2024-05-10 03:30:00
In economic theory, “free market” is not the same as “free competition.” They may sound like synonyms, but in reality they are very different concepts and, in some cases, even opposites.
For medical sciences, exercising regularly is very important for mental and physical health; In modern economics, there is total consensus that free competition between suppliers ensures an optimal result for the health of consumers’ pockets. Now, for different reasons, free competition cannot always be achieved and in those cases promoting “market freedom” would be counterproductive for consumers.
Recently, President Javier Milei has shown signs of understanding these differences; was observed a few weeks ago when the government presented a precautionary measure against prepaid medicine due to cartelization (that is, by avoiding competition); or when the opening to imports of 150 foods and basic products was announced because local suppliers did not lower prices (in other words, if you don’t compete among yourselves then compete against other foreign bidders).
And ultimately the prices of “things” (be they goods or services) are social constructions, where sellers and buyers pull the rug to get the best cut (some want high prices and others, low prices), and when the The scope of this bid is fertile for competition between bidders, the relative winners are the buyers.
What common Argentinian has not been stunned when, after a call threatening to unsubscribe, they receive a 70% discount on the price of their internet or telephone service? The question immediately arises: So they were scamming me until it occurred to me to call? Scam or not, what was happening was that We hadn’t realized the power we had as consumers until we made the call, and we were paying a high price for our own inaction of negotiation, since competition between bidders would do the rest.
Currently the national government proposes an interesting public discussion on two axes: the funds of national universities and the rates of public services. In both cases you have to know how to clearly differentiate: who pays for it? And how much does it cost?
In the case of university funds there does not seem to be a counterpoint to the first question: all taxpayers pay for it with our taxes (whether we make direct use of them or not); But the discussion that the government would be raising is: and how much does it cost? Because, as in the case of internet or telephone services, taxpayers could be paying bulky or inefficient expenses for the sole fact that no one makes the phone call. to threaten to unsubscribe, or in other words, it would be forcing audits to be arranged to discuss how each assigned peso is spent.
On the side of gas or electricity public services, we are witnessing the decision of a change regarding who pays for it?; Before, a large part of the price was paid by the State (that is, all taxpayers paid it whether we made direct use of the consumption or not) in the form of the famous subsidies, leaving a smaller part in charge of each meter owner; and now the State would be withdrawing from that role.
But the question of how much does it cost?… does not seem to be on the public agenda. In this case, since they are monopolistic services per-se, there is no possibility of free competition, and the fact that the consumer made the threatening call to unsubscribe to look for a better price… no one would believe it, because obviously there is nowhere to go.
It would take the State, with pen and contractual termination clause in hand, to try to renegotiate better conditions. Let us hope that the government acts in this sense, in pursuit of the well-being of consumers. Maybe you can even get a 70% discount on the price.
* Economist. UNComa Professor.
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