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What I'd really like to talk about is why certain companies are able to set their sale prices way above what it costs to make their product. What 'common sense' justifies this act to a point where the average consumer buys into it, and how did it become 'common sense' in the first place?
Hmmm... I'm gonna take a wild stab at this and say that it's a holdover from the "wizard" days of computing. The vast majority of the public has such a complete lack of comprehension of what's really going on in their computer, that the machines themselves, the programs that run on them, and the people who make the code, are all part and parcel of what may as well be an arcane religion.
(follow me on this one a sec)
As such, the "wizards" with the highest profile, are going to be able to command the highest prices for their services, for a number of reasons. Their high profile means they've gotten the attention of the great gods of computing, and then can bestow their favors upon the lesser, lest technically apt of this world.
Because its human nature to fear what you don't understand, the public thereby fears computers and all the arcana that goes along with it. Getting them to accept a change in the major aspects of this lore is difficult, because though they may fear the Great Powers That Be, they fear them less than the great powers that are making strides behind the scenes. When fighting the devil, best to fight the devil you know. People may fear, and to a certain extent despise Microsoft (btw, I'm making no value judgements here, this is a hypothetical discussion based on hypothetical perceptions), they fear Linux more, because it is perceived as being a part of some deeper arcana that only a close inner circle are even remotely familiar with.
This analogy could be spread across a wide range of software and hardware.
(And before y'all start tossing tomatoes at me, I'm far from the first person to suggest this analogy).
So, therefore, people will willingly throw money to the demons they are familiar with, because they've at least learned how to placate those demons, and are too afraid to make an offering to another demon, not knowing that demon's temperment or true intentions.
Ok.... Start tossing tomatoes. goes looking for his rain cape
why certain companies are able to set their sale prices way above what it costs to make their product
This is not so much philosophy as economics 101.
There are a number of reasons why this can happen: monopoly, near-monopoly, etc. It might be that there is competition, but consumers are not aware of alternatives.
A common situation where you find high prices but no monopoly is one in which it would cost the consumer more to convert to an alternative product than would be saved by paying cheaper prices. The consumer then gets locked-in to a particular product or range of products. The longer the customers of a particular company take this route, the more locked-in they get. There are a large number of companies who deliberately try to lock-in their customers in this way, some more successfully than others.
> why certain companies are able to set their sale prices way above what it costs to make their product.
I think that TheDoctor has given a very accurate explanation.
> What 'common sense' justifies this act to a point where the average consumer buys into it, and how did it become 'common sense' in the first place?
Being basically a primitive descendant of many generations of farmers I have no high opinion of industrial civilisation. It has estranged itself from nature and developped mindsets that have little connection with basic natural laws. I am not surprised to see much greed in business.
To be honest I already had some ideas (or call it a prepared speech if you will : ) in mind which was even one of my reasons for starting the thread but you guys have said it all in a much simpler way. I was a bit worried that a thread like this may look like shouting on a streetcorner to many, so thanks for your input : )
I was always of the opinion that in a non-monopolized market unexplainably high prices would never last long because of competition; companies, though they'd probably start by aping the 'outset' price, would eventually undercut each other until their product price approached its 'real' product value. What I don't understand completely today is that many supposedly competing companies sell their similar product at almost the same bloated price - record labels again, for example. If this is the case, how should we look at this sort of covert dealing - isn't this 'price rigging', and isn't this illegal?
[edited by: Josefu at 8:08 pm (utc) on April 7, 2004]
The consumer then gets locked-in to a particular product or range of products. The longer the customers of a particular company take this route, the more locked-in they get. There are a large number of companies who deliberately try to lock-in their customers in this way, some more successfully than others.
I thought of one company like this, it's M... mi- uh - migh.... uh, mike... dang! Wi.... wih... whi... dang it! Ah cain't say it! It's the one who started a massive brainwashing/lock-in campaign from '88 by shipping its OS for free in every Intel-CPU run 'puter sold. It's called Wi... wi... dang!
I'm sure you know who I mean : ) Funny thing is - there are no laws against acts like that. Should there be?
It happened with the "Rail Barons" and Wyerhauser in the 19th century, Standard Oil and Hearst Media in the 20th, Conrad Black's media empire is in its death throws in this century, and eventually it will happen to that OS company that shall remain nameless.
Either the market corrects itself, or the government steps in. In this case, I believe the market will do its job. If anyone has seen "The Future is Open" ads being put out by IBM, they're quite telling. More manufacturers are offering Lin bundled with both their servers and their PCs, the tide is changing. It may take up to a decade more (though I doubt it), but the relevence of That Company That Shall Remain Nameless will fade, and it will become just another OS. Just as IBM became just another PC manufacturer.
IMHO
Oh, here's an interesting stats page, which gives the lie to MS's claim to 90% + of the browser market:
[bcheck.scanit.be...]
[edited by: grelmar at 1:36 am (utc) on April 8, 2004]
lawman
The invisible hand takes an awfully long time. Sometimes it would be nice to see the visible hand of government give things a nudge. But that can sometimes backfire and lengthen the process, because then the giant monopolies can claim government intervention is harming them, and the market, and go from being the big baddy, to being the wounded innocent being crushed by the hand of government.
All empires fall, though, in time. I didn't study computer science in U. I studied history. There was a time when people thought the Medici family would rule the seas more surely than any nation. And for a time, they did. For nearly a century, in fact. But just like any other empire, eventually, the familiy Medici succumbed to the pressures of a rising tide of smaller families that wouldn't tolerate their dominance.
Either the market corrects itself, or the government steps in. In this case, I believe the market will do its job.
Okay, ten hands down for the market correcting itself. But as far as the government is concerned, your reasoning is still a bit open - but it brings up a good question: what role should a government have?
Personally, I think, pertaining to the government's role in the economy: none. Whenever the government steps in, it's always to make a compromise, and act which serves but to slow down the abovementioned 'correction' progress. If it is the companies whining about their 'intellectual property' being stolen (but funny now to think of it I've never heard a peep from the musicians themselves) what they really want is laws preventing the consumers they so depend on from naturally migrating away from their marketing schemes. On the contrary, if the consumer cannot change his ways and has no other option but to complain (and complaining is always his last resort) that means that the system is inefficient or unfair and needs to be changed. But this second case is not economy; it's law. Our laws are a body of society-preserving rules that we vote into existence. How often we forget.
So if we decide that theft is bad for society and make laws declaring punishment to any who dare to harm society in that way, the government is there to enforce those laws. If the companies want to shout 'thief!' they have to have proof that there has indeed been theft; but funny thing is, at least as far as music is concerned, they can't. So they propose to make new laws declaring file swapping as theivery. Will this pass? If it was a democracy, no, because very few voting consumers, vis a vis the record labels the way they are today, think they are stealing. In fact, more often than not, consumers see the labels as the thieves. And unfortunately, in governments like Bush's, when the lines aren't clear and new once should be drawn, the company always gets the better deal. All in using voting consumer-confusing tactics such as bringing up an even thicker smoke-screen of issues like 'the moral issues of file swapping'. Lol, but again we forget, morals are our existing laws.
...what role should a government have?Personally, I think, pertaining to the government's role in the economy: none...
An Adam Smith fan, I see ;)
Too an extent, I would agree with you. But then my inner Canadian jumps out and rears its petty socialist head.
There are very definitely cases where the government should meddle in the economy, such as in governing monetary policy (which pretty much every government does), and in setting some economic "ground rules" that society can agree on, and also in determining when and how monopolies are apropriate, and in cases where a monopoly is apropriate, how that monopoly should be controlled and governed.
A case in point would be the development of the Telephone infrastructure. Both Canada, and the US, and in fact virtually every nation in the industrialized world, agreed at the beginning of the last century that a monopoly on the telephone system would be a benefit to society as a whole. The reason being that it was far more important to develop and spread the infrastructure to as much of society as possible, as quickly and efficiently as possible, without having to worry about competing interests and varying standards inherant in a fully open system. The US decided on a governed private monopoly. Most other nations (including Canada) decided on a government owned monopoly. The differences between the two were minor enough that they both succeeded, though they were heavily governed in all cases. (The later breaking up of the monopoly is a seperate issue).
In the case of computer and software development, while there was never any formal agreement on allowing one company to gain a monopoly, it was tacitly permitted for a wide variety of fairly good reasons. Love microsoft or hate it, they did the computer industry a world of good by providing a standard baseline for people to develop the applications that moved us fully into the information age.
And no-one would probably be complaining a lot if they'd kept it at that. If all MS did was control the OS, and left all the top level applications to everyone else, they wouldn't be in all the anti-trust trouble they're in both in the US, and just about everywhere else. It was when they used that monopoly to try and control and take over the development of the top-level applications that people really started crying foul. Imagine the phone companies in their monopoly days saying "you shall use no phone but those we make, no communications device, fax, telex, or anything else, not use the backbone of the network in any way but that which we approve of, with equipment we ourselves have made." It just wouldn't have washed, and the break-up of the monopoly would've occured much sooner.
In the specific case of the supposed MS monopoly, I don't believe there's a need for government intervention. At least, not much more than there already has been. The government of the US, and now the EU, by tying MS up in the courts for a while, have essentially succeeded. Their actions created a public awareness of what was going on. And equally important, it distracted MS as a corporation just enough for the competition to get the wedge in. They started a pebble rolling down a scree, and that peblle is picking up momentum and strength as it rolls, and sooner or later, it will become an avalanche.
Eventually, the market is almost always self correcting.It happened with the "Rail Barons" and Wyerhauser in the 19th century, Standard Oil and Hearst Media in the 20th, Conrad Black's media empire is in its death throws in this century, and eventually it will happen to that OS company that shall remain nameless.
The examples in the second paragraph here do not substantiate the assertion in the first. They are also not really related to one another.
You might like to note, most importantly, that the break-up of Standard Oil was due to government action.
In fact, grelmar, you seem to be changing your position in every post (not a bad thing, incidentally, if it signifies development in your thinking :)). Your latest post gets more onto the correct line. In particular, the role of government, and specifically the role of the US government, in the development of IT was crucial. The internet began life, after all, as a US government project. OSA, private enterprise's answer to the internet, died a lonely death and no one remembers it. So much for the market.
There are very definitely cases where the government should meddle in the economy, such as in governing monetary policy (which pretty much every government does), and in setting some economic "ground rules" that society can agree on, and also in determining when and how monopolies are apropriate, and in cases where a monopoly is apropriate, how that monopoly should be controlled and governed.
Here I think you've simply re-asked the same question as I, but in a different way. What do you mean by 'monetary policy'? - again this is an open thought. Our goal here (mine, anyways : ) is to make everything black and white. And before you tell me that nothing's black and white, let me remind you that this is exactly the reason we make and vote laws.
As for the rest, excepting one small thing I'll get to later - you know what? I agree with you. I really think the state should run 'common utilities' - meaning telecommunications, roadways, water, gas and electricity. That would make their distribution and proper maintenance a voter responsibility, and I think there is no-one, excepting perhaps those in the remotest locations who use systems of their own, who would refuse to pay into it through taxes. The possibilty to call any point B from any point A, and to have energy and water where and when you need it? Sure, sold. If things go private this won't be possible, you'll have to fill the outstretched hand every time, and that hand and its demand will change from region to region - but you won't know where those their borders start and end - and how exactly will these 'run regions' be divided and sold, and by whom? What's worse, if there are many different companies running a water or electricity line from its source to its destination, long-term shortages become a much higher possibility; if one part of the chain goes down, the whole thing does - the companies will be working in relay and not in parallel (meaning any region being able to fix any region) as would a government-run nation-wide system.
Now for the other disagreement - again microsoft. Though I dislike that company for many reasons, I don't like to see them prosecuted in just any way. The European 'anti-trust' accusations are laughably besides the point, and even forwarding such accusations in overlooking the principle is in a way going through the same loopholes that microsoft uses to make its money. Media player shipped with windows is 'anti trust'? Gimme a break. What about Windows shipping in 86% of every computer ever made? Billions of first-time users getting brainwashed into using that OS because they don't know how to use anything else, they don't see (or know) any other choice, and it's the first thing they see? Microsoft is damn aware of first-time user habits, and made its fortune on it, and if anything, that is an antitrust case if I saw one. A case on a pilfering little media player you can download for free anywhere isn't, or is weak at best.
In a true capitalistic society, the consumer must at all times have freedom of choice in a) what he buys and b) who he buys it from. This will allow the market to evolve towards better products, lower cost, and lastly, because of product choice, consumer independance - and education. Today, the home computer market is a sea of stagnation because of a certain monopoly that refuses to lessen its grip - it's not without reason that almost all creative people have Macs.
TheDoctor
The examples in the second paragraph here do not substantiate the assertion in the first. They are also not really related to one another.You might like to note, most importantly, that the break-up of Standard Oil was due to government action.
They do support each other, in my own convoluted ways of thinking. First, the government is a part of the market, though that's a pretty slim edge to stand on, I know, at least in the context of this debate (it could form a whole debate in and of itself, though).
More to the point, the government played the initial role in the correction, the market played the final role. In all of the cases mentioned, the government played some role in the break-up of the companies. US anti-trust laws were actually created in response to Weyerhauser's control of the logging and milling industry. Fred Weyerhauser had the advantage of watching the slow process of a law being created, and beat the government to the punch by breaking up his own monopoly into a broad range of publicly held companies, no single one being a monopoly, though he did maintain some ownership of most of the resulting created companies. A government commision similarly drove a wedge into the Hearst Empire, and tied up the company long enough for market forces to do the rest. The actions against Standard Oil were more direct, on the government part, but the market again waded in with its mighty clout to finish the job.
The rail barons example was just weak, because I really don't know that example well enough to be discussing it.
Josefu
- you know what? I agree with you. I really think the state should run 'common utilities' - meaning telecommunications, roadways, water, gas and electricity...
Sadly, the governments of the US, Canada, and many other nations, are playing a smaller and smaller role in these common utilities, but that's a whole thread in and of itself. I'm just gonna post a link to a CBC news article on the privatisation of the water utilities, and leave it at that.
[cbc.ca...]
Josefu
- again microsoft. Though I dislike that company for many reasons, I don't like to see them prosecuted in just any way...
I'm not entirely sure we're disagreeing here. In my previous post I stated I don't think the governments need to meddle any more than they already have. The markets are already using the wedge given them by the publicity these cases have generated. IBM, Dell, and others are begining to push Linux as a shipped with OS, not just on server side, but on PC side.
The European case I don't think is all that laughable. It's based on out of court settlements from previous cases wherein (in essence) MS agreed not to abuse its control of the OS market by bundling more apps with it and squeezing out the competition. In any case, MS is appealing the decision, and it's going to get tied up in the courts for another few years. For the moment, the EU case is a non-event. The main sucess of it is in generating publicity around the issue. And that plays into your stated dislike of billions of first time users getting brainwashed into using MS-OS.
I don't see the stagnation in the home computer market that you do. Mac is still going strong, though it is a small percent of the market. More people are becoming aware of Linux, and as a result, are exploring the option. The revolution has not been won, by any stretch, but the first shots have been fired. With time, I believe momentum will build.
In a way, my own PC is an example of the change. I rely primarily on Win XP as an OS, but the machine is set up as a dual-boot, because I like to run on Linux for certain things, partly just to become more familiar with the OS. This machine came bundled with a wide variety of MS top level apps, most of which I rarely use, favoring other solutions for everything from my browser (mostly using FireFox now), to my HTML editor (Homesite), to office applications (Sun.org's Open Office), though I use MS Word a fair bit, and as for media players, well, right now I have 4 (including the MS one), and I can't really decide which is my favorite, other than MS Media Player definitely isn't it. All those decisions were based on personal choices and needs, not on government action. Though I support the governments actions so far, mainly in the exposure it creates for a wider audience to the issues at stake.
Josefu
- it's not without reason that almost all creative people have Macs.
Blanket statement. You've called me out (justifiably) on them a couple of times. Just returning the favor ;)
p.s. I haven't stretched my debate muscles in any where near this depth in a long, long time. Thanks for the opportunity.
p.s. I haven't stretched my debate muscles in any where near this depth in a long, long time. Thanks for the opportunity.
Nor I, it's open and unbiased discussion is rare nowadays, even on so-called 'philosopher's boards'. This is a place for working people seeking to better inform and better themselves (like myself) so I thought I'd take a 'foo' and give it a 'schwing' here. My pleasure and thanks for jumping on : )
I don't see the stagnation in the home computer market that you do.
In my mac-biased-writing-from-my-mac-equipped-studio mind I grouped this in with my 'almost' blanket statement - most home computers are still PC's. I say 'almost' blanket statement because my phrase did contain "almost." Yours had nothing of the kind : )
..as for the rest, I must finish work before I get to it but you've brought up a couple 'doozers'. Oh, and btw, I like referring to the motivation or effectiveness (way of working) of certain systems; I find historical reference such as 'this person did this then' as proof a bit - well. Much stronger to look at and state 'this person did this why. Find the right or wrong in the root motivation and the effect of that 'cause' will be but causual details.
Now we'll really be getting into the breach : )
I think, it is due to the "path of least resistance".
Anyone who has exposure in social/choice theory could confirm that, i guess.
the path of least resistance
In other words, they do it because they can : ) And it stays that way as long as no-one does anything about it.
Government. Government, in my books, should be nothing more than an organization society hires (through voting) to maintain and enforce the laws society creates. The police is there to enforce these laws within this society, and the army to protect these laws from any seeking to change them from without. Simple, non? These laws we decide are the skeleton of our society or culture; we can certainly get by with this alone and make its country's workings 'everyone for himself'. This would be 'pure' capitalism. Yet I see this structure as being fragile; if owned and distributed by individual companies, our resources such as water and communication would be not only endangered by the whims of nature, but also from financial whims such as bankruptcy, takeovers and the rise and fall of the stock market. The government running our water supply, electricity and communications will smack of communism to some, but it won't be so if it is the people who decides (votes) that a system thus would build a solid and stronger society. I also see logic in a national health care plan such as Canadians have (and here's hoping they keep it) allowing anyone hurt, anywhere, to get medical attention without any fuss. People buy insurance, don't they? I'm sure there's not many who'd refuse to pay in the same way into a government-run and non-profit-oriented health plan. Wait, my uncle's one - but he'll has to pay at every doctor and hospital visit. But that's his choice; at least the plan is there for those who want it, and it's there because most do.
But I don't see the interest in having Government-organized retirement plans. Nor private retirement plans. People hoping to get more back than what they gave? If so, who's pocket is that 'little extra' coming from? It all comes back to interest and money-lending, and these plans are just pools to accumulate just that: a mass of cash which earns an 'interesting' interest rate when it is used to make loans to individuals. An unneccessary step in my books, and the retirees will only see a small part of what their life's capital has served to make for others. The government could serve as a protection-against-all-dangers bank (holding the retirement-reserved cash), but to use that money (as the US government albeit limited health plan does today) towards other projects, or to make more money? Not without voter consent.
[edited by: Josefu at 9:19 am (utc) on April 9, 2004]
separation of Business and State
But back in the real world....
But back in the real world....
Go on, then, shoo! The above is certainly no clausula summum : )
But to amplify mine: you cannot have separation of business and state in the real world. For example, business depends on the existence of a market, which depends on the existence of well-defined property rights, which depend on a state to defend them.
You can't buy and sell if you can't enforce your right to what you're selling. which means that business is dependent on the existence of a state and of state regulation of the fundamentals of the economy.
And don't forget the protection money you have to pay to Guido on top of bureaucratic regs. :)
<added> Wait a minute; if you have Guido, why do you need state protection? ;) </added>
But to amplify mine: you cannot have separation of business and state in the real world. For example, business depends on the existence of a market, which depends on the existence of well-defined property rights, which depend on a state to defend them.
Of course there can be a separation of business and state. People buy and sell things. All those buyers and sellers together make a market. The only role the government should have in all that is the same it should have for the rest of the society who elected it - maintaining and enforcing laws based on what the electorate body decides is right and wrong. As far as the market is concerned, all this means protecting both consumers and businesses against fraud and theft.
Anything outside of the above is not Capitalism, and certainly not democracy.
(added) I guess I am an Adam Smith fan, though I have doubts about his 'invisible hand' - but I have yet to read about it. Thanks for the tip! : )
The only role the government should have in all that is the same it should have for the rest of the society who elected it - maintaining and enforcing laws based on what the electorate body decides is right and wrong.
And supposing the electorate decides that there should be laws preventing the shutting down of unprofitable businesses where this would result in the destruction of communities? That would be democracy, but it certainly wouldn't be capitalism.
Your formulation lets in wholesale government interference in the economy to a much greater extent than I think you imagine.
But, in any case, you haven't answered my point. Did you understand it? Apologies if you didn't.
People buy and sell things.
How can people have things to sell unless there are laws protecting their property? Why would people buy things if they could just take them from others without asking?
You can't have a market without some sort of state regulation - at a minimum, laws to say what is yours and what is mine. This is, for example, why market towns arose in medieval Europe. They were places where a regulated market could exist under legal protection, at a time when the countryside was in a state of intermittent anarchy.
And supposing the electorate decides that there should be laws preventing the shutting down of unprofitable businesses where this would result in the destruction of communities? That would be democracy, but it certainly wouldn't be capitalism.
This is a big 'what if' and goes completely against lucid human reasoning but let's treat it anyway. In the above situation it would be the few whose jobs are endangered who would want that sort of radical law but against society as a whole they haven't a chance of making it pass. You would have to have either a dictatorship leading a mindless proloteriat for that kind of plan to have any success.
How can people have things to sell unless there are laws protecting their property? Why would people buy things if they could just take them from others without asking?
Now here you must think for yourself. Why do you need someone to tell you what you can or can't own? Laws forbidding theft and fraud and murder will forbid you from owning anything any other way than by your own work. It's no more complicated than that.
I know what is mine because I worked for it and you know what is yours because you worked to earn it and we don't need anyone to tell us what that what is and why or why we don't 'deserve' it.
If these laws actually protected property, I'd be out of a job. While they might keep honest people honest, their main function is to provide a means of punishment for those malfeasants who are caught and convicted.
If the market always corrected itself in favor of the common good, Standard Oil would not have been broken up via gov't intervention. Ralph Nader wouldn't have had to initiate legal action to force Ford Motor Co. to stop producing exploding Pintos. PG&E would have stopped releasing toxic substances into the Hinkley, CA water supply before becoming the target of a class action lawsuit.
Now that I've put in my 2 cents, I'll have to go back and thoroughly read this whole thread. I'm sure I've got more to say on the subject. ;)
Thoughts on Profit
...when does it become greed?
Interesting thread. I'll add my own 2 cents worth now.
I've lived under both capitalism and lived under post Stalinist communism in rural Hungary in 1974, 1977 and 1979.
Communism and Capitalism are merely two opposing sides of the same coin - greed.
Under capitalism, greed is the motivation. Me before anyone else. Conspicuous consumption of luxury goods and the utter wastefulness of our ways rules. If you have it, flaunt it.
Under communism, greed is effectively punishable. The needs of the many is of greater importance than the needs of the few. And bureaucracy will inflate to whatever size is needed to ensure this.
Under communism, nobody ever had Cadillacs. Nobody ever needed them though. Everybody had a job, health care and a home. Nothing luxurious. But it kept you warm in the winter, sheltered in the rain and protected the children.
Under capitalism, I can take a walk down Queen St. in Toronto, and see $70,000 Cadillac SUV's driving by, while homeless people live marginalized on the sidewalk. Not that these SUVs are actually built from $70,000 worth of materials - it's all jacked up profit margins. These trucks are built on the same assembly lines that pickup trucks roll off from. No real value. Artificial.
As far as I can see it.....all of this tugging and pushing that happens when money is deemed of higher value than people, is so extremely dangerous. And especially when it comes to a staple like housing, which everybody cannot live without (in this I refer to Toronto's hugely inflated housing market).
Now nobody really expects anything from the hands of men to be free of cost.
All anyone can ever ask and expect is an honest conscientious pricing, always remembering that the inflated costs a vendor takes out of your pockets doesn't make you any better able to pay rent or feed your family. True progressiveness, not a retrograde Boomer-induced, warped 1960s "bigger is better" expansionist gluttony.
Marshall McLuhan said it best when he said "Wealth creates poverty".
In referring to "Wealth" he refers to the kind of wealth men create for themselves, and the exclusionist efforts taken to protect and maintain this wealth at all costs. Up to and including war.
This is a big 'what if' and goes completely against lucid human reasoning
It's normal day to day politics. What do you think all the arguments about the WTO are about?
I know what is mine because I worked for it
Now you're arguing quite a different position to the one about the electorate deciding what's right and wrong. Now you're implying that you believe in some form of natural law, over and above these decisions, that defines what's right and wrong.
But even following your position, there are radically different interpretations of it that can be made. On the one hand, Proudhon would argue that what you have said must literally be true, that your employer has no right to the product of your labour. John Locke, on the other hand, famously said that "the Turfs my Servant has cut... become my Property".
Whichever position you take (and there are, of course, others in between) there can be no market until there is a socially enforcable definition. Society must come to a definition and enforce it before a market can exist. And the intitution that does the enforcing, by definition, is the state. No state, no market.
What enforcing does the state do in the black market?
