London Streets

Recently, hundreds of razor blades were found in the Thames at Isleworth. If you’re a Londoner, you will be familiar with the ‘tart cards’ that we see on telephone booths, and the chewing gums on our pavements. Ask yourself this: why don’t we see the same sort of littering and vandalism on private properties? Why is it for example, that when you walk into Charles Tyrwhitt on Jermyn Street you walk into a very clean, tidy, well organized, beautifully furnished shop with a distinctly pleasant smell? It won’t surprise you. It’s that ‘filthy’ word (as Russell Brand likes to call it), it’s profit. Ironic that people clear filth because of a filthy concept and they make filth in the absence of the filthy concept isn’t it?

The logic behind it is that a person who invests their own money in a property would go to all lengths to make a return on that property, part of which is protecting it from other peoples’ littering, vandalism and by keeping it tidy, presentable and organized. They will hire cleaners, purchase equipment spend time researching methods, they will imitate competitors, they will, in short, do what they can to get ahead of competition by being most efficient in every way. As such, competition is the best way to have clean, tidy, presentable and well organized places and buildings. And competition comes when people spend their own money and compete with others to make profit from that investment. They compete on quality, on prices, on tidiness and anything and everything they can to win market share from their competitors.

But what about the capitalists exploiting the proletariat? This is the most frequent objection to capitalism. First of all, the alternative to capitalism is for politicians to control property to some extent which makes things even worse- much worse- because they don’t have the same incentive, they can also be corrupt, they don’t have the same competition and, above all, they are backed by the coercive apparatus of the state. Secondly, capitalism is bad for capitalists and limits their exploitative powers. A capitalist has to compete with other capitalists. If capitalist A prices things too high then capitalist B will price lower than A and steal his market share. If a capitalist is a monopolist then setting prices too high is dangerous because it creates a whole market without that product and service which creates incentives for entrepreneurs to enter that market through some sort of innovation. Thirdly, the state is monopolist by nature and definition whereas no agent in the market has that characteristic even though economists talk about ‘natural monopolies’.

2 Comments

  1. We all have a monopoly on the supply of our labour, but most of us are fungible, to a greater extent, somewhat hampering our negotiating position as we bid for higher pay. There are also ‘failure monopolies’, like the Channel Tunnel, which although it has substitutes (ferries, aircraft etc.) has managed at enormous and uneconomic cost, to be a monopoly, but of course, one with a government at both ends, and it is only a lease for whoever ended up buying out the tunnel’s constructor.

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