Webwork - 9:39 pm on Aug 10, 2007 (gmt 0)

Inefficient markets allow costs to be externalized and there is always a price to be paid for those externalized costs, often a cost that far exceeds the temporary - at the time - "savings".

Groundwater pollution is a fine example of externalized costs.

Human tragedy, a by-product of the pre-regulated industrial revolution, is another example: workers who lost limbs in the factory without recourse.

Online retail functions "efficiently", in many instances, through externalizing the cost of pre-selling or closing the deal, short of cash changing hands, to retail stores. How lovely "the efficiencies" of online retail. For example, there are fewer returns since the customer had a chance to see it, feel it, try it on, compare it, etc. in the "expensive" brick and mortar store.

Perhaps brick and mortar retail is destined to fail, at least in the world of mass produced products. If that happens then, perhaps, online retail will also fail as manufacturers simply "go direct".

Perhaps "manufacturer direct" is really the most efficient model? I'm sure online retail of mass produced products will savor the day when that happens. Unfair "competition" IF the manufacturer cuts out the inefficient - i.e., more expensive - middleman? The one obliged to carry inventory versus the "manufacture on demand", and price based upon component cost, manufacturer? Hmmmmm.

[edited by: Webwork at 10:01 pm (utc) on Aug. 10, 2007]