Let's assume for a moment that you have a family and your son needs a new winter jacket. You just happened to have been in the stores last week and noticed a jacket for $100 that would be the perfect solution. Today you go back to the store and go to buy the $100 jacket and to your surprise it is now $110!
What would you do?
Try and cut a deal with the sales person - perhaps. Walk straight out of the store and check out the competition - very likely. Tell the son to wait and buy him an extra less expensive layer - good choice.
The point is, you have choices.
What seems to be frustrating in today's world for many people is that we no longer have the choice. The economist, Milton Friedman, the Grandfather of Free Enterprise stated that as consumers, we would have the best choice in the market place with a Free Enterprise system. That, we, as consumers would dictate which companies succeeded and which failed. Our dollar bill would be our voting chit and we could vote by choosing the best company to do business with.
If it is the family clothing budget, we are blessed with options. Perhaps, unsurprisingly, when it comes to essential items that we have no choice but to purchase, we have no options.
Take for example the fact that the price of gasoline today jumped from $1.14 to $1.26 in the Okanagan. A lift of more than 10%. Could you try and cut a deal - no. Could you look at the competition - there isn’t any. Is there an alternative... no.
So how did it happen so quietly?
It is called conditioning. Since January 2011 oil prices have remained relatively stable, in fact they have trended down. However, prices at the pump are closer to $1.25 than they are $1.14. We have become accustomed to the higher price of gasoline.
The same can be said of many monopolizing industries such as telecom, hydro, insurance, cable etc.
I wonder in economic classes if anyone has actually studied what happens when a few percent of the worlds population controls the majority of the worlds assets and wealth. Do we have freedom of choice? Do Friedman economics work the way he truly thought they would? Are we like the player at the monopoly board who has not purchased the “street” just the odd property on the board. If that is the case, and you have played monopoly then you know just how difficult it is to “win the game”. Freedom of Choice is not yours in that situation!
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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.
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