Gotcha Capitalism

Monday, January 7th, 2008 08:55 pm
flwyd: (Om Chomsky)
[personal profile] flwyd
Today's Fresh Air program featured an interview with Bob Sullivan, author of Gotcha Capitalism: How Hidden Fees Rip You Off Every Day -- And What You Can Do About It. He talked about arbitrary fees charged by banks, cell phone companies, cable companies, and others that can make up a major percentage of their profits. It sounds like a very informative book, especially for people who don't like to read the fine print. I do read fine print (though I don't usually enjoy it), and I will probably add this book to my "get around to reading it" list.

I think there's significant value in a lot of libertarian ideas, but their "get rid of government and the market will take care of it" philosophy doesn't win me over. I dislike dealing with government bureaucracy and oppose government control over private activities as much as the next hippie pagan techie. But I dislike corporate bureaucracy even more and oppose corporate disregard for privacy and personal freedom as well. "A free market would resolve this by selecting for companies with transparent processes and strong privacy policies" is the stock libertarian response, but Sullivan doesn't think it's true. He said that one hotel chain tried to be up front about their prices and it was a disaster because customers selected their competitors whose prices looked lower but packed a lot of hidden fees.

One reason I don't own a cell phone is that I choose not to participate in the rigged market of cancellation fees, incoming text message fees, convenience charges, and "you spent too long talking to your friend with a crisis" overage charges. My monthly local phone service + DSL bill is the same regular $44 every month; the only time I've had to call Qwest because of billing confusion was when I didn't understand the wording of "we've just started charging monthly for allowing long distance calls." But I'm sure that if I had mobile service through the same company, I'd be caught off-guard on a regular basis. One difference is that there are more government regulations of what and how companies can charge for local phone service.

At least with the government I know that all prices and fees are clearly published, the requirements are stated up front, and that caprice is against the rules. I'd rather be at work tomorrow morning than at the passport office, but at least I don't expect any surprises. Driving there in the snow, on the other hand...)

Date: 2008-01-08 04:37 am (UTC)
From: [identity profile] hattrickflyer.livejournal.com
I may be in the minority on this, but since switching to Verizon, I've had zero surprises or unexpected charges (in a little over four years, now). They don't tell me when my contract is up (which makes me eligible for a discounted/free new phone) but the bill is what I think it's going to be.

As opposed to AT&T, who arbitrarily decided Maine was not part of New England (my plan covered New England and the Mid-Atlantic) and billed me $300 for calls I made while stuck there for two weeks.

I know what you're saying, tho, there's a ridiculous amount of unseen charges out there. And I also agree that letting business run around unfettered is a bad idea; I'm just not sure that most government regulation is in practice a much BETTER idea.

Date: 2008-01-08 07:05 am (UTC)
From: [identity profile] mackys.livejournal.com
I think most big-L libs fail to take into account a couple of obvious things about human nature. A) People are stupid and B) people are sheep. The idea that the market will select the best price is only true if people are intelligently able to figure out which price is the best one. And as you've said, lotsa companies go a long way out of their way to obscure the real price of their good or service. The first big downfall of lassiez-faire economics is that a real free market requires that all consumers have (near-)perfect information about cost and availability of just about every good almost all the time. But this assumption is almost never true in the real world.

The obnoxious dogma that's continually spouted by the free-marketers on this issue is one of the big reasons I don't claim to be a big-L lib.

Date: 2008-01-08 07:20 am (UTC)
From: [identity profile] flwyd.livejournal.com
I think the most succinct way to describe what I don't like about the Libertarian Party is "lack of nuance." Unfortunately, nuance is hard to find in other parties too. Lately it's fallen to Democrats like Dodd and Biden to be the poster boys of nuance (nuancy boys?). And it's pretty hard to get people excited enough about nuance to write a big check and tell all their friends. The Senate is the home of nuance, but Presidents don't come from the Senate.

Date: 2008-01-08 07:51 pm (UTC)
From: [identity profile] tequiladawn.livejournal.com
I love Fresh Air!
I'm gunna throw in my two cents. My Mother has T-mobil( I am on her family plan)as they are the only provider that serves the corner of no and where in Missouri where she lives. She's had a fairly good service with them. I have sprint(a family plan made of friends) because Sprint promised the best deals (after lots of research w/other companies and plans). Sprint Sucks.
Now for something more constructive... I think alot of why people put up with hidden fees is they are not willing to go without. One study I read stated that 20 years ago a family thought of a phone (landline!)as an extra expense; if bills got tight, the phone was the first to go. Today, families list not only phone, but -cellphone- as one of the top three bills to be paid. Of course, the study didn't ask why, they never do...
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