My Brand of Economics

Chris,

Yes sir, my comment about Indian babies was in my post at 04:59:40PM.


Chris, what I did when I saw my young trying to chew on something that they had no business chewing on was on the first occurence to take away the object, say NO firmly and forcefully, and on the second occurence to maybe pop a hand or smack their butt. So, chewing and swallowing lead was never a fear in my home, my kids just did not do it. Extrapolate that out to all other so called disciplinary problems with kids and you have it.

Chris, I am sorry but your Indian friends of today are not the Indians of the 1600s to the 1800s. You missed my opening the subject so I forgive you this.

Since I know that you nor anyone else will actually take the time to look it up, I offer you this from my own anthropological and palentological studies: Life in America was not the cushy socialist existence that current 'in vogue' propaganda would have you believe. There was constant warfare and raids happening between tribes of Indians in America. When a raid came, the women would run and hide (if possible) with the children. A crying squalling baby would give away a hiding place and that meant capture and slavery at the least, death as a norm. What to do, what to do?

Indian mothers of that period from day one would put their hands over the baby's mouth and nose when they first made an attempt to cry and smother them. They did this repeatedly and consistently until it was ingrained in the child that crying brought instant near death, pain, and fear. They learned to not cry, ever.

I have no doubt that your 'in vogue Indian friends' will deny this happened; but I go with the historical recordings. It happened and it was effective.

I taught my children with the same efficiency, consistency, and fearlessness. Oh, I did not prevent them from crying per se, but if they came to your house they would not touch a thing, tear up or destroy a thing, they would not make a idiotic fuss in a restaurant or store, and they ate what was on their plates. In other words they received education and discipline, and I loved them dearly.

I look at kids today, my step-grandchildren, and others that I see in public, I read of their behavior in schools, and it all makes me sick to know that people are so afraid of their own kids that they let them dictate how the home will be run.

vidyohs --

I never said that I pass on my parenting responsibilities to a manufacturer. But, if a manufacturer sells a product which is dangerous if used as intended (and it's not an inherently dangerous product, like dynamite), then that manufacturer should be responsible for the harm caused. It's not really a question of responsibility as much as it is causation: If A hurts B, then A has to compensate B for B's harm. You seem to be saying: "If A hurts B, but C, through the exertion of sufficient effort, could have stopped such harm, then A does not have to compensate B."

I didn't find your original reference to Indian babies (was it in this comment thread?), but I have several Indian friends with babies who cry and teethe and put things in their mouths. If you have been effective at keeping your kids from doing such things, I would love to hear how you did it.

Chris,

Dear sir, we could continue talking past each other for eons to no avail what-so-ever. You come from a different world than I.

"Busting the butt" of an 18-month old is hardly effective or feasible."

Now is that really true? NO. Did you read the part about the Indian babies that did not cry or squall no matter what? Did you invest even one nano second of thought to that question? No.

Teaching a child begins on day one of its life and if you think anything else then you and your children are lost....like so many I see today.

It has never been a question of when or how capable babies are of learning....the only question is when or how capable are you as a parent of teaching.

Com'on now be an honest curious person, find out how Indian mothers taught their children not to cry and when they began that instruction. Open your eyes to reality, kids can learn, do you have the courage and ability to teach?

They are your kids and you always have the primary responsibility, you can not dodge that and claim to be a truly loving and interested parent. You can not pass that off to a manufacturer or to a government and remain honest with yourself.

It's that simple and government does not need to be involved in any way.

vidyohs --

Babies teethe. They put things in their mouths. It's part of being that age. "Busting the butt" of an 18-month old is hardly effective or feasible.

Legally, the manufacturer has the greater responsibility. If you sell something, intending that it will be put to a specific use and the product is dangerous when used in that manner, the manufacturer should be liable. Heck, it makes the most sense for the manufacturer to be liable -- the manufacturer has the greatest information and control over the product and is in the best position to make sure that products are safe.

Lead Paint is an especially good example -- what parent can look at a product and determine that it's been painted with lead paint? Should each parent have his/her own testing kit with which to examine toys?

I'm not claiming that parents should be absolved of responsibility -- if they negligently allow their kids to play with something dangerous, they should be held responsible.

STRB,

Big deal, the only guy you ever sued was someone you thought harmed you, so how fast would you sue if your grandchild swallowed a magnet that you didn't teach him to not put in his mouth? I bet the complaint would hit the court faster than a speeding bullet.....after all it would be Bob Eckert's fault not yours, not the kids you didn't teach, and not your grandchild's, at least by your thinking.

God/Nature, take your choice, didn't much care about you, me, or our kids when the world was made, and it certainly wasn't made sqeeky clean, sterile, soft, and comfy eveloping with security. No, there are things that kids can put in their mouths, sharp points all over, heavy things to fall on them, critters to bite and kill them, the list of hazards is endless. That is the world I was born into, I don't know about you. And it is an utter fallacy that young children can not and should not be taught behavior that increases their odds of growing to adulthood. Instruction in behavior can start from day one, it has been done, and has been proven to work and be effective; all without harming a single child. If you doubt this then do some research on this: when the Europeans came to the new world they observed cultures from tip to tip of the Americas where children did not cry. There were no squalling brats. And, the Europeans could not fathom it. Now do some research on why that was and you will see that teaching behavior from day one is possible if one is a true sincere loving parent who wants to see a child grow to adulthood.

The reason it isn't done is that parents today refuse to accept their responsibility to be stronger than their kids and to teach their kids. The worst part of it is that we have developed a society, a culture in this country that encourages parents to be cowards when dealing with their kids.

What we have now is make a plethora of laws to criminalize everything and push the responsibility off on to the state. There is a name for this way of life. It is called socialism....the state is God and has all responsibility so it isn't necessary for you, STRB, to take the time or make the effort to teach and discipline your kids or grandkids.

A Reagan conservative, yet your words as written in comments show over and over just how cozy you can be with the socialist view point.

The truth is frequently rude, and my truth remains: if your child or grandchildren reach age three without having learned not to put potentially harmful things in their mouth then one of two things is true, and I stated those options above.

And, Chris, of course the toys were targeted for small children.....they are called toys. Toys are for the amusment of small minds: But, dear sir, so what? Does that alleviate you of your parental responsibility to make sure it is safe if safety is a worry to you? If you buy a toy for your child that has issues where the safety is a doubt in your mind and you do not personally tug, push, twist, and squeeze until you are satisfied then who has the greater responsibility if your child does twist off such as a magnet and swallow it, you or the manufacturer? I don't care if there is lead in the paint, your child would have to eat an enormous amount of it before he could get enough in his system to harm him, and My God, if you haven't noticed him doing it before then and busted his butt good for chewing on his toys, then who has the greater responsibility you or the manufacturer?

As the world is just so big and hazardous, with so many things that can harm the human body, it just makes more sense to me to teach youngsters from the git'go to not put things in their mouths, stuff 'em in their ears, poke their eyes out with sharp objects and to handle those sharp objects with care, not to put their hands in fire, or stick hairpins in electrical sockets, not to attempt to play with snakes or spiders of any kind etc. etc.......rather than use the government to pass laws against the very earth itself in our seeking of safety for kids without our own personal responsiblity being called out.

Russ Nelson,

I agree with you in that neither government nor corporate behavior has any concern, whatsoever, for people they affect. However, your implied assertion that I should rely on the self-interests of a corporation, because they marginally coincide with my own, ignores the truth that many, many companies are happy to kill you as long as they get your money.

Now, as in the current case, Mattel may be an exception to my "rule of skepticism" but only barely.

While I'm not a huge fan of government, I'm also not a fan of playing Russian Roulette with every product I buy, hoping that Company X wants my repeat business more than they want a quick buck. Unfortunately, all too many businesses prefer the quick buck.

If, as you proffer, I should trust corporate behavior because it marginally coincides with my interests, then, pray tell, why are we seeing so many huge recalls - toys, pet foods, laptop batteries, tires, ad nauseum - from China? Does this "coinciding interests" rule hold true in these cases, or should I only trust large companies like Sony and Toyota?

In general, your assertion that corporations are more trustworthy than government is one I can agree with. After all, there is no group *less* honorable than government. However, comparing bad to the worst does not make the bad better.

Having at least a little oversight by government in instances like these makes a lot more sense to me than just trusting the company to do what's right.

vidyohs --

The problem is that the products in question were targeted at small children who do put things in their mouths. If I see a toy that says 'for children ages 1-2,' there's an automatic implication that the toy is *safe* for children ages 1-2 (who put things in their mouths.)

Sure, parents can teach their kids not to put things in their mouths, but that process takes time. In the meantime, are those kids supposed to not be given toys, or only given toys if the parents can watch them every second, to make sure that some small piece doesn't break off?

vid:

I'm a Reagan conservative ( a real conservative not the Bush corporate whore type) and quite a responsible fellow.

My oldest grandchild is three years old and quite well behaved but he is is still 3. Bob Eckert (CEO of Mattel) is supposed to be responsible for his conduct too.

You are quite rude and nasty, perhaps you spend too much time being a dittohead. Perhaps you just hate the whole world.

And the only person I ever sued was the guy whom after consuming too much malt liquor, drove 85 in a 35 and hit my car at a stoplight. I guess I'm just weak or something.

Vid, I feel sorry for you. My 3 year old grandson has better manners.

STRB,

Typical liberal comment.

"On the magnet issue, this has been an issue for years (I'm a protective grandpa) and design flaws should have been corrected many years ago."

It just doesn't occur to you guys that if you truly were protective you'd do whatever it takes to teach your grandchildren or children not to put things in their mouths. My parents did in a very effective way and I never put stuff into my mouth that I wasn't aware that I could choke on it if I wasn't careful. I didn't eat paint even though I came from a poor family and was often hungry, and I didn't poke little metal things into electrical sockets.

I got my hands slapped early on, felt a little pain, and learned. Are your grandkids so stupid that they can't learn, or are you so stupid that you can't teach?

It is the strangest thing the design flaws in the very earth just offer so much potential to kill us if we are stupid. Pebbles are always available to little kids to put in their mouths. Strange poisonous plants are around to kill or make ill. Rather than try and correct the design flaws of nature, my parents corrected the design flaws in me.

It's probably too late for your grandkids, you've made them into little liberal thumbsuckers who will never take responsibility and who when harmed will always blame some one else "for not telling them or not preventing them".

And, yes I have a rough tone to my comments and that is because I see your kind and your kids kind, and your grandkids kind every day in lawsuits and I am sick of you all.

Paul D --

I think you're getting the math a little wrong there. You can't just compare the cost of the recall against the cost of the quality control system--you have to use the cost of the recall multiplied by the likelihood that you'd need to do one. The math might have been:

It will cost us $50M to do quality control. If we don't do it, there's a 20% chance that we'll need to do a recall that will cost us $200M. $40M (20% of $200M) is less than $50M, so we won't do the QC.

Of course, had they known that the recall would have been necessary, they would have made the opposite choice. But, I just call that hindsight, not an original mistake.

I know that playing the lottery is a bad deal, so I don't play. The fact that the number I would have chosen comes up does not mean that I was wrong to refuse to play -- it was the best strategy at the time.

"If I am correct, then that tells us something about what Mattel viewed as the various costs -- a recall strategy, even though it damaged the brand, was preferable to a monitoring strategy, which didn't."

I think it is far more likely that Mattel screwed up and made a mistake. It is hard for me to imagine that a large recall is less expensive than a system of quality control, leaving aside the issue of damage to the brand.

However, if Mattel, in fact, made the right business decision, wouldn't that indicate that it delivered what consumer's wanted-- a lower priced, lower quality product?

"Mattel increased profits by ignoring quality and safety, and now they will pay."

So the market is working correctly, right?. In an effort to pursue its self-interest, "increasing profits" Mattel "ignored quality and safety" and "now it will pay" for its mistake.

So perhaps in the future, Mattel in its efforts to increase profits will not ignore quality and safety so that it will not have to pay for that mistake again.


The market doesn't guarantee that companies will always make the best business decisions. It just penalizes companies that do not deliver what the consumer wants.

CRC --

Hindsight is always 20/20, so perhaps it's a bit unfair for me to criticize Mattel for what it did not do. However, a normal part of project planning is risk management -- the process of getting all the stakeholders into a room looking at a situation, deciding what could go wrong, and then deciding what to do, if anything, to either reduce the risk or mitigate the damage. (And then meeting periodically thereafter to re-evaluate.)

At some point, Mattel decided to out-source to this Chinese company. I find it hard to believe that the quality-control person in the room didn't ask "how are we going to do quality control?" In fact, I suspect that the question was asked, and Mattel chose a mitigation strategy (recalls) instead of a risk-reduction strategy (stronger oversight of the Chinese manufacturer).

If I am correct, then that tells us something about what Mattel viewed as the various costs -- a recall strategy, even though it damaged the brand, was preferable to a monitoring strategy, which didn't. And, that choice indicates a low value placed on the Mattel (and Thomas-the-Tank-Engine) brand.

Faulttolerant: Neither a corporation nor a government has your best interests at heart. What makes corporations tolerable is that each of them has its own interests at heart. The free market forces them to consider your desires, because if they do not, another company will offet you a better deal. The further you get from a free market, the worse a deal you get offered.

Now, it is possible to try to use force to coerce a better offer, but where can the money come from to pay for this sweeter deal? Right, it still comes from the customer. So now you have to pay for the offer of violence AND the product itself.

Mattel claims in writing) to already have the most rigorous safety program in the toy industry.

In the next breath they announce their new safety program, including testing paint, testing more toys, random testing and explaining the safety programs to vendors.

IF statement #1 is true, then the toy industry is a disaster area.

On the magnet issue, this has been an issue for years (I'm a protective grandpa) and design flaws should have been corrected many years ago.

Mattel increased profits by ignoring quality and safety, and now they will pay.

Do you remember his commercial where he smacked a competitors "fresh" chicken on a table. The hard thud revealed that the government allows chicken to be called fresh when chilled down to a temperature most of us would call frozen.

Don says it is brands. But I go to the grocery store and buy unbranded milk, beef, pork -- except maybe ham --, chicken,fresh fish, vegetables every week. Why don't I worry about the safety of these unbranded products.

Two reasons. One is government safety inspections and the other is the reputation of the grocery store. So the two act together


to be better than either one could be alone.

Chicken reminds me. There is a branded type of chicken. It it Purdue. this is one of the greatest marketing campaigns in modern history where they managed to take a pure commodity product and produce a brand that customers will pay more for. But do you know what the real difference is between a Purdue chicken and the unbranded chicken in the next shelf. Yellow food dye. That is it Purdue injects his chickens with yellow food dye so there skin has a yellow hue. He then advertises that his chickens are better and the yellow skin is proof of it..

But except for the dye they are identical to the other chickens and even go through the exact same government inspection process.


Yet he charges a premium for this.

Chris, you seem to be saying that Mattel, et al are guilty of not being omniscient.

save_the_rustbelt, You say "Mattel has trouble putting together a recall without a boost and some organizational help from the CPSC.", according to who? You? Your own interpretation of the events? I see the article merely reporting that they were coordinating with the CPSC. YOu also say "Mattel accepted outsourced products manufactured and packaged for final sale, apparently with no quality controls other than faith in the manufacturers." Again, according to who? You? No quality controls? None? Nada? Or just none that happen to catch this problem?

CRC,

To your comment that companies, like Mattel, will always work to produce the absolute best product because of the profit motive (long-term sales) is a great theme for the classroom, but falls far short of reality.

Yes, companies DO want our loyalty - but not at the expense of the current quarter's profit. Very, very few manufacturers are willing to bypass a profit opportunity in the short term for some nebulous product-position in the long-term.

I realize that anecdotes aren't data, but here goes one anyway: Having worked for several large US manifacturers at various points in my career, I've never observed even one of them ever discuss making the "best" product. To the contrary, the only thing that is on the horizon - both short and long term - is how to move as much product, with as little effort, cost and investment of resources as possible.

To anthropomorphosize a corporation and assert that "it" cares about consumers simply doesn't wash. The people who run manufacturing facilities are interested in doing the minimum work for maximum profit while staying just this side of legality. Doing any more than that is a waste of resources and a dimunition of profit.

I don't trust a corporation any further than I trust the government. Neither of them have my interests at heart - no matter how many lies they tell.

Lee Kelly:

For you to take from my remarks that government will *ever* work in the best interests of the citizens shows an amazing inability on your part to comprehend English.

Mattel has trouble putting together a recall without a boost and some organizational help from the CPSC.

I realize economists know little about management, but this is a risk management failure of gigantic proportions.

Mattel accepted outsourced products manufactured and packaged for final sale, apparently with no quality controls other than faith in the manufacturers.

update:

A Mattel executive just announced on CNBC that forthwith, Mattel will have quality controls!!!!! Mattel will inspect the products sold under its' label!

80% of toys worldwide are made in China, and most of this year's Christmas toys are already in cargo containers headed for various ports. This could be a cluster mess of incredible proportions.

I think economists would call this a "market failure?"

CRC --

The problem, though, is that the risks of out-sourcing have been for a very long time. One of the biggest is that you lose control over quality and manufacturing standards. How many MBAs does Mattel employ? Surely *somebody* at the company was at least academically aware of the risk.

save_the-rustbelt, would you explain how your post supports your assertion that: "the market sometimes needs a little prodding from the government"?

faulttolerant, you point out the correct fact that "most firms have a vastly more profit-driven motivation". The argument is that this (long-term) profit motive drives people to provide better quality (including safer) products over the long term. While there are quick-buck artists who care only about short term profits (and that's usually all they will get), the majority of companies are in for the long haul. The Mattel example is a good one...they want to be selling us toys now, at Christmas, next year, for birthdays and such for many, many years. They realize that their ability to do this will be severly hampered by the perception that their products are unsafe or, worse, deadly. Their profit motive is driving them to make products better.

As to why they didn't detect this problem sooner...well...who knows. Maybe they are not as omniscient as the state. Maybe they have never had a problem of this sort in the past and had no reason to be know/think they would. Once others started having such problems they decided to investigate their own products for problems.

CRC --

The problem I have is that we have been seeing a rash of problems with products made in China (Mattel has now recalled over 7 million items.) Surely, if Mattel were so concerned with its brand, the better strategy would have been to monitor its supply chain BEFORE these problems came to light, not after.

Maybe the answer is that these producers have not been acting rationally.

One exception I can think of is Byrd. They make folding knives that are far cheaper than their western counter-parts but are of superb quality. Interestingly, Byrd is actually a subsidiary of American knife manufacturer Spyderco. This being widely known, the brand authority of Spyderco rubbed off on Byrd so people bought the knives. They then realised how good they were and started to recognise Byrd as a good brand in its own right.

This argument (Proferred by our faultolerant) that government will act in its polity's best interest is, IMHO, naive and childish.

This argument (Proferred by our host) that a firm will act in its customers' best interest is, IMHO, naive and childish.

While there *are* companies that work hard to build a quality product, most firms have a vastly more profit-driven motivation. These firms do ONLY what it takes to make money and not one iota more.

To assert that regulation is unnecessary (the typical lib answer to just about everything except post-nasal drip) is as useful as the Republicrat perspective that regulation solves all problems.

Are we "over regulated"? Possibly. Do regulations uniformly fail? Unlikely. Do companies "do the right thing" out of some misplaced sense of conscience? Not a chance.

The recalls we're seeing, of inferior or dangerous Chinese made products, are partially (if not entirely) feuled by penalties that government can levy. And not just financial penalties, either. An executive of one of these import companies can serve jail time if he/she knowingly introduces dangerous products to consumers.

I'm all for allowing "the market" to wreak havoc on suppliers who provide inferior products. That's a fine perspective when we're discussing IBM/Lenovo laptops - mostly because very few people are subject to death or dismemberment because the Lenovo laptop is slow or of poor quality. (Battery explosions excluded).

However, when we're talking about tires that unwrap at 60MPH, lead paint in children's toys, poisons in toothpaste....I'm much less happy with the hoary "the market will handle it" argument.

I ask the true libs here: How many kids have to die in order to make your "the market will handle it" perspective worthwhile? After all, as we're seeing right now, relying on a company like Fischer Price to engage in due diligence is simply not enough.

Gee, I guess the market sometimes needs a little prodding from the government....

Excerpted from today's news....

By NATASHA METZLER, Associated Press Writer

"WASHINGTON - Toy-making giant Mattel Inc. issued recalls Tuesday for about 9 million Chinese-made toys that contain magnets that can be swallowed by children or could have lead paint.

The recalls includes 7.3 million play sets, including Polly Pocket dolls and Batman action figures, and 253,000 die cast cars that contain lead paint. The action was announced on the company's Web site and at a news conference here by the Consumer Product Safety Commission."

and

"The Consumer Product Safety Commission, which negotiated details of Mattel's recalls, reported that since its recall of Polly Pockets play sets in Nov. 11, three children had been injured by swallowing more than one magnet. All three suffered intestinal perforations that required surgery.

Two weeks ago, Mattel's Fisher-Price division announced the worldwide recall of 1.5 million Chinese-made preschool toys featuring characters such as Dora the Explorer, Big Bird and Elmo. About 967,000 of those toys were sold in the United States between May and August."

Now we will see iof the CEO of Mattel has enough honor to resign - don't bet on it.

Chris, your points about the various recalls really seem to demonstrate the point that these companies are trying to protect their brands (as well as guard against liability for harming customers). These are a pair of good incentives neither of which require state intervention. One article I read about the Mattel recall had Mattel sharing concerns about sales for the upcoming Christmas season. Clearly they are concerned that their brand is (or will be) tarnished and will affect future sales. Their own self-interest appears to be driving them toward safer products. It should also be noted that Mattel appears to have initiated their own internal lead paint investigations after the initial lead paint issue with other toy companies came to light.

All in all these actions seems to show one or more companies acting to preserve their brand identity.

I would also note the Taco Bell incident a few months back. I have also heard rumors (this was years ago) about some kind of situation that arose on a Disney Cruiseline ship that involved some illness. Supposedly they acted immediately to completely strip the ship (internally) removing (and burning) all mattresses and bed dressings as measure to eradicate whatever the problem was. They were zealously protecting their brand (and liability).

Sam --

My point was that brand names are not as strong of a consumer friend as Don thinks.

One comment after reading my last post: The obvious question is: why, if manufacturers are concerned about liability, do they allow products to get to the sales floor? After all, it seems that liability and the threat of brand-tarnishing should provide the same incentive.

I don't think that's true, though. You have to look at the effect of the recall on the incentive. Doing a recall does not untarnish the brand. Heck, if anything, the publicity associated with the recall probably tarnishes the brand MORE. But, a recall can really reduce your liability.

Product recalls are thus more consistent with liability-motivation than with brand-tarnishment-motivation.

I suggest that one of the big reasons for the recalls is liability -- under the product-liability laws of most states, the manufacturer and retail seller of a product are responsible for defects in that product. The main reason that Mattel is pulling its Thomas-the-Tank-Engine toys is just because it doesn't want to be sued.

Libertarians do hold that companies, just as individuals, should be liable for any harm they may cause to others.

So what's your point?

While I agree that a strong brand *should* give an incentive to maintain quality, just to avoid tarnishing the brand, experience shows that that incentive often isn't strong enough.

Mattel had to recall 300,000 toys which were already in stores. Remember the pet food recall? Those were, for the most part, brand name pet foods. Fisher-Price, another strong brand name, had to do its own recalls. If these manufacturers were so interested in protecting their brands, why weren't they more vigilant in watching their supply chain?

Even the Chinese recall products that aren't branded are often sold in stores with strong brand names -- you would think that those stores would have a similar interest. Heck, the poison toothpaste is distributed in hotels with strong brand names.

I suggest that one of the big reasons for the recalls is liability -- under the product-liability laws of most states, the manufacturer and retail seller of a product are responsible for defects in that product. The main reason that Mattel is pulling its Thomas-the-Tank-Engine toys is just because it doesn't want to be sued.

Is Gil a new name for muigeo? Same technique, strawman argument.

Was the whole of human history pretty rosy and stories of suffering were mostly mythology?

Hell no. the point being made is that capitalism is not to blame for humankind's miserable lot throughout much of history.

Indeed, it was economic freedom that enabled mankind to rise above the struggle to survive.

Was the whole of human history pretty rosy and stories of suffering were mostly mythology? Perhaps, as scribes were hardly independent journalists. But I'm sure you'll find this link as a Socialist myth-maker too:

http://www.channel4.com/history/microsites/W/worstjobs/

sethstorm, you missed my point...it is entirely fiction. It has no grounding in reality. It is the assumption that is does that has supported its mythology all these years.

Read: http://www.libertyunbound.com/archive/2006_08/r...>

"Regulations change the behavior of firms."

My company is doing a public offering. We have a high minimum investment so we can avoid Sarbox compliance. The major change in our behavior is to exclude the small individual investor from our offering.

The quality of Lenovo is not explained solely by "competitiveness", you have to remember what they are competing for; the customer's choice.

The reduced quality is how reduced pricing is achieved. Obviously there is a market for such a product.

I build my own computers, and believe I am able to achieve higher quality for the price, however, price is an object and I do not build the best computer 'money can buy'.

There is also a market for higher quality computers (as with many products) and they are manufactured and sold as well.

The thing to note is that not everyone needs, desires , or is willing to pay for the highest quality.

Read my previous post and consider the big picture.

CRC:

I am quite aware of it being fiction, however it was not without some grounding in reality.

That is why I stated to take a very careful look, not just the surface dismissal you gave it.

If companies cut corners in product cost, it is because consumers are moving price up the priority list relative to quality.

If there's one thing we should blame for this shift, I suggest laying it on the cost of government spending.

Ask how this is so, and it will be explained.

sethstorm, you didn't seriously use Upton Sinclair's muckraking, socialist propaganda FICTION as support for your reasoning, did you? Goodness. It amazes me that people are still taking that book seriously after all these years. It was fiction (in every sense of that word).

However, regulation is what keeps companies from being tempted to go back down the path of low quality. To circumvent that, the US has gone towards places that do not hold such standards - such as China. While markets may react faster, regulations ensure that the lesson is held longer.

Otherwise, quality from worker to product can suffer a "death by a thousand cuts" due to "competition". In that case, it is justifiable to limit choice to ensure that what remains is safe and is of high quality.

If Spencer needed to look for an example, a very careful look in to Upton Sinclair's "The Jungle" may be a good start.

In the case of IBM/Lenovo, it has even reduced the quality of a product. While this is not a life/death issue, it can hit home that the quality of a product eventually can be worn down by mere "competitiveness". Alternatives may exist, but quality *was* what made that brand different. Now Lenovo is starting to issue its thousand cuts by competition to the product lines it has inherited.

(note:I am aware that IBM and Lenovo both manufacture in China, but quality was more enforced with the US company)

spencer, you have plainly not worked a day in the business development side of a private company if you think that the government cares more about my customers than I do.

It's called competition. Firms compete with each other to offer the best products.

In the current mixed economy we have in the US firms do behave exactly as you suggest. It is to their advantage to provide safe, reliable products to the consumer. But how much of that behavior is due to the existence of regulation? Regulations change the behavior of firms. For the good firms it assures that they have a partner in the government that largely prevents fly by night firms from taking market share by offering cheaper products.

Without this assurance would firms behave the same? You believe in a theory that says the firms would act this way even if regulations did not exist. But on the other hand we have a wealth of historic evidence that shows that without regulation many more firms take chances and cut corners to save a little and boost profits. They even do this when regulations exist. So how can you demonstrate that the overwhelming majority of firms would not act this way in the absence of regulations?

Notice, I'm not asking for a theory. I'm asking for hard facts.

The Chinese brand is pretty effective too:

http://news.bbc.co.uk/2/hi/asia-pacific/6943689.stm

<grin>