Tuesday, April 27, 2010

capitalism and the 9o


i have friends that go to the university of georgia and tell me about nickel nights at the bars. the city of athens, where uga is located, has 96 bars, the most per capita of any college town in america. look it up. with literally millions of students wanting to blackout and make silly decisions every night, these bars have to compete for their services. so they try offer the best product (alcohol) at the lowest cost. this is called competition, a natural byproduct of capitalism (something foreign to america in the year 2010). these bars get conventional and creative, scouting out their competitor's prices and goods. they'll offer special drink nights, like 5 cents for a beer (can you imagine that?), jack n cokes for $1, and other enticing offers that their livers just cannot resist. they'll upgrade their facilities, improve their services, basically do anything to attract consumers ($$$). this is what happens when 96 bars are trying to vie for their services... simple supply and demand 101.
now, the 9o. it's fun, pretty dirty, gets a little too crowded, and i randomly get kicked out for reasons i do not know. that's not the point. they charge $10 for a mixed drink, $5 for beer, and have occasional drink specials that are decent. i'm not arguing these prices are ridiculous (which they are); we're just habitually used to paying them without really thinking about how much were getting ripped off/could be saving.
the 90 has a complete monopoly over weekly night life at usc. everyone goes there for the sole reason that there is no other conveniently located bar to black out. since there is no competition, why would the 9o ever care to lower its prices or upgrade its services? It knows that its consumers are loyal and have no other option but to keep coming back. i'm not saying the 9o sucks, i'm arguing that it could be much, much better. imagine if the row had, say 4-5 other bars, located near the 90. i can assure you that this would naturally force the 9o into a competition for us. the quality of our service will go up and the price of our drinks will go down in a competitive market. i believe that's common sense. who knows, maybe one day we'll be getting 5 cents for a beer if we unleash capitalism/competition on the 90. just a thought.
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other random example of capitalism/stupidity by govt: we complain about how expensive health insurance is. i agree it is (unnecessarily) too costly. there are over 1,000 health insurance companies in the united states. in california, guess how many choices you have when selecting a health insurance plan? the answer: 6. i kid you not. through anti-capitalist legislation, the federal govt. has set up insurance monopolies in each state where a few big wig corporations monopolize the entire industry. why have they done this? you tell me. on top of the irrational laws our govt. has enacted, i am also not allowed to purchase health insurance through another provider across state lines. that's right, i am forced to chose between 6 companies when there are literally a 1000 in the United States. if 600 companies were competing for our insurance plans rather than 6, prices would go down and quality would go up. supply and demand 101. can it make any more sense than that?

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