Welcome to an Australian Christmas of profiteering.

Prepare to pay more for petrol/fuel, food, liquor, presents etc as Australian Businesses big and small routinely lift their margins in sync with the holiday season and each other. Corporations such as banks, supermarkets, petrol distributers, travel providers etc will all most likely find a way to gouge your pocket this christmas. Banks for example have already risen the interest rate on your credit card pre-christmas without any need for justification for such increases. Legally in Australia today '"post Howard/Costello", they are not required to have a reason.

My local corporate liquor outlet increased the prices of many items in their store by 10-15% today. This is many times the rate of inflation and this is possible because there is no requirement by seller to observe a maximum recommended retail price.

Competition is the saviour they say, but real competition is mythical in Australia today when one considers the petrol companies raising and lowering the price of fuel in precise unison, supermarkets crushing competitors with predatory pricing then whacking up the prices, big banks swallowing smaller ones, mining giants merging, telco and privatized utility monopolies etc.

The absence of adequate regulatory protection for end consumers is the very driver of anti-competitive behavior and needs urgent and dramatic repair. Profit itself is not a dirty word, but unbridled profit for profits sake is dangerous and will ultimately result in a lowering of living standards for most people.

All too true, thinker 2. Like I said yesterday in another thread, the free market is a crock of crap!
http://forum.onlineopinion.com.au/thread.asp?article=9755#156817

My old mate Col Rouge won’t like it, but we most definitely need a much more socialistic regime in Australia, with much better government control and regulatory protection.

It is crystal clear that you don't run a retail business, thinker 2.

The Christmas period is a most hazardous and expensive time of year.

First of all, you have to make some pretty risky guesses, as to the volume of customers to expect, and the amount of goods they will buy.

The customer estimate will dictate the number of staff you need to employ. If you get it wrong, on any given day over the entire period, with too few you will either lose potential business (and have some very annoyed customers), with too many you pay over the odds compared with the till takings.

Guessing how much people will spend, and on what lines, is your second nightmare. If you assume that they will ignore the GFC and splash out, you could be left with expensive unsold stock - worst, of course, if that stock is perishable. If you assume they will all keep their wallets closed, you could have empty shelves - and staff hanging around - on the two busiest pre-Christmas shopping days.

Then there's the problem with your Bank Manager. He is going to use the GFC excuse to rate you a far higher risk than previously, and charge you an arm and a leg for your overdraft.

No-one is looking for your sympathy, of course. But you'd be pretty annoyed if you went Christmas shopping and found nothing on the shelves, wouldn't you?

Which it would appear is Ludwig's objective.

The more government control you exert on the retail trade, Ludwig, the emptier the shelves will be.

If you disagree, give me a scenario where this is not the case.

Thanks for discussion Pericles and Ludwig ,

I was remarking that profit for profit sake at an unbridled or unchecked level was socially and economically unhealthy.

I do have some understanding of business Pericles, and I'm suggesting that lack of regulatory checks and balances is an encouragement for unethical behavior. Encouragement in fact for crooks who can act and think like crooks and be legitimate in business at the same time. Possibly and most probably rendering your small business uncompetitive as we speak. This is not the best system for even your future Pericles.

Your suppliers can whack up the price you pay (as a small business) and can without justification or the attachment or relativity to their costs increase yours. This can be driven by a management decision to to increase their margin. Unbridled profit I repeat.

I also mentioned the opportunity for the big to swallow the small.

If your referring to small business, then your business is controlled ultimately by corporate power somewhere along the line. The decision regarding the capacity/viability of a small business to trade is effectively is made elsewhere; beyond the control of the small business operator.

In a democracy, the people (supposedly) have a chance to decide "what is fair and what isn't"?. If they are presented with the right questions by someone who actually is attempting to achieve the greater good, then progress may be possible.

If the decisions for the future are to be made by the corporate few, and not by the consensus of the inhabitants of this earth, can we at least make sure that the right people are doing the right thing and making the right decisions at the right time and are not motivated by self interest alone

Pericles

Been there done that, However, our existed by virtue of holiday shopping.

One bad Christmas made the rest of the year a struggle.

So I guess it depends on what retail you were in.

Most people go into business to make money. A lesser number do it to provide a service. If a business makes money due to demand than so be it. To make money by way of extortion is crook. Misappropriation (Crime) most certainly is the most profitable of all due to backing by incompetent government.

I guess the question has to be asked, thinker 2.

>>lack of regulatory checks and balances is an encouragement for unethical behavior.<<

While that is true as a generalization, do you have anything specific in mind, as far as regulation is concerned?

A government "watchdog" on prices has never worked, in any circumstances. Anywhere. Ever. In fact it has been used as a means to legitimize price increases across an entire segment, as a form of sanctioned monopoly.

So what else - short of Ludwig's centralization of the means of production - can be done?

But it sounds as though you have something specific in mind:

>>crooks who can act and think like crooks and be legitimate in business at the same time. Possibly and most probably rendering your small business uncompetitive as we speak.<<

How can they do this. Seriously. I'm intrigued.

>>Your suppliers can whack up the price you pay (as a small business) and can without justification or the attachment or relativity to their costs increase yours. This can be driven by a management decision to to increase their margin.<<

Only if they act in concert, thinker 2, which is already illegal. Otherwise, there are plenty of their competitors who are willing to do business at realistic prices.

>>your business is controlled ultimately by corporate power somewhere along the line. The decision regarding the capacity/viability of a small business to trade is effectively is made elsewhere; beyond the control of the small business operator.<<

My business, I can assure you, is controlled by me. Decisions are made by me. And they are all in my control.

Except for government red tape, which is a genuine pain.

But maybe you have real examples that we can use as a basis for discussion - at the moment it's all a bit mysterious.

thinker 2
So what about when many businesses hold 'post Christmas sales' and often slash prices by 50% or more.

Now I have no problem with having a 'set price' all year round but, don't expect businesses to keep their prices steady in these exceptional times and then drop them for sales.

Prawns are a prime example.

Christmas week they sell for as much as $40 per kilo, (supply and demand) whereas, they often sell for $15 kilo in off peak times.

Now take pork. Pork prices rise (wholesale) each week from about early November up until Christmas week as the demand is so high.

Now as for fuel, well we all know these guys are simply crooks and our ACCC is a 'toothless tiger'. Some things will never change.

“”The more government control you exert on the retail trade, Ludwig, the emptier the shelves will be.”

Not at all Pericles. Obviously I want the sort of regulatory regime that will lead to vibrant healthy retail trade, that will help prevent retailers from being ripped off, sold substandard stock, being extorted, defamed or undercut by big competitors to the point of making them non-viable, etc, etc

I mean, how could we possibly have a healthy business environment without a vigorous rule of law??

Of course there will always be conjecture as to just what are good rules and what aren’t, and we’ll always have the complications of some rules being good some people and bad for others. But you seem to be arguing for a minimalist regulatory regime, which would surely work against small retailers.

continued

Scenario:

You, a small retailer, wants to buy stock for the Christmas period. You are told by the wholesaler that you have to buy in bulk if you want to get it at a reasonable price, or a small amount at a much higher an unviable price. You are forced to buy far more than you want, because there is no regulation preventing this.

You find that some of the stock is damaged. You try to return it and get your money back. But of course you are told to get stuffed.

The argument that you have leads to the wholesaler defaming you because he has decided that he wants to drive you out of business.

He’s got friends who pay you a visit, do a bit of damage, make you look very bad to your customers, and on top of that, extort you.

Then there is a shop just down the road that can sell the same sort of stuff that you are selling at a considerably cheaper price, because it is owned by the wholesaler’s brother.

Etc etc. You get the picture.

Many small businesses have a got a lot to worry about over the Christmas period, as you point out. So they certainly don’t need extra worries. They need to have confidence that the law will protect them to reasonable extent.

Again obviously, a good regulatory regime is all-important.

I am a little tired of excuses from business. They hire casual, part time. They rort when they can. Then they blame business risk. Business is risky. Yet that risk is for skilled business owners to take on and manage. All we are doing is allowing bad management practise flourish by allowing the risk to taken on by consumer and staff instead of the proprietor.

Possibly Ludwig's business incompetence is the cause of his hatred of the free market.

"A fool and his money are soon parted"

Regulatory regimes almost always increase prices. The difference is that they will be a uniform increase.

The increase in casual jobs is probably due to the increase regulation of work places under labor.

I’m struggling Shadow Minister to make sense of your post. So rather than respond to what you have written, could I please request a somewhat fuller description of your concerns about my desire for good regulation of the market and to certainly not just leave the market as a free and unregulated entity.

Thanks.

Regulations are not really that important anymore. There is so much red tape, nonsense, forms and whatever to start a business if you want to do it legally you would not survive. If you operate illegally then there is probably about 90% chance of getting away with it. There is no actual reward for a ethical operator so I am perhaps being a bit harsh.

I got taken by a "business" and ended up in the supreme court. I had started proceedings in the fair trading tribunal and their lawyer said they shoud take me to a higher court to prempt that as it may have led to loss of license. So goes higher court, judge doesn't want to know about it because it should have gone to tribunal. I get told not to push it because it will annoy the judge. So I am begged not to front a court I was forced to go to. Business needed a good lawyer to protect the business as a going concern. I was only after a small hearing. The cost to get justice was too high for me as I had a lot less to lose and could not justify it. Long story but hardly worth getting justice as a consumer. If you suffer from illegal operations as an employee even harder.

I read one convenience store operator was fined $50,000 for underpaying staff. They were still at it not much later. The fine was less than their savings probably. Or they needed to keep underpaying staff to pay the fine lol. Either way did not work.

So rules only help lawyers and crooks.

You have never run a business, have you Ludwig?

>>how could we possibly have a healthy business environment without a vigorous rule of law?<<

We do. Because there is.

>>You are forced to buy far more than you want, because there is no regulation preventing this.<<

Not at all.

If that supplier wants to keep my custom, we needs to agree reasonable terms. If he fails to abide by those terms, I find another supplier. If none of the suppliers will meet my required terms, none of them will have my custom.

If they gang together to fix prices, that's already against the law.

If they decide that they don't need small retailers, that's very much their problem. We are, as a group, far more valuable to them than the big retailers, who have entire departments dedicated to keeping the distributors on their financial toes.

>>You find that some of the stock is damaged. You try to return it and get your money back. But of course you are told to get stuffed.<<

I will already have the terms of trade written into our supplier agreement. If they break those terms, I take them to court. Most often, they don't like to be taken to court.

>>The argument that you have leads to the wholesaler defaming you because he has decided that he wants to drive you out of business.<<

You forget that without us, collectively, he has no business.

>>He’s got friends who pay you a visit, do a bit of damage, make you look very bad to your customers, and on top of that, extort you.<<

Where are we? Palermo?

>>Then there is a shop just down the road that can sell the same sort of stuff that you are selling at a considerably cheaper price, because it is owned by the wholesaler’s brother.<<

So the wholesaler would be better off with me as a customer, wouldn't he. Because I don't ask for a family discount.

But anyway, what law can you come up with to prevent nepotism?

In fact, what laws do you think we need?

Specifically.

Ludwig,

Regulations always impose a compliance cost on business, usually greater on smaller businesses. As these costs can only be passed onto the customer, who benefits?

The laws of supply and demand indicate for a lower price supply decreases while demand increases.

The classic is the lesson learnt by most socialists in imposing rent control. Very shortly there was a desperate shortage of rental property which pushed up rents in non rent controlled areas. Grocery price controls lead to empty shelves in regulated stores with much higher prices in an informal (black) market.

If a business charges too much the customers will move. It is not the place of government to interfere, any such regulation is not a good regulation, and why even the most rabid left wing goverments shy away from this suicidal policy.

Thinker2 “Welcome to an Australian Christmas of profiteering.”

Actually when I think about how the incumbent government is planning to spend up to $200 billion on the “dimulous and associated squanderings” and all the other bulldust which socialist see as “essentials “ and reflect on the 700+ a year it will cost every man, woman and child per annum in interest alone, I find the notion of “Christmas” to be something which is completely unaffordable

So as for profiteering, well when the vendor is a private company, you are not actually “forced” to buy from them but when government get into any act, they can extort what they like, when they like and you can do absolutely nothing about it.

I suppose we will soon all start pining for the prudence of the Howard government when the bills for the “dimulous shindig” start hitting the voting tax payers.

If "business" is to be maligned as "Crime",

"Government" could readily be aligned with "child prostitution" (because it is the as yet unborn generations who will be working their a##es off to pay for the socialist profligacy of today

Ludwig, you don't seem to understand that it is mutual benefit that brings the seller and the buyer together.

Whether the wholesaler is importing computer games from China, or cuddly toys from the Philippines, or cans of beans from Mexico, he will need people - retailers - to engage with the public to sell the products at street level.

To do this, he will set up a number of reseller agreements, with prices and volumes stipulated.

If he sets one up with a small retailer, the volumes will be small, but the price per unit will be higher.

If he is able to convince a buyer at a major retailer to display his product, that agreement will stipulate higher volumes, but at a much lower price. In addition, he may also be asked to pay for supermarket shelf space...

So the relationship is highly synergistic. It is in the wholesaler's interests that you succeed.

The standover tactics that you describe are already illegal, by the way.

>>You are forced to buy far more than you want, because there is no regulation preventing this.<<

If we straighten that out a little, you are saying that:

"There is no regulation preventing you from being forced to buy more than you want"

But of course there isn't. Because you cannot be "forced to buy" in the first place.

>>the sort of regulatory regime that will... help prevent retailers from being ripped off, sold substandard stock, being extorted, defamed or undercut by big competitors to the point of making them non-viable<<

It is already an offence to sell me substandard stock, and against the law to extort or defame.

And you can't prevent undercutting, without imposing price control.

Which patently never works.

Think about it.

If I sell those Mexican beans for $2, and the supermarket next door undercuts me at $1.50, what are the price watchdog's options?

Make me sell at $1.50, or make him sell at $2?

You can see who would win out of that, can't you?

We live in a capitalist and free enterprise society and while not perfect, it is better than the alternative with a whole lot of government control. I wonder whether those that complain about high prices and exploitation would not put their money in the best term deposit they could find. Or not sell their house for the best price they could. Perhaps they would like to trade in their car, would they not try and "horse trade" for the best deal ?
If you feel exploited by large companies, why not buy their shares if you think they are making too much money. However you probably own them indirectly through your super and you like to see that going up don't you. If you received a hot tip to make money and it was a certainty, I don't think many would forgo the opportunity while paying little attention to the loser, and to some degree there nearly always is one. The ACCC is a government body that overseas competition and monitors any kind of monopoly. On balance I think they do a good job. Just stop whinging about people who work hard and take a lot of risks. They usually deserve it if within the law.

It's great to read all views and Pericles is right, I do have some specifics in mind.
Themissus nailed it, in her/his first comment for me.

Firstly for those who fear increased Govt power, I fear Govt through pressure of vested interest more and my thought was to reduce their power through simplicity.

If we accept that a price increase at any tier of business should automatically be passed on to the end consumer, should we then also accept, that increases for the end consumer should only occur if the supplier/business can demonstratively prove an increase in their cost?.

Also, if this same end consumer does not receive a salary increase at the same level as inflation at least annually (wage indexation so called) then that consumer/worker is actually experiencing a drop in living standards annually as they work. Their capacity to purchase goods or services from their supplier/business being eroded at the same time their workplace supplier/business does not experience increasing cost through wages. This cannot and should not happen.

These 2 simple rules preserve living standards

If we understood Pericles "that the most desirable future for everyone (including the big end of town), is that we maintain living standards for everyone as they are". " And that we work to try to improve the lot of those with the least opportunity as a goal" then progress would actually be made.

Keeping everyone in the Australian Business chain (especially Corporations) honest (is a small start) that might make progress possible again.

How would business survive such simple understandings?: "by making a better widget", by progress or innovation and not by making or buying the cheapest possible consumer driven item to compete for the attention of the masses to the detriment of the planet etc.

Economics and the environment are intrinsically linked. " The notion that the driver for everything should be the need for the rich to get richer and for those who are not them to aspire to be them is irrational" , and I believe will result in devastation ultimately.

“I'm suggesting that lack of regulatory checks and balances is an encouragement for unethical behavior.”

Absolutely it is thinker 2. And there is no shortage of unscrupulous, aggressive and thuggish people who would take full advantage of a weak regulatory system.

This would also force otherwise decent people to undertake the same sort of practices if they wanted to survive.

---

“…short of Ludwig's centralization of the means of production…”

Hey what, Pericles?

It would seem as though you don’t understand my position at all. All I’m advocating is a somewhat stronger rule of law…just to shift the balance a bit in the favour of better regulation and away from free-market influences and the sort of inequalities that we see if the aggressive and unscrupulous have too much room to move. You appear to be attributing an extreme socialist or control-freak position to me. It ain’t the case.

Of course this sort of thing is a difficult balancing act, and one that is in constant flux. It is one of the great thorns in the side of every first-world government.

Yes there are downsides to too much regulation or the wrong sort of regulation. But that’s just got to be weighed up against the downsides of having a market system or business sector that is too free and lawless.

----

“Regulations always impose a compliance cost on business, usually greater on smaller businesses.”

Sure they do Shadow Minister. But what would the cost of no regulations or poor regulations be? Potentially much greater in most cases I would think.

That’ll do for now. I’ll delve deeper into this subject tomorrow.

If we accept that a price increase at any tier of business should automatically be passed on to the end consumer, should we then also accept, that increases for the end consumer should only occur if the supplier/business can demonstratively prove an increase in their cost?.

Wow, wouldn't this be a great idea, i'm all for it but in reality it just won't work.

There are simply to many viriables in running a business and, many small business owners, butchers included, have cut their margins for years to a point whereby many businesses make less today than they did 10 years ago.

Of course there are those who simply say, 'don't be in business then', boy, I sometimes wish it was that easy.

people who fail to plan will always be at the mercy of those who do. A lot of Christmas stuff can be brought cheaply if you don't leave things to the last minute. no one is going to starve at Christmas here in aussie so why the complaints. If you are desperate ring up the numerous aid agencies for a handout. I hope the business's that have to put up with all the Government red tape prosper. No one is forcing anyone to buy anything. Maybe some can celebrate Christmas a week later when things are cheaper. No one says it has to be 25 December.

Guys, please. I'm not for a moment suggesting that there aren't some unscrupulous elements out there in business-land.

But what I am suggesting is that the imposition of even more regulation on business is not necessarily the answer.

One of the reasons for my concern, by the way, is that every new addition to the game of red tape that we already play, works to the advantage of the big end of town, who have the staff to absorb each new piece of "consumer protection", or "compliance", or whatever.

thinker 2, this would be really nice...

>>my thought was to reduce [government] power through simplicity.<<

I'd be genuinely very interested to hear how you think this could be managed.

>>increases for the end consumer should only occur if the supplier/business can demonstratively prove an increase in their cost<<

Uh oh. Even more paperwork. And are you allowed to include additional staff costs as a component of that increase?

Ludwig, I apologise if I misunderstood you.

>>All I’m advocating is a somewhat stronger rule of law…just to shift the balance a bit in the favour of better regulation and away from free-market influences and the sort of inequalities that we see if the aggressive and unscrupulous have too much room to move. You appear to be attributing an extreme socialist or control-freak position to me. It ain’t the case.<<

Actually, it is partly your fault for not being specific.

Warm waffly words like "better regulation" really don't help, so it would be more illuminating if you could provide examples of what you have in mind. In their absence, I can only think you mean that government controls prices, which would lead to controlling distribution, and eventually production as well.

So do tell, what improvements could you see making a difference?

“Ludwig, I apologise if I misunderstood you.”

Cheers.

“Actually, it is partly your fault for not being specific.”

I don’t think so Pericles! If you’re not sure about one’s position then seek clarification, don’t jump to conclusions.

“…what improvements could you see making a difference?”

I’m talking in broad generalities and principles, not specifics. My basic tenet is that we need a good rule of law that everyone understands, that applies equally to all, for which the penalties for breaching is clear and the chance of being stung if you break the rules is high enough to act as a real deterrent to just about everyone involved.

That’s the basis of it.

I’m not a businessperson. My major concern with the law has been regarding road safety, in which I see the most disgusting misalignment between the law, general practice and what is policed. Some rules are good, some are just stupid. The police turn a blind eye to all sorts of significant infringements and then take a zero-tolerance approach with some really trivial things. If you are subjected to dangerous antics on our roads, there is stuff-all that you can do about it. The police just don’t want to know unless an accident has actually occurred. It disgusts me to the core.

This is where my concern about a very sloppy rule of law evolved from.

It really is just the same principle with business and indeed the whole of society, is it not?

Before I continue, can you indicate Pericles whether you agree or not with this basic philosophy?

Ludwig,

The cost of compliance is a cost of doing business, it is tax deductible, and will mostly be passed on to the customer, not to mention a cost to the government to enforce. So unless there is a significant benefit to the public, the socialist impulse to regulate everyone to death needs to be curbed.

Secondly, as I mentioned before, the big retailers already have compliance officers, so the cost of compliance is relatively smaller, but for small retailers, it is relatively large. This would put further pressure on small retailers and put many out of business, which, I suspect, is not what you intended.

Understood Shadow Minister.

As I say, it is a balancing act, to come up with the right sort of regulatory regime that works effectively in the best interests of all operators without costing them or the end consumer too much.

In many ways our regulatory regime is good. But in many ways it could no doubt be improved.

If it is anything like road rules, which I’m sure it is, then if we just put our minds to it and had our hearts in it, we could greatly improve the whole caboodle very easily and painlessly.

Part of a good regulatory regime is to strive to make the costs as even as possible. Again, if we put a bit of effort into it, I’m sure we could devise methods of evening out the costs somewhat.

Ludwig, if you took some responsibility for the clarity of your position, I wouldn't have to make assumptions.

>>Before I continue, can you indicate Pericles whether you agree or not with this basic philosophy?<<

Which bit is philosophy, Ludwig, and which is commentary?

>>My basic tenet is that we need a good rule of law that everyone understands, that applies equally to all, for which the penalties for breaching is clear and the chance of being stung if you break the rules is high enough to act as a real deterrent to just about everyone involved.<<

That, I agree with.

And also believe exists.

>>I’m not a businessperson.<<

That of course does not disqualify you from holding a view. Just as I'm not a dentist, but can certainly determine whether my teeth still ache after a session in the chair.

But it does make it a little difficult to discuss specifics.

>>My major concern with the law has been regarding road safety, in which I see the most disgusting misalignment between the law, general practice and what is policed... It really is just the same principle with business and indeed the whole of society, is it not?<<

Not sure that is a convincing analogy, except at the highest level of generalization. And as I have said, at that level, we disagree. Our laws are on the whole enforced, and enforced consistently.

Can we now talk specifics, please?

Because this is far too vague to be useful:

>>Part of a good regulatory regime is to strive to make the costs as even as possible. Again, if we put a bit of effort into it, I’m sure we could devise methods of evening out the costs somewhat.<<

"Costs?"

In order to "make costs as even as possible?", you have to determine which costs you are talking about, within which community they need to be made "even", and also determine a measure of "evenness".

The you need to build it into a regulatory framework.

Leaving aside the regulatory framework bit, can you expand on the problem you have with costs?

I tend to think we have become a far more greedy society, we have been dehumanised to some extent into economic units and we have lost to some extent the idea of community and helping each other out. It is not only business that is greedier (no longer content with a healthy profit) but consumers.

Consumers have more power than we give ourselves credit for. We don't use that power. How many Westpac customers will move their accounts to another bank in protest to recent rate rises? Not many I suspect. We have become too lazy.

Imagine if all bank customers for example said we are not going to take it any more and moved their accounts to a smaller bank that does not use overseas call centres, that does not overcharge and keeps in line with RBA interest hikes.

Sadly there probably is not much choice in that list but consumers can't just whinge about prices (which is fun I know) we need to choose not to buy goods if the prices are outrageous.

It is more difficult of course when there is collusion on price rises and on goods that we depend on, such as fuel and food. But even there we can make choices to grow our own, buy at local markets and choose Australian Grown. Another example, if one doesn't like GM, don't buy GM (assuming labelling has integrity).

There is no doubt that criminal activity is occuring in big business today and little to protect even with the regulatory regime we have in Australia. Look at the HIH debacle despite warnings from insiders prior to the collapse, Visy price fixing etc.

“Ludwig, if you took some responsibility for the clarity of your position, I wouldn't have to make assumptions.”

You didn’t ’have’ to make assumptions. There are no excuses for jumping to conclusions. If there is any doubt about someone’s position then simply ask questions in order to seek clarification.

Pericles, you and I have been over this sort of turf before. I didn’t think that I needed to clarify the most basic level of my position.

But it became apparent that I did, which is exactly what I have done, right from scratch, in my last couple of posts. Of course, that is highly generalised.

Ludwig – “My basic tenet is that we need a good rule of law that everyone understands…”

Pericles - “That, I agree with.”

Great.

But then you wrote: “…at the highest level of generalization …. at that level, we disagree.”

I’m confused. This seems to be totally contradictory.

“Our laws are on the whole enforced, and enforced consistently”

Oooow, I’ll have to vehemently disagree with that!

“In order to "make costs as even as possible?", you have to determine which costs you are talking about, within which community they need to be made "even", and also determine a measure of ‘evenness’ ".

Of course!

“The you need to build it into a regulatory framework.”

Absolutely!

“…can you expand on the problem you have with costs?”

Thanks for seeking this clarification. Shadow Minister made the point that the costs of compliance are likely to be greater for small business compared to big companies. So as you say, in any regulatory framework, we need to be aware of that and build in mechanism to even out the costs, if possible.

Of course regulation has a cost. But it has just got be balanced up against the potential costs of having no or poor regulation, as I have said in a previous post.

I think we’ll find that our positions are not really too far apart.

This is all still very generalised. What specifics did you have in mind?

Ah yes, most of us know nothing about running a business. Not enough do otherwise there wouldn't be more businesses gone broke than there are businesses in business.

Hi again all. If we started small and again indexed wages to match inflation, if we again recognized a recommended retail price( not the all year round fixed price described by rehctub) but maximum ethical retail margins, then living standards could be maintained:

Ethical margins could be understood by all parties as actually representing the best interests of all parties. Business could still compete for greater market share through excellence. As I said before "by making a better widget", providing a better service etc

To examine the ethics of margins, lets take the banks; "even though they produce little" the fee's and charges they enforce are often for the cost of data transfer from one terminal to another as in the case with them dealing with each other for example. I assume that this data transfer costs them practically nothing!.

Adding a extra middle man (for fun and profit) between the consumers/workers and access to their own money adds nothing to the economy or the social structure yet we think this appropriate (even justifiable) business practice?.

Who is beneficiary to such regimes?. Do they really think producing little more than extra terminals or even less, and charging like wounded bull's for it, represents the greater good?. And in a regulatory sense , why do we allow such latitude in banking practices in the first place.

Let's have a holistic conference on where we're headed. Lets include the ethics of business and make it part of the mix, part of the economic/environmental success formula. Let's help business, consumers and working people, understand "what it is that we should be expecting from each other".

Red tape would not be increased by a process like this, not if based on fundamental commitments/understandings by all parties in the first place.

Ludwig, I doubt we can move this conversation forward until you make your position clear.

>>But then you wrote: “…at the highest level of generalization …. at that level, we disagree.” I’m confused. This seems to be totally contradictory.<<

Not if you read what I wrote.

"Not sure that [road safety] is a convincing analogy, except at the highest level of generalization"

That does not contradict my agreement with your position "that we need a good rule of law that everyone understands".

Which is, let's face it, simply a "motherhood statement"

>>Oooow, I’ll have to vehemently disagree with [our laws are on the whole enforced, and enforced consistently]!<<

We might get somewhere if you explained a little more your "vehement disagreement". Which laws are not enforced, or not enforced consistently?

Your concern over "costs" seem to be exclusively in the area of compliance. However, compliance costs will inevitably be skewed against the smaller operators. It is a fact of their lives. The very idea of adding more regulations to the already ludicrous burden sends a collective shiver down their spines.

>>Of course regulation has a cost. But it has just got be balanced up against the potential costs of having no or poor regulation, as I have said in a previous post.<<

What you still haven't explained, is where you believe the extra control is needed, i.e. replacing "no or poor regulation".

And this is not going to get out of the starting gate, I'm afraid, thinker 2.

>>If we started small and again indexed wages to match inflation, if we again recognized a recommended retail price... but [enforced?] maximum ethical retail margins, then living standards could be maintained<<

A purely mathematical formula, that cannot work in the real world without massive government intervention, the only possible result of which would be to jack up retail prices by driving the small operators out of business and leaving the field open to the monopolists/duopolists.

If you then tied wages to the CPI, you'd have the most rapid inflation in the world before you could say "Zimbabwe".

I will agree, thinker 2, that the blatant profiteering of Banks is disappointing, and is a real cost to each and every Australian. Their only saving graces are i) their gouging gave them a greater cushion against the global banking sickness we have just experienced and ii) they are a significant component of most Australians' superannuation funds.

Apart from that, they are acne on the face of business ethics.

However, I think you might be taking a somewhat simplistic view of their role in the economy.

>>Adding a extra middle man (for fun and profit) between the consumers/workers and access to their own money adds nothing to the economy or the social structure yet we think this appropriate (even justifiable) business practice?.<<

If the function of Banks were simply to act as a storeroom for your cash, then the concept of a "middle man" would be restricted to the function of a teller, counting the money in, and counting it back out again.

However, Banks provide a great deal of the oil that metaphorically facilitates the rest of the economy to grow. Some of this comes from your deposits, but a great deal more (ask Arjay!) comes from their ability to lend a multiple of their reserves.

One of the most painful impacts of the GFC on small business (in the UK and Europe, at least) was the sudden, economy-wide retraction of lines of credit, just in time for the 2008 Christmas period. It had a most dramatic effect, with shops closing down one after the other, till the high street of the average provincial town looked like a Louisiana grin.

>>And in a regulatory sense, why do we allow such latitude in banking practices in the first place<<

Where do you believe the latitude should be decreased, thinker 2? And who would benefit, and who would lose, from the increased regulatory oversight?

As I've said, I am not a great fan of the Banks. But it is important to be realistic.

“Ludwig, I doubt we can move this conversation forward until you make your position clear.”

Pericles, that’s just silly. I’ve made my position abundantly clear. That’s turned me right off. If I’m not coming across clearly to you by now, then I give up.

I’ll just reiterate:

Ludwig – “My basic tenet is that we need a good rule of law that everyone understands…”

Pericles - “That, I agree with.”

P - “In order to ‘make costs as even as possible?’, you have to determine which costs you are talking about, within which community they need to be made ‘even’, and also determine a measure of ‘evenness’ ".

L – “Of course!”

P - “Then you need to build it into a regulatory framework.”

L – “Absolutely!”

I just don’t see any real point in going beyond this. We basically agree and that is good enough for me.

We just seem to have different positions on a sliding scale as to the point of balance between strong regulation with its more or less constant and even costs, and weak regulation with lower ongoing costs but with its risks and potentially much bigger negative consequences. I can live with that.

This sort of stuff is terribly difficult to balance and is one of the big frustrations for governments and societies around the world.

As for the road safety stuff; I’ll be starting general threads on that subject. So we’ll discuss it there.

That's a cop-out Ludwig, and you know it.

>>We just seem to have different positions on a sliding scale as to the point of balance between strong regulation with its more or less constant and even costs, and weak regulation with lower ongoing costs but with its risks and potentially much bigger negative consequences. I can live with that.<<

The thing is, we don't actually know whether we have different positions. Nor where each of us sits on that imaginary "sliding scale".

We could be in violent disagreement - or even violent agreement - for all you know.

Because you haven't actually said, anywhere, what it is about the current regulatory environment that is broken, or could be improved.

Simply stating the obvious - "a balance between regulation and costs is a good thing" - tells us absolutely nothing about where you see that things are out of balance.

The reason I have taken it this far is because your approach is mirrored, time and time again, by public servants at every level of government, who want change for change's sake.

They want to be able to say "look, I actually tried to do something about it", when in fact they haven't the faintest clue as to what works, what doesn't work, and - above everything else - they lack the ability to work out the consequences of their actions.

>>This sort of stuff is terribly difficult to balance and is one of the big frustrations for governments and societies around the world<<

I'm willing to bet that you would not even be able to justify that statement, with anything more than the blandest of generalizations.

Have a nice day Pericles

Remember the old Red "BULLETIN"? it had a page headed "Business, Robbery, Etc."Has anything changed?