Tag Archives: Harm through the market

Oligopolies and monopolies are very important ways of obtaining income without providing a productive service. They produce goods, a productive service. However, they receive additional income by raising prices, and their oligopoly/monopoly profits are distinguished by economists from normal profits and other expenses, which are the returns to productive activity. There are other harmful aspects to concentration and large firms as well, including restriction of innovation, using patents to defend market position, non-compete requirements for their employees, and substantial political power.

Opioid harm

Opioids have an important role in relieving pain. Nonetheless, opioids can cause serious harm: addiction to them can ruin lives. Thus they are a “controlled substance” where safeguards are—or should be—in place so they may be used only for serious pain relief. When these safeguards are breached, harm can be done to many people. This harm, and the responsibility for it, is a current critical issue in the United States.

The Washington Post has recently published an excellent series of articles on the opioid crisis, several of which are cited below.

This is a good introduction to the issue covering the scale of the problem, lawsuits over the issue, and the Post’s efforts to make the DEA’s opioid distribution database available to the public.
76 billion opioid pills: Newly released federal data unmasks the epidemic Scott Higham, Sari Horwitz and Steven Rich Washington Post July 16, 2019

Drilling into the DEA’s pain pill database Washington Post July 21, 2019
“From 2006 to 2012 there were 38,269,630 prescription pain pills, enough for 203 pills per person per year, supplied to Mingo County, W.Va.”

Opioid death rates soared in communities where pain pills flowed Sari Horwitz, Steven Rich and Scott Higham Washington Post July 16, 2019

Drug company executives said they didn’t contribute to the opioid epidemic. Nearly 2,000 communities say otherwise. Robert O’Harrow Jr. and Scott Higham Washington Post July 20, 2019

Shows the Post’s opioid epidemic articles over the past three years.
Follow The Post’s investigation of the opioid epidemic Washington Post Staff July 19, 2019

Demonstration in front of Google headquarters on August 13, 2010 as Google seemed to shift away from its strong stance in favor of net neutrality. Google has since dropped its "don't be evil" clause from its code of conduct. The harm that Google and other internet companies may doing is coming under increasing scrutiny. Credit: Steve Rhodes

Google, Facebook, internet companies and harm

How Google went from providing information about its users in the aggregate to collecting a vast number of bits of information about you from the use of its services, using this information to sell ads that focus directly on you, and selling the information to others as well which, in combination with other information, can provide others with specific information about you, including your name and address.
Google’s 4,000-word privacy policy is a secret history of the internet Charlie Warzel and Ash Ngu New York Times July 10, 2019 (Opinion)

If advertisers are doing it, can the U.S. (and other) governments be far behind? ‘Fingerprinting’ to track us online is on the rise. Here’s what to do. Brian X. Chen New York Times July 3, 2019 “Advertisers are increasingly turning to an invisible method that pulls together information about your device to pinpoint your identity. “

Having only one or a few buyers of a good or service enables that buyer to pay a lower price. Joan Robinson was the first economist to describe this power clearly. It is an important part of the harm that may be done by some internet companies such as Apple and is now being discussed.
Apple’s scary buying power and the woman who named it Greg Rosalsky NPR June 18, 2019

The Supreme Court’s Apple ruling gives tech titans reason to be nervous Editorial Board Washington Post May 15, 2019
“By determining that consumers can have a direct purchasing relationship with a platform even when they are buying third-party products, the court blurs the line that companies have held so far: that they are neutral intermediaries. And the additional acknowledgment that the third parties might also bring a case for any harm that Apple causes them in its role not as a dominant supplier of apps but as a dominant buyer — a “monopsony” rather than a monopoly — opens up another front for litigation. “

In stores, secret surveillance tracks your every move Michael Kwet New York Times June 14, 2019

Photo caption: Demonstration in front of Google headquarters on August 13, 2010 as Google seemed to shift away from its strong stance in favor of net neutrality. Google has since dropped its “don’t be evil” clause from its code of conduct. The harm that Google and other internet companies may doing is coming under increasing scrutiny. Credit: Steve Rhodes ©©

We read 150 privacy policies. They were an incomprehensible disaster. Kevin Litman-Navarro New York Times June 12, 2019

Google made $4.7 billion from the news industry in 2018, study says Marc Tracy New York Times June 9, 2019

Old sewing machine of the type used in many Indian homes. Credit Suparna

Fashion industry exploitation of female home workers in India

Many firms in developed countries, countries which have significant worker protections, contract out parts or all of their production to contractors in developing countries, where labor protections are much less. Here is an example.
Made for next to nothing. Worn by you? Elizabeth Paton New York Times February 6, 2019

See full report Tainted Garments. The exploitation of women and girls in India’s home-based garment sector by Siddharth Kara (60 page PDF file)

Image: Old sewing machine of the type used in many Indian homes. Credit Suparna

The rise in collateralized debt obligations since 2004.

Harm through the market 2019

United States

The sugar that saturates the American diet has a barbaric history as the ‘white gold’ that fueled slavery Khalil Gabran Muhammad New York Times August 14, 2019

The brutal psychological toll of erratic work schedules Daniel Schneider and Kristen Harknett Washington Post June 27, 2019
“Unpredictable hours and variable pay may cause even more distress than low wages.”

This article brings out the large supply of people who need a job enabling Uber and other gig-based enterprises to pay those who work for them low wages. (See “exploitation of labor by capital” in Understanding exploitation.) In addition, workers now are classified as “independent contractors” not employees, removing rights which workers have.
The ‘Gig Economy’ Is the new term for serfdom Chris Hedges Truthdig August 12, 2018

This article says that the time allotted for patient care during normal working hours is not sufficient, forcing health professions to work extra hours to meet the needs of their patients. (See “exploitation of labor by capital” in Understanding exploitation.)
The business of health care depends on exploiting doctors and nurses Danielle Ofri New York Times June 8, 2017

One important type of market harm is firms trying to sneak by extra charges for consumers of their product. Wells Fargo has done this on a large scale, and has been caught three times. In the most recent settlement, the bank paid to settle charges that it had charged (unnecessary) insurance on its auto loans and without informing those receiving loans.
Wells Fargo agrees to settle auto insurance suit for $386 million Emily Flitter New York Times June 7, 2017

An editorial in the New York Times sets out important ways in which worker’s rights have been reduced in the Trump administration. These include: easing the ability of firms to classify workers as temporary workers, thus eliminating the protections that full time workers have in law, restricting collective bargaining in various ways, limiting the ability of workers at franchised businesses to pursue claims against the franchiser, and failing to adequately enforce existing laws, such as OSHA.
Trump’s war on worker rights Editorial Board New York Times June 3, 2019 (opinion).

Robert Reich points out that about 25 percent of American workers are now temporary workers, eliminating protections that ordinary jobs have including “a minimum wage, unemployment insurance, workers’ compensation for injuries, employer-provided Social Security, overtime, family and medical leave, disability insurance, or the right to form unions and collectively bargain.” The jig is up on the gig economy Robert Reich Truthdig June 5, 2019 (opinion)

Individual consumers do not have the market power of Medicare (or large health insurance groups) and thus get charged much more. While a justification for this on the part of hospitals is that individual consumers may not pay, there is little reason why those who do pay should cover the charges (and very possibly much more) of those who don’t. This arises because of differential market power. Individual consumers of health care are limited in their bargaining power while larger consumers such as health insurance firms are able to strike better bargains. In addition, there are few providers of hospital services in a local market, increasing these providers market power. (See “monopoly and oligopoly” in Understanding exploitation.)
Many hospitals charge double or triple what Medicare would pay Reed Abelson New York Times May 9, 2019

California to ban controversial pesticide, citing effects on child brain development Reed Anderson and Juliet Eilpern Washington Post May 8, 2019

Why both major political parties have failed to curb dangerous pesticides Elena Conis Washington Post April 9, 2019

How regulators, Republicans and big banks fought for a big increase in lucrative but risky corporate loans Damian Paletta Washington Post April 9, 2019

Pork industry soon will have more power over meat inspections Kimberly Kindy Washington Post April 3, 2019
“Under the proposed new inspection system, the responsibility for identifying diseased and contaminated pork would be shared with plant employees, whose training would be at the discretion of plant owners. There would be no limits on slaughter-line speeds.”

The New York attorney general alleges that as investigations focused on Perdue Pharma, the family that owned the company began shifting hundreds of million of dollars from the business to themselves, using offshore entities.
New York sues Sackler family members and drug distributors Roni Caryn Rabin New York Times March 28, 2019

One company bought all the retail outlets for glasses, used that to force sales of all the eyewear companies and jacked up prices by as much as 1000% Corey Docterow BoingBoing March 12, 2019

Wall Street’s latest love affair with repackaged debt. Investors in collateralized loan obligations are ignoring the signs of danger. William D. Cohan New York Times March 18, 2019 (opinion)

Condemned to repeat the history of bank failures? The 2008 crisis showed what happens when financial regulation is weakened while the economy is strong. The Trump administration is doing it again. Editorial Board New York Times March 20, 2019 (opinion)

Image: The rise in collateralized debt obligations since 2004. Credit Bloomberg / InvestmentNews

Other countries

One major way in which companies benefit is by locating production in countries where people’s incomes have been most limited by exploitation. This article considers the shift in textile production to Ethiopia. “Entry level garment workers in Ethiopia typically receive a base salary worth only $26 a month–the lowest by far in the worldwide clothing supply chain.”
A new industry is creating jobs in Ethiopia. But at what cost? Paul Barrett Washington Post May 10, 2019

“The current state of the migrant labor market [is] riddled with blatant violations of all the norms of an ideal workplace.”
Are migrant workers humans or commodities? Thalif Deen Inter Press Service May 1, 2019

Hidden in plain sight — private cartels in Africa Thando Vilakazi Review of African Political Economy Blog March 26, 2019