if it is not possible to demonstrate that GMO goods are worstly for health of people, it is also not possible to demonstrate the opposite: the unique method to be really sure that GMO food is good for health of people is to consume that kind of food and wainting for at least 20 years..after that time of consuming, science could be really sure about the effect of GMO food on health!!
Actually some GMO lobbies in Europe (where GMO is prohibited) want to obtain the permission to sell GMO food imposing firms to specify that this good is GMO (this is probably because GMO lobbies perfectly know that Europe will never accept to permit GMO food without specifying its provenience!!).
Some of you now is probably thinking: "Europe takes much care of health of people: even if Europe will accept to sell GMO good, health of people will be preserved IMPOSING FIRMS TO SPECIFY THAT THIS GOOD IS GMO!!!!!"
THIS IS NOT TRUE: IMPOSING FIRMS TO GIVE THE SPECIFICATION OF GMO FOOD IS ANOTHER DISCRIMINATION POLICY.
If Europe will accept this proposal, WE WILL DEAL WITH ANOTHER PROBLEM OF DISCRIMINATION BETWEEN CONSUMERS: GMO good will be sold at a lower price than the traditional food and this means that only richer consumers, who care about their health, will afford to buy traditional food, while poor consumers will be "forced" to buy GMO good!!! Poor consumers will be then treat as "laboratory animals": if 20 years of GMO food consuming will not have some influences on low income consumers health then, also richer consumers will start buying it!!!
Thus, this last is another example of how what can seem a "for health" policy, could be, in reality, a discrimination policy between consumers!!! Let's hope Europe will decide either to prohibite GMO food (which is the hypothesis I personally prefer) or to permit it without imposing any kind of specification: any consumer has the same rights (better..the same duties..) to become ill!!!
ciaooo
Domenico
This increase in critical consumption could be seen as a parameter of how benevolent people are about enviromental problems, the violation of human rights and son on..Then, in a certain sense, with an increase of this kind of consumption, we can conclude that an higher share of population takes care about some important problems of the world..and this could be seen as a good factor of the world population..or at least as a good phenomenon!
BUT THE QUESTION IS: Is this phenomenon really good for all the consumers?
To go directly to the point, I was wondering if these forms of consumption were egualitarian or not!!!?? I mean: I was asking myself if these forms of consumption discriminate consumers or not?!
The answer is in the affirmative way!
Goods which respect some particular norms - i.e. critical consumption goods - are usually higher in price than the other goods: low income households cannot afford this kind of goods and are forced to buy the minimum price goods which are not enviromental friendly and are created without the respect of human rights..
Of Course, people can answer me:"look, this is not a real problem..if you look at the same problem from another perspective..everything change: richer consumers can afford the critical consumption goods..and if richer consumers buy those kind of goods, there is, in a certain sense, an inderect redistribution of wealth between all the population!! And this is good for everyone, also (and especially) for that consumers who cannot afford that types of goods!!!"
That's fine (if richer consumers pay more to buy critical consumption goods which give benefits to all the population, then also poor consumers will benefit..), but what does it happen if this kind of "critical consumption goods (or services)" are the only goods (services) on the market?
Fortunately, this phenomenon is not actual but there are two cases on which I would like to discuss about:
1) Impossibility to drive old cars during the enviromental Sundays (the Green Sundays) and Enviromental taxes on old cars (which not respect new pollution parameters); and
2) Possibility of regulating GMO food.
1) In Milan, people who onws an old car (which does not respect the new pollution parameters) and wants entering into the city with their cars, has to pay a specific enviromental tax.
This is a case of DISCRIMINATION between consumers: low income consumers which cannot buy a new and enviromental friendly car, has to pay taxes more than rich consumers who can afford new cars!!!???
During the "Green Sundays", a lot of cities prohibite people with old cars to drive into the city: also this phenomenon is a specific case of discrimination between low and high income consumers!!!
2) Some weeks ago, in USA, it has been decided to open the food markets to the GMO food (GMO: genetically modified organisms) without imposing firms to specify that this good is GMO. The reason used by the Food and Drug Administration to permit the sell of those goods is that the cost of production of those goods are lower than the cost of the traditional food and this would give benefits to low income consumers.
The very big problem is however an health one: even if it is not possible to demonstrate that GMO goods are worstly for health of people, it is also not possible to demonstrate the opposite: the unique method to be really sure that GMO food is good for health of people is to consume that kind of food and wainting for at least 20 years..after that time of consuming, science could be really sure about the effect of GMO food on health!!
Actually some GMO lobbies in Europe (where GMO is prohibited) want to obtain the permission to sell GMO food imposing firms to specify that this good is GMO (this is probably because GMO lobbies perfectly know that Europe will never accept to permit GMO food without specifying its provenience!!).
Some of you now is probably thinking: "Europe takes much care of health of people: even if Europe will accept to sell GMO good, health of people will be preserved IMPOSING FIRMS TO SPECIFY THAT THIS GOOD IS GMO!!!!!"
THIS IS NOT TRUE: IMPOSING FIRMS TO GIVE THE SPECIFICATION OF GMO FOOD IS ANOTHER DISCRIMINATION POLICY.
If Europe will accept this proposal, WE WILL DEAL WITH ANOTHER PROBLEM OF DISCRIMINATION BETWEEN CONSUMERS: GMO good will be sold at a lower price than the traditional food and this means that only richer consumers, who care about their health, will afford to buy traditional food, while poor consumers will be "forced" to buy GMO good!!! Poor consumers will be then treat as "laboratory animals": if 20 years of GMO food consuming will not have some influences on low income consumers health then, also richer consumers will start buying it!!!
Thus, this last is another example of how what can seem a "for health" policy, could be, in reality, a discrimination policy between consumers!!! Let's hope Europe will decide either to prohibite GMO food (which is the hypothesis I personally prefer) or to permit it without imposing any kind of specification: any consumer has the same rights (better..the same duties..) to become ill!!!
ciaooo
Domenico
Wednesday 2 January 2008
Looking for a TV: Differences in prices between different EU countries. A matter of competition?
Last month, my father decided to change the old TV (in the living room) with a new one. Thus, he decided to look at one of the best TV on the market: SHARP LC-46HD1E!
After having chosen this TV model, he decided to look at its price in one of the most important technological products shops in Italy: MEDIAWORLD (this shop is usually considered - by Italians - a convenient shop for prices and quality!!).
The price for that model at Mediaworld was 3997 euro
Then, considering the price too much elevate, he went on the web looking for a lower price from an italian on-line shop. The lowest on-line price, he was able to find, was from www.onlinestore.it.
The price was 3194 euro
He was really satisfied about this new price (800 euro less!!! However "onlinestore" does not specify where the TV comes from..I mean from which country!! Moreover the buyer can buy this product only on the web and not from a "real" shop), but since my father is really curious, he looked at the price of the same TV model offered abroad by other shops!!
He was really impressed by the differences in price:
England: 2800 euro
France: 3035, 34 euro
Switzerland: 2585 euro
Choosing a generic shop from Switzerland, England and France, He was able to find always lower prices than the italian ones for exactly the same product!!!
Then he realized, without being an economist, that something was wrong in Italy..that, probably, in Italy there are some problems of competition between firms!!!
I totally agree with him.
Considering that the demand of technological products in Italy is almost the same of the other countries taken in consideration (I think there are not big diferrences in the aggregate demand for TV between the countries taken in consideration!), these big differences in price should be explained with some form of collusion between technological firms, or, at least, with some monopolstic power of Mediaworld in technological products on the italian market!!!
Even in the last case (a monopolistic power of Mediaworld), it would be interesting to understand what are the reasons of this situation in ITALY.
THEN..WHAT CAN I CONCLUDE? IF YOU WANT TO BUY A TV..IS BETTER TO BUY IT ABROAD..AND NOT IN ITALY!!! EVEN IF I REALLY COMPLAIN TO BUY A PRODUCT FROM A FOREIGN COUNTRY THE ITALIAN SITUATION FORCE ME TO BUY THE TV FROM ONE OF THE FOREIGN SHOPS MY FATHER FOUND ON THE WEB!!
Thanks for the attention
Domenico
After having chosen this TV model, he decided to look at its price in one of the most important technological products shops in Italy: MEDIAWORLD (this shop is usually considered - by Italians - a convenient shop for prices and quality!!).
The price for that model at Mediaworld was 3997 euro
http://compraonline.mediaworld.it/webapp/wcs/stores/servlet/ProductDisplay?catalogId=20000&storeId=20000&productId=446258&langId=-1&category_rn=13951 .
Then, considering the price too much elevate, he went on the web looking for a lower price from an italian on-line shop. The lowest on-line price, he was able to find, was from www.onlinestore.it.
The price was 3194 euro
http://www.onlinestore.it/product_info.php?products_id=4851
He was really satisfied about this new price (800 euro less!!! However "onlinestore" does not specify where the TV comes from..I mean from which country!! Moreover the buyer can buy this product only on the web and not from a "real" shop), but since my father is really curious, he looked at the price of the same TV model offered abroad by other shops!!
He was really impressed by the differences in price:
England: 2800 euro
http://www.viking-direct.co.uk/catalog/catalogSku.do?id=LC46XD1E&XREF1=IPUK707999FROGLE&XREF2=LC46XD1E&cm_mmc=SC-_-froogle-_-null-_-LC46XD1E&browsemode=consumer
France: 3035, 34 euro
http://www.twenga.fr/prix-LC-46HD1E-SHARP-TV-LCD-181243-0
Switzerland: 2585 euro
http://www.ldlc.ch/fiche/PB00064631.html
Choosing a generic shop from Switzerland, England and France, He was able to find always lower prices than the italian ones for exactly the same product!!!
Then he realized, without being an economist, that something was wrong in Italy..that, probably, in Italy there are some problems of competition between firms!!!
I totally agree with him.
Considering that the demand of technological products in Italy is almost the same of the other countries taken in consideration (I think there are not big diferrences in the aggregate demand for TV between the countries taken in consideration!), these big differences in price should be explained with some form of collusion between technological firms, or, at least, with some monopolstic power of Mediaworld in technological products on the italian market!!!
Even in the last case (a monopolistic power of Mediaworld), it would be interesting to understand what are the reasons of this situation in ITALY.
THEN..WHAT CAN I CONCLUDE? IF YOU WANT TO BUY A TV..IS BETTER TO BUY IT ABROAD..AND NOT IN ITALY!!! EVEN IF I REALLY COMPLAIN TO BUY A PRODUCT FROM A FOREIGN COUNTRY THE ITALIAN SITUATION FORCE ME TO BUY THE TV FROM ONE OF THE FOREIGN SHOPS MY FATHER FOUND ON THE WEB!!
Thanks for the attention
Domenico
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