How does free market work if the consumers are mostly idiots

[Ryan Salo]

OK, as most of you know I am a conservative. I believe in limiting government involvement. I think that people, in general, can make better decisions for themselves than some group of government employees. So I have a dilemma when I read stories like the one below.

http://money.cnn.com/2011/04/11/news/co ... /index.htm

Here is a business that is doing what it's customers want it to do which is offer lower prices. The market seems to be demanding it but in my opinion that is a flaw in our system. We have been conditioned by marketing to expect more for less. The only way to get more for less is to import the products from countries that are not on a level playing field. When you do that you put US employees out of work. Then when they are out of work they continue to buy from companies like Walmart which have 0 chance of providing them a worthwhile job.

So this is my question, are we as a country just accepting the fact that we are done manufacturing consumer goods and willing to accept the consequences or must we tax the hell out of imports to even the playing field? Soon will we have any jobs that pay from the shoulders down or will everyone have to get into a field that pays from the shoulders up and those that are not mentally able be stuck on government assistance for their entire life? Walmart's new tagline of "Save Money. Live Better." seems to be very short sighted. I can't necessarily fault Walmart and big corporations, their goal is to provide a product that consumers will buy, unfortunately the cheaper products aren't made here.

On a side note, within the last 2 years I looked into starting a small company that was going to need small plastic gardening tools for inner city kids. I looked into multiple US based plastic companies and it was actually cheaper to go buy products at Marc's that have already gone through our system starting from China than it was to make our own here in the US. If I did move forward with the company I would have been "forced" to use foreign products or I would have been out of business. It sure seems like something needs to change. Thoughts?

[ryan costa]

there is no such thing as a level playing field. it is an excuse offered by free traders to mollify voters.

where the fattest most oil addicted nation on earth. how much more stuff do we need?

the only moral system was American Protectionism. it is okay. there was plenty of trade with it. the early twentieth proponents of lowering tariffs justified it by arguing for progressive income taxes.

free trade is a relic of the slavery loving south. all negative policies and political ideology picks up steam in the south. GATT'S main advocate Cordell Hull came from tennesse.

most heavy industry, aerospace, software, suburban housing, and big box retail is highly dependent on government subsidies, grants, contracts, incentives, and infrastructure. The stadiums, sports arenas, bridges, roads, med marts, convention centers. the main aircraft manufacturers, the airport operators. the agriculture policies and subsidies that enable our fast food nation. the warehouse on wheels highways that enable shopping malls and big box retail and suburbia. the tax breaks and grants and contracts for roads and sewers and waterworks that enable suburbia. pretend it isn't: you can ask for tax breaks for the rich and big corporations with a straight face will advocating invading Iraq and Libya and keeping NATO around after the cold war.

they say 90 percent of police time is spent responding to traffic violations and accidents.

the most destructive narcotic in america was television. perhaps cell phone and ipod addiction will compound the affects. it is okay...it is some kind of free market. or something.

[Ellen Cormier]

Ryan, I think this is a great question though perhaps 30 years too late. I do not believe it is hopeless but we have to rethink what America is about and that seems to be a tough question these days.

It's interesting to wonder how much oil would be in reserve right now if we hadnt shipped all the cheap disposable trinkets here from china. But that's a side note.

In general Wal-mart is going down because it's an unpleasant shopping experience and now people don't want to use the extra gas so they go to dollar general or whatever because it is closer. Now there's surely more to it but it's late so I'm going to think about the question a little more.

[Jim DeVito]

Ellen,

I would not count wall mart out just yet. I read somewhere they are building smaller "community" stores to address the criticism you are bringing about the shopping experience.

Wall Mart will not go away because it is cheap and people either have not enough money, like getting cheap stuff, or lack alternatives. The "idiot" consumer mentioned above is the reason we still make stuff in china and burn oil to ship it here.

On a side note. I have been in the back room's of many a wall mart. It really is amazing. They have pallets and pallets of cast off Chinese junk. It looks like the factories making this crap in China say "put whatever we have extra on a pallet and those silly americans will buy it."

Think of a pallet stacked 6 foot tall with open box christmas decorations, toasters, shoes, lawn chairs, etc... They are the smart ones

It is not all wall marts fault though. We have a growing class of people who want to have this stuff and you just can't get it cheaper than wall mart. The free market does not make enough jobs that pay enough to afford to go anywhere else....

[Ellen Cormier]

To answer the original question succinctly, the fre market works because it depends on idiots and being one step ahead of the idiots. And that involves better marketing. When we wanted more fuel efficient cars, japan provided them and American companies were slow to respond. During the 90's American cars made a comeback only because people stopped caring about fuel efficiency because the price of gas went down. Foreign companies made us suv's too to compete. Now we want fuel efficiency again! And American companies are staying in the game.

I didn't mean to imply walmart was going out of business or anything I just know a lot more people who refuse to shop there. I'm even poor and I refuse to shop there for anything.

I think we will be seeing the demise of the big box store to some degree as people buy more stuff online.

[Roy Pitchford]

I think we will be seeing the demise of the big box store to some degree as people buy more stuff online.

I tend to agree with this. Online purchasing is big and only going to get bigger. Those big box stores that survive will do so filling 3 (that I can think of right now) roles:
1. to sell those goods that can't be sold online. Perishable goods like food, for example, or items that would be prohibitively expensive to ship.
2. to sell those goods that their patrons feel they must see/test before they purchase, like clothing.
3. to sell to those people who have no Internet access.