The First Honest Cable Company – YouTube

The First Honest Cable Company – YouTube.

It’s funny! It’s true! And it shows why capitalism is not the best thing since the invention of language, as most conservatives and libertarians believe! I have repeatedly had conversations with ardent capitalists about the flaws inherent to capitalism for the consumer.  Don’t get me wrong – I am not socialist or communist, I believe that capitalistic systems deliver goods and services to people with efficiency and promote innovation.  However, capitalism is not a flawless system, not even on paper, and requirse outside regulation to perform in the best interests of the consumer.  Oligopolies and monopolies are the epitome of a successful capitalistic company – by eliminating competition through compromising with competitors (oligopolies) or getting rid of them (monopolies) a company is free to charge as much as they want for their good or service and the consumer has no other options.  Good for the company! Limitless profits!  The corporations have achieved a perfect Nash equilibrium! But bad for society in that the consumer is forced to overpay or not purchase the item at all, and such models suppress innovation.  Which is exactly why the government tries to break up monopolies whenever they form, particularly in industries that are considered essential (electricity, communications, etc).   This video claims that oligopolies are legal, but there is in fact a law against collusion, so I am not sure why these cable companies are getting away with this ridiculousness.  Hopefully the rise of online streaming video will one day force the cable companies to rethink their business model.

UPDATE: http://www.nytimes.com/2013/04/15/business/media/more-cracks-in-televisions-business-model.html?pagewanted=1&src=rechp  I’m not the only one that sees this change coming.  You know, the more pressure there is on the industry, the more incentives there are for one of the companies to break ranks and be the first one to offer consumers what they want.  I wonder if any of the companies will be smart enough to do so.

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