> I think ordering on amazon has become a little like getting your car towed.

Apparently especially in Ontario…

https://www.thedrive.com/news/44749/inside-the-tow-truck-maf...

I'd like to see an economist's view on how the free market is failing here, and what we can do about it.

You might enjoy “The Market for Lemons” by the economist George Ackerlof [0]. It fits people’s descriptions of what’s happening with Amazon.

His idea was: buyers don’t know if a car is good and the risk of getting “a lemon” (a bad car) reduces how much they’re willing to pay. That means sellers reduce the quality of what they’re selling or leave the market. After a while the quality degrades so much that buyers notice and want to pay even less. Eventually the market is 100% lemons.

The paper was controversial when it was published in the 1970s, but helped kick start research into “information asymmetry” and the potential for market failure.

[0] https://www.sfu.ca/~wainwrig/Econ400/akerlof.pdf

This sounds familiar to my used car shopping experience a few years back. Went to see at least 20 private party sellers over a period of a few weeks and most were junk, bought by shady dealers at used car auctions. And their prices were well above the blue book for excellent condition, despite the cars being fair at best. I did manage to find some actual private sellers, and ended up with something I like and still drive now, but it required a lot of time and determination. I can understand why some people would just go to a lot and drive off a couple hours later

Your regular reminder that theoretical free market assumes perfectly rational and informed consumer, no lies and no misleading or withholding information

In other news a car has infinute milage on a frictionless surface in a vacuum

First imagine a spherical cow...

I'd say it's working just fine, by causing people to switch away from using Amazon. Amazon continued to lower their brand's quality and as the name becomes less and less trusted, their products are worth less and less.

Is that actually happening though? I know there's lots of anecdotes around here, but there are still many people using Amazon frequently. I wonder if their numbers have actually gone down

I mean, roughly, there's no such thing as an ideal free market, and in all real markets all the ways in which it's not an ideal free market are being exploited by people to collect the margin. The concept of an ideal free market is promulgated by the same people who are making money off those margins.

As far as what you can do about it, you could start with preventing those people from interacting with markets. I leave the mechanism as an exercise for the reader.

A free market would first require getting rid of all forms of power and so far there have been people who thought about minimizing the most impactful sources of power and pretty much all economists ignore them.

What we are doing is the equivalent of looking at a warped mirror e.g. a non free market and declaring that the reflections are not distorted e.g. a free market.

A lot of people are scared of living on the streets or feel shame from living off welfare. There is no way these people are going to make long term decisions if their short term needs haven't been met or there is a constant risk that they won't be met tomorrow.

This is actually one of the more disgusting parts of Austrian economics. Where a low time preference is basically considered the equivalent of a high IQ. If you have a high time preference you must be some dumb consumerist animal, when the truth is that you barely earn enough money to meet your living expenses which means 100% of your spending must go to consumption. Thirst is more urgent than hunger which is more urgent than shelter which is more urgent than social needs and so on. At some point you are not longer hungry or homeless. The urgency is gone. It would be more accurate to say that time preference is a function of wealth and having your needs met, rather than some intellectual jerk off competition where stupid people are filtered out and smart people end up with all the wealth.

Most people are still happy to shop with Amazon despite it's failings. I'm sure Amazon has analyzed the data and are coming out ahead.

What free market? There is no such thing.

I honestly just see a regular capitalistic market, where a company is trying to make money at the expense of other companies. By that I don't mean Amazon is outcompeting retailers and pushing them out the market. I mean Amazon is actively causing damage to well known brands by letting scammers sell those branded products to promote their own AmazonBasics brand which is free of scammers.

Even if the scams are unintended, there is no profit incentive to get rid of them.

Tow drivers make a lot of money. They do a lot of subcontracting and mutual aid type arrangements.

Towys in my country are usually connected to some kind of mafia. Never met an altruistic one like like matts offroad recovery in my travels.

The only time I had my car towed was in Devon, SW England, in 2020. I hit a pothole and blew out a tyre. The company that towed my car took it to their workshop, and took me to my hotel. The next day I spoke to them to organize getting a pair of new tyres. That was a challenge because I had winter tyres on as I was intending to return to Norway before the spring and no one stocks winter tyres in Southern England. It took them another two days to get the tyres. They charged me for the tyres and fitting and that was it, no charge for the ten mile tow.

Same here (Western Australia) and it's closer to $2500 than the $200 mentioned above.