A guy in California attempted to make money in the milk market. His tactics were so irresponsible, so reckless that the state had to step in and effectivly shut him down. What did he do? He charged less for milk than the milk cartel did. That’s right, he saved people money by going into direct compitition with the milk cartel. The cartel has plenty of political clout, and it uses it to prevent compitition. You can read the whole story here:
http://www.coyoteblog.com/coyote_blog/2006/12/its_all_monopol.html#comments
A common complaint that people have levied against me is that I am “pro big business”. As a matter of fact I am not, I am pro free market, everyone in compitition with each other (people and businesses). Businesses (especially large ones) fight free market ideas tooth and nail because it exposes them to compitition and lower profits. Of course those lower profits translate directly into lower prices. The milk cartel is one of the most powerful lobbys in the nation. Why? Because of all of the freaking money that they make without compitition. The same goes for sugar and many other agricultural products. The fights against Wal Mart are usually framed as trying to save small businesses. The fact of the matter is that it is other large businesses (Royal Ahold, Safeway, and the Unions… yes, Unions are just other large businesses) that are trying to avoid compitition for their beneifit, forget the consumer… It sickens me to see companies getting away with this, it makes me even angrier that people are so worked up about Wal Mart (which saves people billions of dollars a year) and don’t care and/or don’t know about the many companies that are sticking it to us with the full blessings and enforcement of our government. That’s something to get upset about…
Isaac
5 replies on “Unbelievable…”
competition
LOL, that’s what I get for using an internet cafe instead of my laptop. The whole world can see how badly I spell… BTW, leave your name next time…
Isaac
Thought you would reecognize your own mom
The milk farmers of America can barely make ends meet as it is, you don’t have any clue what kind of plight they are in, maybe you should think of America’s self-sustainibility of agriculture before you demand that the already low milk prices be brought further down!!
Beth
If the milk farmers are just getting by with generous help from all of us, then they truly need to go out of business. Do you have any idea what kind of milk surplus the US runs? By milk surplus I mean milk or dairy products that are not consumed by consumers and are therefore eligible to be bought by the government at fixed prices. You do realize that:
In 2002, the USDA had 1.15 BILLION pounds of dry milk in storage.
The government pays over a billion dollars a year for surplus butter. A General Accounting Office (GAO) study concluded that a reduction in the government price support system would have netted consumers savings of $10.4 billion from 1986 to 2001.
That was just 5 minutes of googling milk surplus. These surpluses are what is left over after people buy everything that they want. The government is required to buy these excesses and we get to foot the bill. Not only are we paying for the dairy products that we do consume, we’re paying for the stuff we don’t. I can assure you that the milk industry is doing very very well. It wouldn’t surprise me that some smaller farms are not, but that’s the way it is in most businesses, the larger companies enjoy greater economies of scale and therefore better efficieny. In most every market, the less effecient companies are allowed to go out of business. Yes, that family does indeed suffer, as does anyone else that loses their job, but they do not have the right to “milk” us to support their failing business. The redistribution of wasted human talent and resources are what’s gained when inefficient companies go under. In 1900, over 50% of workers in the US were on farms. Today that number is closer to 2% and production has never been higher. Who reading this is really disappointed that 50% of us aren’t working on farms? If there was a functioning market for milk products (absent government meddling), the prediction is that we would have lower milk prices and no surplus at all. Artifical price support helps no one but special intrests, and it is always the huge companies that benefit most from government largesse.
It would actually be better to simply pay the farmers what they would get from selling their excess to the government without them actually making it. That’s how bad this situation is. Markets work well for everything else, why not milk? Has there ever been a shortage of bread? How about eggs? Maybe beef, chicken, pencils, bags, computers, etc.? When the government gets out of the subsidy business, consumer’s wants will be filled at the lowest price possible. With any luck the percentage of workers that are on farms will go below the 1% level in the near future. Yes, it is too bad that some people will lose their farm, but small businesses go under every day and there’s no reason to mandate support for them either…
Isaac