Competition

The point I am trying to make is that evolution does not look for the best solution: it only works by being "good enough". It has to build on what went before. I am not trying to say that the complexity is not impressive or anything. But efficient? You ever watch those films of turtles hatching? The attrition rate is very high: as it is for a whole lot of things which produce huge numbers of offspring at great cost to the adult, most of which get eaten while still very young. Human reproduction uses a different strategy, but it still results in high maternal and infant mortality, left to itself: and pregnancy does immense damage to the female body: that is also a very high cost. Yet we are told that reproduction is the "aim" of evolution.

Those two different strategies are both the result of evolution, and they are equally good (or equally bad, I would say). So the first thing that is obvious is that there is no "optimal" solution: there is only "what works". Turtle attrition works for seabirds: but that is not really what turtles might be guessed to want. Maybe they do. Maybe they say to themselves: I will lay 300 eggs so that the birds can have dinner on 250 of them: and I will be the proud parent of 50: win/win!. But if they think that then they are not into competition at all: for looked at in another way that is a real committment to altruism, or at least cooperation with other species at the expense of the baby turtles.

If we did want to use an analogy drawn from the natural world it is just as possible to do it with different result. We can say that the turtles are the people and the seabirds the corporations. The turtles produce goods (baby turtles) for their own purposes: and the seabirds eat them when the turtles aren't looking. They don't eat them all; they need to ensure there is a continuing supply of turtles, so some survive: and the turtles do not know the rest are eaten, so they think things are going ok. That is, of course, market equilibrium. Lovely!

The baby turtles compete with each other:they don't compete with the seabirds. One can say the seabirds compete with each other and maybe they do. But it is equally possible for them to divide up a territory and claim exclusive use of the baby turtles in their bit: seabirds don't do that with turtles, for the turtle rush is time limited: but other predators do. And we are famliar with the benevolent image of the shepherd looking after the sheep. What the sheep do not know is that what they have to fear is not the wolf, who will limit his consumption if left in peace: but the shepherd. The shepherd is exactly like the seabird. He intends to kill every last one of them consonent with securing supply. And he agrees with all the other shepherds not to encroach on their flocks.The shepherds do not compete, unless things go badly wrong for them

Edited by FionaK - 24/1/2012, 11:46

As I already said, the elevation of "competition" to a magic word puzzles me. What is missing is narrative, very often. What I mean by that is a coherent story which ties things together. Because "competition" is assumed to lead to good outcomes there is seldom any outline of how it will do this. We are to take it on faith. That is not to say that there is no such story: maybe it is there and those who promote it think it is so self evident that there is no need to join the dots. In this they are mistaken. I cannot be alone in finding the proposition so bizarre that it needs some explanation: though by now I may well be in a minority, since it is well known through advertising that repetition becomes persuasive in itself, eventually.

Competition cannot exist without at least two things being in place: choice and information. The idea is that a number of suppliers all offer things which meet a need or satisfy a want: and the person who wants those things makes a choice about who to buy it from. That is the minimum requirement, I think.

Let us imagine those who can afford morning coffee make it at home and drink it there. Some enterprising individual realises that a great many of those people would prefer to go to a cafe and have their coffee there. They are able and willing to pay a great deal more for that coffee than they do at present, so there is profit to be made by opening a cafe. Our enterprising individual therefore opens a cafe. Now those who drink morning coffee have a choice: they can make it at home, as before, or they can go to the cafe. Leaving aside those who cannot afford to go out, some proportion of those who can make the choice now go to the cafe: and if there are enough of them the cafe owner makes money.

Other people notice this and they realise that this one cafe cannot supply all of those who want to have coffee out. So they open more cafes and now there is more choice. The coffee drinkers can choose to make it at home, or to go to one of a number of cafes which are now open. Their choice has expanded: sort of. On one level they can stay in or go out: but now, having decided to go out, they can go different places.

They make that choice on the basis of information. Information is complex: it includes a whole range of things which are important to different individuals. The most basic of those is often overlooked: it is important for the coffee drinker to know that any given coffee shop will not poison him or give him disease. At the outset this can presumably be done through trial and error: a lot of folk will get sick and some will die: but that is ok, because through the magic of the market the cafes which kill people will lose trade and go out of business. It is a shame that that will arise time and again, because there is a lag in the information becoming available: but that is what a free market implies. In practice, of course, we assume that the state will intervene, through health and hygiene regulations, in order to ensure that cafes do not poison us, even for a short time. The magic of the market is not really enough for us, and we take for granted that somebody is making sure they meet the minimum safety standard. Once we have taken that for granted we lose sight of the fact that it is state intervention which keeps us healthy: and we listen to the siren voices which say that these regulations are unecessary and are pushing up prices: we, cynical in other areas, somehow believe that cafe owners will take the essential steps without them being imposed: even if the steps are not intuitive and so can be missed through ignorance: even if failure to take them only results in epidemic some of the time, and the risk is low enough; the profit high enough, to make them take that risk. The typhoid outbreak in Aberdeen is famous: the risk was low. The hazard was huge. It happened. It has always happened. That is why we have health and hygiene law. Without it there is no doubt that people would withdraw their custom from some cafes through the simple and effective mechanism of being dead. The competition and the market will indeed close those cafes down. So that is all right, then? Hardly.

Other information is also important: quality, price, location, ambience, service: all sorts of things. These are things we can know. We go to a cafe and we get that information just by being there. So we can exercise our choice on the basis of that knowledge: and we do. We weigh those things as seems good to us.

There is other information we do not know: and they are not important to us, or so we are told. For example the profit being made is not known to us: or the structure of that profit. I understand that in some countries that can be known, because tax returns are open. Not in the UK. It is accepted that if we choose on the basis of all those things we can know, that is enough: it is none of our business how much the cafe owner is making off our money: though I rather think it would be something at least some people might like to include in their calculation. It is arguable that we include that by including price: but we don't. Price is only one element of profit. Currently "workfare" is an issue in this country. To me that demonstrates that some folk do care about the composition of profit: in the case of workfare it is obvious that those businesses which get the labour for nothing will make more money than those which don't. But personally I prefer not to support businesses which employ slave labour: so I need to know about that. I do know something about it in the case of workfare: but only through the efforts of people who have worked hard to let me know: not journalists, for the most part although they are now involved. I only know because government is directly involved as well: when it is private I cannot know. From time to time there is scandal relating to cockle pickers who die; or fruit pickers who are paid below the minimum wage; or servants who are abused and have no recourse because of their immigration status. All of this goes on and occasionally there is a tragedy which draws it to attention. But not very often. If the shell fish or the fruit ends up in my cafe of choice I cannot factor that in because I do not know about it.

All of these things will happen naturally because of competition. If the cafe owner gets cheaper supply through abuse he will often take it: not all will, because they are people, and so they have values too: but they will not necessarily know either: and in any case, if even one or two of the cafe owners have no such scruple any values will be quickly eroded. Bad money drives out good: and exploitation drives out fair wages etc, in just the same way. Once again we rely on state regulation, and once again we don't notice the benefits a lot of the time: instead we hear that minimum wages are killing jobs and that red tape is hampering the optimal outcome that comes from free competition

Other things we do not know include the fact that apparent choice is apparent: as the soap powder in the OP shows. Well, you may say caveat emptor. If I buy coffee at cafe X because I think the brand is better and am prepared to pay more for it: then if the coffee at cafe Y is identical, but unbranded, blame my snobbery, or whatever. Clearly I am not wholly motivated by money (folk aren't in the end) and I am meeting some other need or want: my choice. But what about my choice to take umbrage against a particular business practive: like forced labour? I take my business elsewhere: only it happens that Cafe Y is owned by the same people as own Cafe X, and I don't know that. Tough, really.

In the case of cafes, the information we have in incomplete: but it is sufficient, arguably. Let us say that, for the sake of argument. We get lots of cafes and they don't poison us and we can choose, within the limits of our purses, what kind of experience we will have, on the basis of quite a lot of information. Fair enough. Perhaps there will be no cartels and the price will fall as low as it can go at each band (for not all cafes compete with each other: the cafe at the Ritz competes with that at the Savoy; it does not compete with Luigi's in Hackney: and not just because of geography)

This model can be said to work ok for those things we can have good information about: but it fails with things we do not buy often. For example, if I want to buy a carpet. I do not buy a carpet very often: it is a major purchase and it is also very disruptive to get a new carpet. But what that means is that I have very little information to bring to the table: actually almost none. I can draw on my mum's experience and that of my friends. I can know which manufacturers have a "good name" maybe: though I cannot know if they acquired it in time past and have since changed the quality so it is now rubbish. I can assume "you get what you pay for" and so judge on price. But I really know nothing at all about carpets. I have plenty of choice. There are loads of carpet shops. But no information. In this case the choice becomes an imposition, and I guess: I decide the colour I want cos I have that knowledge: and I listen to a salesmen with an interest in selling me what makes him most commission: and I hope that if it is dearer that means it is better. I can use consumer guides like "Which" and that might help: but its very existence shows what is wrong with this fairy story of choice and information.

What applies to carpets applies to health care: in spades. It is presently argued that competition will improve health care in this country: to date "internal competition" and in future unlimited competition. It is argued that giving me a choice of where I get treatment will impose "market discipline" and that this will make the service better.

Well what we already know is that there is such a system in America: it does not produce cheaper health care: quite the reverse. It does not produce better outcomes, in terms of health, either. So the question I am asking is what is the story which joins the dots between competition and inevitable improvement? Since the best example we have shows the opposite what is the mechanism, the narrative, which indicates that example is not applicable, and some other outcome is to be expected?

Competition requires choice. So there must be a range of providers so that I can choose. Well, in the case of GP's I already have choice: there are a number of GP's within easy reach of my home and I go to one of them. I registered at that practice because it was close by. Since we have a national health service no other consideration entered into it. I am aware that some doctors are better than others; and some are better at some things. But that is theory. In practice I have absolutely no way of knowing whether the doctor I see is good or bad. What I do know is that he is better than me, and that again depends on state regulation. He has studied and he has passed exams and he has done clinical work under supervision of more experienced doctors. He undertakes regular training to keep up to date because the state requires that. He has access to more experienced colleagues, and to specialists if he needs them. If he is not very good maybe he uses those resources more than someone who thinks they are good and is maybe a bit arrogant about it? How would I know? My choice is meaningless: and if it is argued that "league tables" will help, well no, they won't. Since if I am seriously ill I have no idea what is wrong with me, how will a league table help? A general figure is useless to me: but tables based on particular illnesses is just as useless. Fact is that I will choose a doctor on geography and, probably, on whether I like his manner: which is a chocolate teapot so far as exercising choice related to medical considerations is concerned. In face of this where is the counter story showing that competition will be useful to me as a patient?

What about hospitals? I now have a choice about which hospital to go to, because competition is a good thing. How does this help me? Let us say I am knocked down in the street or have a heart attack: there I am, lying on the pavement and an ambulance is called: the ambulance people do first aid and then they say: where do you want to go? What am I supposed to reply? A good consumer, I have wasted hours of my time reading league tables etc and I know all the stats for the hospitals. But if I am in a rural area there is only one. If I am in a city there may be several: and you know what? I don't care: I want to go to the one which has a bed. For competition to work they must all have a bed. Even in the case of cafes I cannot always get a table: so what are the chances of that? Well they are high if we have a lot of surplus capacity. But over decades we have been pursuing "efficiency" by reducing that surplus below the level which is actually required for prudence: now we must needs reverse that process. And both policies are to achieve the same end: cost cuts and increased "efficiency". Two diametrically opposed aims will produce the same benefits: curious, isn't it? Or maybe it is a lie. Who knows? When they give us the narrative maybe it will all become clear.

Ok that is emergencies: less urgent treatment is different and now we can choose. Choice will make things better there, at least. Once again I cannot have choice unless every treatment centre has spare capacity: or unless I am prepared to wait to get the hospital of my choice. Oh..wait. Waiting for non urgent treatment is a bad thing: in fact one of the major critcisms of the NHS. So I cannot be expected to wait for my hip replacment: I must have it done quickly AND have it done where I want. So assuming I am informed enough to make a choice (unlikely even with league tables, as Circle well knows: their spiel shows quite clearly that they expect me to choose on the basis of the "hotel" aspect, not the medical: and they are right) all facilities must have a bed for me at the same time. I will fill one of them. Are the rest to lie empty? They have to: because otherwise my choice is non-existent. What then? Having wooed me with better food and nicer pictures on the walls I will go to that hospital: since they get a lot of business the extra costs of the hotel facilities will be offset by more "business": so that is all right. And the other hospitals will close: oops, there goes my choice. Relax Fiona, the successful hospital will take it over and make it better and then you will choose that one and all will be well. But still I can only occupy one hospital bed at a time: so still some will lie empty if I am to have choice. Hmmm...what we need is more demand: I better get sick more often: or be told that I am sick, at least. Couldn't happen.....could it? Once again, look to America. Comfortably off people seem to have a lot of tests etc we don't have: this is said to be fear of litigation: but remember, everything can be reduced to supply and demand.....

In short, even if it is accepted that competition is a good thing I cannot see it is applicable to important things like health. Not in theory and not in practice. So what I want is some evidence or even just a coherent story as to why it would be. "Competition is good" is not a story. It is a slogan

Just to clarify: there are explanations for why competition is beneficial, and there are counters to that as well. They look like this:

In an n firm industry where the output of the ith firm is qi, this assumption means that d qi/d qi = 0 Vi =/=j. As a result dQ/ dqi =1, and hence dP/dqi = dP/dQ: etc

The simple equations and discussion of them are contained in Steve Keen's paper here;

www.paecon.net/PAEReview/issue53/KeenStandish53.pdf

I am going on holiday for a week: that should give you plenty of time to read and understand the justification, and the counter argument: When I get back I expect to read a translation into english: thanks in advance

The benefits of competition in practice in another field....

http://ht.ly/e3H5g

Lots of people making profit from one thing: bound to be cheaper and more efficient?

The Leveson report covers a great many things and it does so clearly and, so far as I can tell, comprehensively. At least it touches on most of the things I can think of as relevant with none of the truly glaring omissions I normally find in the media: it is, in that sense, an embodiment of some of the things it is addressing.

One of those things is the magic word "competition". As with other big words it considers the meaning and application of that word without the prior assumptions discussed above; and to that extent is helpful in clarifying my thinking

An important element of that is the separation of the notions of competition and plurality. This is one of those conflations which is often not made plain in discussion but which is of crucial importance in considering the role of the press, as well as in many other areas. Much of what he has to say is not news: you are aware of it when you stop to think. However the terms of the mainstream debate do not encourage that thought and as is often the case the logic follows inexorably from the premises: if those premises are wrong the conclusion founded on it is also wrong (or right for the wrong reasons) and nothing can save it. Addressing premises is variously discouraged: it might be characterised as pedantry; or as changing the subject; or as idealistic; or as obfuscation. It is none of those things, and if we are to think at all we must return to those assumptions from time to time. If the premise is that the sun does not go round the earth we can accept that as established (though not certain, it accords with a great many objective facts and it gives rise to predictions which hold true): but social and economic and political assumptions are of a different sort and they have no such legitimacy. Scientism is one of the great evils of our age and its sway is used to pretend that there is only one kind of "fact" when that is pretty obviously not true.

Leveson points out that the freedom of the press is not a good in itself, and I think that is important: so important that it is depressing that it not only needs to be said but it needs to be argued. But it does and he argues it effectively. Press freedom is not a good in itself: it is instrumental, rather. It follows that it may be a necessary condition for the true "good" it serves, but it is not a sufficient condition. This is the first level of conflation, well rehearsed by those with a vested interest in obscuring the distinction.

In turn the notion of a "free press" is itself rendered obscure because of a particular set of political assumptions ( some would argue those are pragmatic assumptions, and that may be true to some extent: but the case needs to be made and not taken as a given). So we have to ask what we mean by a free press, in its ideal form. It is interesting to me that the idealised conception of a free press is perceived, at least by some, to be realised (or realisable) through the internet. That is to say that a truly free press would enable each and every citizen to express their view on every subject with equal access to any potential audience. The very interest and popularity of that aspect of the web speaks to me of an inchoate but deeply felt lack in current media arrangements: a lot of people do not feel that the existing media speaks for them, or that it represents their views. If the purpose of a free press is to ensure that at least most people are represented it seems to me that the existing media are failing. The widespread support for things like the Occupy movement and the possibilities of dissent through such single issue campaigns as Hacked Off demonstrates that.

Of course once such a grass roots movement gains a critical mass the mainstream media will report it. But it has long been the case that those movements have had difficulty in reaching that mass precisely because the view expressed is not represented in the media. Most dissenting views complain of lack of media coverage for their events etc. In the past that could be dismissed as the whine of those without popular support: the internet has made that dismissal less credible, and less effective.

What that points to is a failure of plurality: it is not the same thing as a failure of competition for reasons Leveson gives. It is perfectly possible to envisage a company with great market share which yet does not abuse that power to drive out other providers, or to prevent their entry into a market. Indeed if the underlying theory of the benefits of competition hold true that must happen in some instances. If company A produces soap powder which is demonstrably better at getting clothes clean; is also better for the environment than all of its competitors; is substantially cheaper than those rivals; and loads the washing machine optimally all by itself, then competition theory dictates that it should swiftly establish a monopoly without any abuse of market dominance at all. There would be nothing wrong with that on the face of it. But we just know it is a bad idea. That knowledge is pragmatic. What we actually know is that this is very unlikely to be true. But that does not help us with the theory we say we support; for that is a possible outcome and according to the magic of competition it should be an inevitable end point for quite a lot of things. What we do not like is the idea that we are then entirely dependent on that one supplier for something we believe we need: we do not think that the price or other benefits will remain without competition: and you have to ask yourself why not?

That aside, it shows that the "value" which is described as competition is not the same "value" which is described as plurality. And sometimes they are at odds with each other. Where they are at odds we sometimes prefer plurality over competition: and that is worth thinking about. Companies know that: it is why the apparent choice in soap powder referred to in the OP is there. It is obvious that it would be more "efficient" (another magic word) for each company to acknowledge all the products it owns and to rely on real differences in performance to support their different offerings: but they don't. Branding is important for reasons other than competition on performance: choice is a "good" in itself and if it is not available the illusion of choice will do.

There are rules to preserve plurality specifically applied to the media. In this country, as Leveson shows, many of them have been sacrificed on the altar of deregulation. The history of that process he presents is instructive and worth a read, if you are interested. But the main point is that what counts as plurality is a political assumption, allied to what is described in the "rights" thread, as a privilege right. It is presumed that if there is no legal barrier to setting up a newspaper or a broadcast outlet then everybody is equally able to do that: which rather ignores a lot of genuine constraints; both direct and indirect. The most obvious of these is money.

Again Leveson sets out some very pertinent information about that: he gives a list of the financial out-turns for the print media, for example. He does that in the context of demonstrating the difficult financial situation which faces print newspapers (and other mainstream media to a lesser extent) but the important point is this: they are not as profitable, for the most part, as they used to be. This trend has been put forward as a substantive problem for the press and, to some extent presented as a justification for not imposing regulation on them which might increase their costs. That is quite mindboggling, because in another part of the forest we are asked to accept that the clear breaches of the criminal law which led to this furore in the first place were just that: criminal acts already subject to sanction and therefore not a reason for regulating the press, since most already comply. It is quite a mystery to work out how it can much increase costs to have them do what they are already doing: paying for a regulatory body in the form of the PCC is already a cost of doing business for those who sign up to it. I don't really see why an effective body, with statutory underpinning, should be more expensive: after all the press are mostly very keen on the "better service for less money through efficiency savings" which are said to be more than feasible for everyone else. But constency is the hobgoblin of little minds, so I am told......

Chomsky pointed out many years ago that a great deal of the revenue of newspapers derived from advertising. That meant that they could not afford to offend their big business masters, and they did not. In itself that is a major challenge to the idea of a free press, one that was never addressed because of the political assumptions underpinning the scope of that idea. But advertising is moving away from the press now: and that revenue has not been replaced. In the past just over half of the revenue came from sales: but circulation is falling too. The fact remains that entry into this market is not easy and the capital costs of launching a newspaper or broadcaster are prohibitive for most of us. If you see the press as a separate entity independent of big business and government and holding both to account it is possible to justify special treatment for them and that is what they claim: they represent you and me in way that an elected body does not: and, to a lesser extent, in a way that the companies which are subject to our consumer power do not. But you can't have it both ways: they ARE big businesses and so their independence from that strand cannot be accepted: and they ARE powerful and do have unwarranted influence over government (albeit with government collusion) and so they cannot be said to stand free and fearless there either: for back scratching is a two way street.

If instead of slicing the world along the manichean lines promulgated by plutocrats ( that is government and the state v freedom) you slice it in a different way, all of this falls to bits. If, rather than "govt bad/free market good", you consider the issue as "plutocracy bad/democracy good" you come to very different conclusions

Edited by FionaK - 2/12/2012, 13:56

www.bbc.co.uk/news/magazine-20943739

One of the things that most people agree with is that use of market dominance to prevent others competing is a bad thing.

The OP referred to the fact that much of what looks like an open market is in fact a sham: very few companies hide their dominance through the purchase or invention of different brands. We do not have time to research all of this and so it works.

The linked article discusses another aspect of this process: while the purchase of small brands by big multinationals is familiar it seems there is another turn of the wheel. Tesco is opening a chain of coffee shops which appears to be an independent business but is not. There is nothing particularly wrong about this if we accept the earlier process of buying up successful independents, and at one level objection may seem irrational at this stage. Nonetheless I think there is reason to dislike this development. Two reasons, actually.

First, an independent provides a different experience and a different service. By the time it is bought over it has established an expectation of what will be provided, and that may prove to be robust. At least it has the potential for resisting homgenisation, and that can only be good.

Second, I was interested in this from the article


So what are banks supposed to be doing for us, again?

The big supermarkets are already going into banking directly; they are taking over all kinds of businesses from coffee shops to garden centres. While they say they have never hidden this it is not exactly trumpeted, either. Do you know who owns the brands you buy; the shops you frequent? If you happen to have a reason to wish to boycott a company (if they are using slave labour, or not paying tax, or doing something else you find repugnant) do you know how to go about it? Can you in fact achieve it? Remember what keeps these people in check is consumer power, and you are to believe that is an adequate substitute for democratic control.

I fail to see any reason why the ultimate owners should not be the most prominent name on the packaging and the most obvious part of the name. That at least might help, because they are not going to stop deceiving you. As the article notes


Why would there be negative publicity if they were not doing anything wrong? Why should they undermine your "consumer power" to respond to wrong doing in this way?

http://www.rollingstone.com/politics/news/...-mafia-20120620

The link is to a report from Rolling Stone, a magazine in the US, from July 2012. It concerns the trial and conviction of 3 people who were involved in financial scams which were shown to be widespread and which undermine the very notion of competition, as it is normally understood. I did not see this trial at the time, but this article is an example of journalism of a kind I seldom see in the UK: a long and comprehensive account of something important. It is normally assumed that we don't have the attention span to read stuff like this, but this article and the one linked in the NHS privatisation thread show how important this kind of journalism is. What a pity it is so rare.

The article deals with the trial of 3 people who worked for GE Capital, which is the finance arm of a big company called General Electric. As I have mentioned before, many companies which made stuff in the past now get most of their profit from financial speculation: so it is no surprise to find that GE have a finance arm.

We are often told that ordinary people cannot understand complex finance and there is pressure to take such cases out of the normal judicial system which involves a jury: but the fact is that all such scams are pretty simple at bottom, and this was no exception. If you strip away the jargon and the obfuscation it is not hard to see what happened: for this is a version of the scam which makes the perpetrator a fortune by taking one penny from every bank account in the country: nobody notices but the sum stolen is vast.

In this case the money stolen came from the public purse. The basic form is this:

When a local authority wishes to build a school it has to raise money to do that. So it issues a bond. It has to do that through the financial services industry, shorthanded as "Wall Street", and investors put money into that bond. The local authority does not spend all that money at once: because things are built in stages and the payments to the contractors are made when their bit is done. So the money is put into an interest bearing account, and is drawn as payments come due. The local authority is required to seek the best rate of interest on that money it can find: and so there are rules in place which are supposed to ensure that there is competition for the money. The local authority doesn't do that directly: they go to a broker who organises a public auction: banks bid for the money by offering a rate of return on it and the auction has to have bids from at least 3 banks so competition is ensured and the local authority will get the best rate of return the market will offer. That is a legal requirement, in fact

So what happened is that the brokers fixed the auctions. They colluded with the banks to lower the bids. Every bank involved got a slice of the action and so they got the work for less interest than they would have paid had the auction be properly conducted. There is no doubt about this: as with the LIBOR scandal there are tapes of telephone conversations which put it beyond dispute.

The difference is not big: it is a matter of a few "basis points" and a basis point is a hundredth of 1%. But it applies to just about every municipal project for building across america: and that mounts up.

In addition to the direct fraud there is also evidence of political corruption: because the brokers need the local authority to ask them to organise the auction: which they do for really surprising low level bribes, such as tickets for the superbowl to folk in a position to steer the business their way. So there is a nice circle of corruption involving politicians, brokers and the biggest banks in the world. This is not confined to american banks: the bonds are traded internationally and so foreign banks are also involved.

They don't see anything wrong with it. The defence took the view that since the "customer" was not complaining there was no problem. But the "customer" is persuaded that competition is in place and it prevents this: so they do not know they are being defrauded of the money. Once again the magic of the market is relied on to produce good results: and once again it fails because competition does not work. Companies do not like competition, they prefer monopoly. And they are in a position to achieve that unless we have strong regulation: which they oppose

As ever the people who have been convicted in this trial are fairly low level and there there are only 3 of them: the main actors are "too big to fail" and so they do not feature.

If you can't be bothered to read the whole thing have a look at the last two pages: I don't find this kind of thing boring nor do I find it difficult to understand: I find it disgusting, but that is quite a different matter

http://www.policymic.com/articles/71255/10...ol-almost-every

Interesting picture and explanation of how concentrated things are in this world where the spin is about the virtue of competition.