Buying a Bass: Perfect Markets and the Internet

via weheartit

I’m thinking of buying a bass guitar. I could go to a music store where I could try out a few different basses and get the recommendations of the salesperson. Trouble is, there is only one music store in the entirety of Canberra, so I might be told an inflated price because there is virtually no competition. Further, I suspect the salespeople may be paid on commission, so the information they might give me could be biased towards getting a higher profit margin or a free gift from a specific guitar manufacturer. I don’t have very good information on what would suit me, and since I don’t really know any bass guitar plays, I don’t think I could ask a friend for advice.

So, I’m going to the internet! The internet has hundreds of review websites where a range of people write reviews on every aspect of any bass guitar which is widely manufactured.

There are many more instances where the internet has helped me in buying stuff. When I went to the USA, I based my decisions about which hotels to stay at from website reviews. I choose which ebay seller to buy from based on internet feedback. I bought my computer after looking at a range of review websites. Suddenly, I have very good knowledge of pricing and quality.

One of the things that neoliberalism strives for is what’s known as a perfect market. A perfect market has the following features:
– little/no government intervention such as tariffs and subsidies.
– little product differentiation (for instance, if two products are exactly the same, in a perfect market brand names will not make a difference as to which product someone will buy).
– Lots of competition, lots of people selling the same things at competitive prices.
– Ease of exit and entry (e.g. if a market is unprofitable, someone can just start selling something else and likewise, if a market becomes profitable, it’s easy to start selling something)
– And, as this post concentrates on, perfect information – buyers know all about price and quality of different products.

In this way, the internet is a vehicle for neoliberalism to achieve parts of its aim. That is to say, because the internet has so much product information, much of which is completely independent, it allows people to enter markets with perfect information and therefore acts in the interests of a neoliberal ideology.

One Response

  1. […] spoken before about how the internet provides a very useful way to achieve the ideal of a neoliberal perfect […]

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