Friedman in the News

On February 27th, the New York Times posted an article regarding a more efficient use of the usable radio spectrum, of which is regulated by the Federal Communications Commission (FCC). In particular, this article discusses the part of the spectrum that is used for over-the-air television. Deemed the "beachfront property" of the spectrum, the over-the--air television spectrum is attractive based technical grounds and scarcity: its frequencies can travel long distance and permeate walls. Considering that 91% of American households are now using cable and satellite to receive their television broadcasts, it is argued that the over-the-air television spectrum could be allocated for better uses, other than for television. In particular, the FCC could potentially sell off this spectrum and raise "$100 billion for the government, and more importantly, create roughly $1 trillion worth of value to the users of the resulting services." These resulting services include improved wireless internet access, increased cellphone coverage, among other innovations.

This article appears to highlight Friedman's issue with public monopolies. In this case, the FCC has a monopoly on the use of radio spectrums, in which one requires a license in order to use certain frequencies. Aside from the issues of censorship and violation of free speech surrounding the FCC (35) as discussed in Capitalism and Freedom, this article primarily highlights the inefficiency of the FCC as a public monopoly. Rather than efficiently allocating the scarce over-the-air television frequencies, the FCC has kept its usage restricted to only 17% for the sake of preventing frequency interference. Friedman would argue that the FCC's role of setting technical standards and assigning spectrum could be more efficiently run through the use of the private market. Hence, as this article argues, the FCC should sell off this spectrum, reap the profits, and allow the private market to run this spectrum.

In greater sense, this article also brings into question the existence of the FCC. While its existence was initially justifiable on grounds of a technical monopoly, with the rise of the internet, satellite radio, and cable television, it appears there is no longer a need for government control of the the airwaves -- in tune with Friedman's argument against the Interstate Commerce Commission and its monopoly on railroads. Thus, Friedman would argue that the FCC should be abolished as a whole and the entirety of its technical role be left to the private market.

Marx in the news

On February 14, Yahoo! News posted an article that foreshadows an increase in health insurance, as based on the rate increases in California. While the increase in rates does not affect those Americans covered by their employer, it does directly affect those who purchase individual insurance. With an increase of individual insurance rates, demand of the insurance will decrease while rates will continue to escalate. This becomes especially burdensome for the old and sick rely on individual health care that will have to increasingly shoulder the cost of their care. (As a side note, this issue of health care is at the heart of the disagreement that has stopped Democratic health reform, in which reform bills are requiring most of the uninsured to buy coverage in order to share costs across consumers and also preventing insurers from charging different premiums based on health status.)

America's health care system seems to highlight Marx's fundamental antagonism between the worker and the capitalist as manifested through health insurance. Companies are increasing the price of health care coverage as a means preserving their profit. Employers who cannot pay coverage and cannot afford individual care are consequently forced to not have any health insurance. Hence, companies are placing their workers at a disadvantage in the pursuit of profit. In a different sense, with decreased health care, it also lowers the workers of their likelihood to continue working and perhaps regaining some of the surplus value of their work.

Though on the whole, Marx would despise this notion of health care and companies offering health care. He would see it simply as another mechanism for the capitalist to keep the worker complacent and under bondage of the capitalist system. The worker still labors and sells his/her own life activity, no less estranged from his/her own labor and self. Something like health care could even be considered a type of minimum wage, as a cost of existence and reproduction of the worker.

Locke in the news

On January 30, the New York Times released an article regarding the dispute between Amazon.com and Macmillion books. Amazon.com began to temporarily remove Macmillian printed books and e-books from their online store due to disputes over the pricing of e-books on the site. It appears that tension between publishers and Amazon have been brewing for months as publishers have been withholding certain e-book editions after the release of printed editions. Macmillion, one of America’s six largest publishers, states that it had been planning to set higher consumer prices for e-books like other publishers and asked Amazon to raise the price of e-books to around $15 from $9.99. Amazon argues that this type of pricing puts them at a disadvantage because it has strategically sold e-books at the $9.99 price point in hopes that it would supplement the sales of their Kindle devices. Publishers argue that leaving e-books at the $9.99 severely devalues their product. It seems that with the introduction of the Apple’s iPad tablet, which has agreed with publishers to set e-books at a similar price on their iBookstore, Amazon will even more competition in the market of e-books.

Ethically, the question is whether publishers like Macmillion have the right to force retailers such as Amazon to sell their products at a certain price. Under Locke’s natural law of property, it would appear that such a request would be ethical. Considering that publishers labor into their e-books by translating it from print sources and making it compatible with certain devices, publishers certainly have private property rights to their e-books and can use them when conducting exchange. Then by extension, when both parties enter an agreement and the publisher exchanges money, what Locke considers as labor value, for retailer’s labor of selling their products, it would make sense that the price of sale goes under this agreement. Thus, under Locke's idea of money and labor value, it would seems that Amazon should either oblige to the publisher’s demands or otherwise or break off the agreement. While we’ve discussed the tacit agreement of money as labor value, it would interesting to see how Locke would define a legal agreement and the elements that would make it fair and ethical.

Aristotle in the news

Last week, a number of credit card reforms were finalized, regulating a wide range of the credit industry from how interest rates are calculated to how long gift cards last. On January 17th, the Washington Post published an article that provides consumers with some caveats of these reforms. In particular, consumers are told to be conscientious of rebate cards: a type of rebate that is returned to consumers on a card similar to a gift card or prepaid card. While the law requires that expiration dates on credit cards, gift cards, and prepaid cards be at given at least five years out, the law excludes that of rebate cards. Hence, consumers should read the fine print of their rebate cards and spend them before they expire -- usually two weeks to three months. It is estimated that approximately 20 percent of $4 billion in annual rebates go unredeemed by consumers.

The ethical issue is typical: business profits off consumers through deceptive means. Here, information regarding these credit card reforms is left muddled in hopes that consumers will not redeem their rebate. This points to other ethical issues with business, including greed and selfishness. As in Book I of Politics, Aristotle discusses the disposition of artificial wealth getting, in which he states that it stems from “intent upon living only, and not upon living well” (75). Based on the reputation of credit card companies for their unfair rate hikes and hidden fees, such business is testament to how our morals have been perverted by the pursuit of profit. No longer is money an instrument for attaining the good life, but instead it has become fetishized for the good life. Perhaps for Aristotle, our societal affection for money has already jeopardized our morals and may very well prevent us from leading a virtuous life.

On the whole, Aristotle would blatantly disapprove of the credit industry due to their promotion of artificial wealth getting. Their business thrives off the promotion of money and the perpetuation of consumption. Given their foothold in society, in which one is required to partake in their business in order to own a home, the credit card industry could even be considered an enemy of the Aristotle’s idea of art of household making or economy. For example, one is required to accrue credit and own multiple credit cards prior to being able to purchase a home. Furthermore, the industry utilizes usury mechanisms such interest, which Aristotle directly opposes. The credit card industry, as a whole, appears to promote a fetish for money, which in turn promotes the fetish within society.