If the fishermen or truckers are not getting enough money from their catches or services then why don't they work on the end of the lever where they have control? I don't understand the idea for government intervention. It appears that demands are a jumble of tax elimination and fuel subsidies or rebates. This spreads the costs to the consumers anyway, just indirectly through higher taxes elsewhere or lower services.
There was a similar story today about several US airlines rolling back fare increases because they couldn't get them to "stick". This implies that other carriers are able to still make a profit at the lower fare structure, or that they can carry a loss long enough to drive the weaker firms out of business.
If there are constraints on cost increases I hope someone will explain what they are. Policies not Politics ---- Daily Landscape
Larger firms trying to drive out the independents is also quite possible.
At least that's what I gather from the El Pais stories I have quoted in other comments. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
The recent fuel price increases are a signal that the market will have to shrink. The small companies are the ones with less room to deal with it and are the first to go down. Vencit omnia veritas.
In a normal free market system if your costs of production go up you raise your price.
That assumes a stable ratio between demand and supply and wholly variable costs. In other words, it assumes that the seller of services can choose to sit on his/her hands and do nothing/lose nothing rather than operate at a loss.
Real life isn't quite so tidy. The lease payments on the rigs have to be made whether you work that week or not. So you can't afford to turn down any work that pays more than the cost of the diesel, because £5 towards the repayments is better than £0.
(In fact, you possibly can't afford to turn down work that pays less than the cost of the diesel, because you want to be at the front of the transport manager's mind when the market, you hope, picks up.)
And the supply/demand ratio isn't stable. There's an oversupply of drivers, which is only going to get worse as the cost of fuel forces supermarkets to take a look at their food miles, and that's also driving the price paid to the hauliers down.
I feel incredibly sorry for them. Many of these drivers will have the financing for their rigs secured on their houses. We do need a lot less trucks on the roads, but that's going to be made up of an awful lot of personal tragedies.
To me, it's a situation analagous to the fishing industry. The independent hauliers have capital sunk into a business that just isn't viable any more, is in all our interests to reduce, and they deserve a fair subsidy to get out of it.
We are choosing the path of most (long term) pain...
There's no such thing as a normal free market system.
It's like pre-Copernican astronomy - the planets move in circles, but there are epicycles which predict the real orbit. Even so - the planets really move in circles, and the rest is just details.
Only - not.
Economics won't start to make sense until there's a realisation that markets are seriously fucking stupid herd psychology at the best of times, and outright Marie Antoinette special pleading at worst.
Expecting them to be rational, predictive or sane - never mind socially literate - is like trying to have an argument with a drunken moose.
The very idea of markets should be a philosophical embarrassment along the lines of Phlogiston, Lysenkoism and really bad boy bands.
When people are outraged and fixate on the wrong cause for their anger the results are seldom good. In the most extreme cases we see genocide when an ethnic group is blamed for the ills of society.
In less extreme cases we see symbolic actions (such as rounding up law-abiding, employed, but "illegal" immigrants in the US and then suffering from labor shortages) which do more harm than good.
If civil unrest gets bad enough and force doesn't work (it hasn't been tried yet, but military escorts of essential commodities to cities seems a likely next step) then governments will throw some money at the protesters, or at least promise to do so.
It seems that most of the reasons posted for the protests point to small producers being in competition with big quasi-monopolies. Breaking up the monopolies would take too long and be doubtful anyway, putting in minimum prices for some services or commodities might be a short-term way to get the protesters back to work, but the bottom line still seems to be too many marginal producers with too little organizational power.
During the farm crisis of the 1870's in the US the railroads and grain mills put a squeeze on the growers. The result was the rise of the Populist movement and an attempt at political action aimed at breaking up the "trusts". It failed, but the ideas were now part of the public discourse and the effort succeeded under Teddy Roosevelt 35 years later. I don't think the truckers and fishermen are prepared to wait.
It would be wise if they formed some sort of political action group now to represent their interests. Since EU countries have more than the two parties of the US they might even be able to get some political power in the short term.
They seem to know the symptoms of the disease, but not the cause. A lack of what used to be called "political consciousness". Policies not Politics ---- Daily Landscape
The canonical example of ineffective(?) action seems to be 1968 (1848?). Have activists learned anything since then? They certainly haven't in the US.
I don't want to sound like a social Darwinist, but subsidizing marginal producers is not a viable long-term strategy. It won't be effective and may even violate EU policies. If the real cause of price constraint is monopoly power then that's where the focus should be.
Of course when the cost of fish and transported food go up the riots will just shift to the supermarkets! (wink.) Policies not Politics ---- Daily Landscape
subsidizing marginal producers is not a viable long-term strategy. It won't be effective
and may even violate EU policies.
If the real cause of price constraint is monopoly power then that's where the focus should be.
Of course when the cost of fish and transported food go up the riots will just shift to the supermarkets! (wink.)
For example, large shippers can arrange it so that trucks never move when empty, but independents can't. Large shippers negotiate extended contracts with their customers and include fuel surcharges that average out temporary fuel cost changes. Large shippers can buy fuel in larger quantities and get a lower (comparative) price...
