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Businesses are definitely a specialised interest group, and by far the most powerful. This has long been recognised by economic theorists. See for instance, Adam Smith in the Wealth of Nations:
The workmen desire to get as much, the masters to give as little, as possible. The former are disposed to combine in order to raise, the latter in order to lower, the wages of labour.

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it.

We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate.
The masters, upon these occasions, are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen.

Or, shorter, Milton Friedman:
With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves.
The broader and more influential organisations of businessmen have acted to undermine the basic foundation of the free market system they purport to represent and defend.

The way in which a specific market functions is determined by an interplay between the allocation of rights, duties and risks and the enforcement of this allocation by the government in specific domains and on specific occasions (as Adam Smith already suggests for the labour market), the strategic decisions of businesses, technology and the way it can be used to create preferences through advertising, etcetera. Free market ideology has very little to do with it.

At the same time, some of the reasons why the market has been as given to conformity (TV culture, mass production) may be fading away. At least Nike is partially going in a hyper-niche direction with thousands of sneakers that are only available at a specific place and a specific time.

by nanne (zwaerdenmaecker@gmail.com) on Tue Oct 30th, 2007 at 11:33:50 AM EST
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