In that case the belief is that people get what they deserve. If bad things keep happening to you it must be because you're doing something wrong. Because the world is overall just.
In this case people are willfully encouraging a certain business practice by giving those businesses their money. Then they complain about the business practice they just supported and look to the government to force the businesses to behave differently. They're not being victimized by a harsh world and being told it's their fault. They're willfully victimizing themselves.
This is different if there is some kind of government enforced monopoly interfering in the market. But the end result is the same in that case. The business isn't the problem.
>They're not being victimized by a harsh world and being told it's their fault. They're willfully victimizing themselves.
You're ignoring the collective action problem. Suppose that long-term contracts reduce competitiveness, because if people can't switch providers at the drop of a hat then companies don't compete as aggressively and in consequence their profits go up while the value for money on cellular service goes down. The providers know this and charge a premium for off-contract service (or, equivalently, offer a phone subsidy for on-contract service which add less to the monthly fee than paying full price for the phone would). So for each individual customer, it's better to take the subsidy, even though doing so at scale is bad for customers in general.
Solving collective action problems like that is one of the few things that governments are good at, assuming they haven't been captured by industry lobbyists.
But the collective action as you've described would be disrupted as soon as it becomes a big enough issue that a newcomer to the market can profit from a different business model. Equal service and no contract for instance. Eventually perhaps better service and no contract. Actually, last year I switched to a provider who does exactly that. No contracts is part of the business model. You can't get a long term contract from them if you tried.
You're assuming a low barrier to entry. That is clearly not the case for a business requiring the licensing of multibillion dollars worth of wireless spectrum. Moreover, the availability of service without a contract doesn't break the cartel, because that provider has no incentive to induce a price war by offering it at a more attractive price point than on-contract service from competitors. They can instead offer off-contract service for a premium (or offer lower-quality/coverage service for the same price), which is worse than what you would get if long-term contracts were prohibited and all providers had to compete in the market for off-contract service.
You would know if there was a wireless company offering an off-contract plan that was actually more attractive than their competitors' on-contract plans because everybody would switch to it -- customers don't want to be locked into a long-term contract, they only do it because the providers have the incentive to make off-contract plans more expensive.
An off-contract plan that is actually more attractive than the competitors is exactly what is being offered. WIND mobile is the company I'm talking about. I didn't want to get that specific, but there ya go. I am not affiliated.
And while I see your point about the high barrier to entry, all that does is delay the process. Eventually...if a profitable market opportunity is there to be taken, someone will take it. If it requires a big player, then a big player will do it. Granted there may be a longer period of suffering.
So kind of like I was saying then... their coverage map has more holes than coverage. But they still get to charge about as much as the big players by offering no contracts, and it doesn't break the cartel because customers will never switch to them in large numbers as a result of the poor coverage.
Why do you expect price competition to ever be a profitable strategy in a concentrated market? If you lower your prices to gain market share, so will your competitors, and so lowering prices doesn't actually gain you any share, it just lowers everyone's margins. Nobody has any incentive to be the first to do it.
> If it requires a big player, then a big player will do it. Granted there may be a longer period of suffering.
Maybe if you wait long enough. But if the waiting period is measured using the geological timescale, it may be prudent to weigh other alternatives.
...by doing the only things they can in order to remain competitive in the short term.
The Just-market Fallacy is analogous to the Just-world Fallacy because it assumes that all actors are free to change their behavior, thus if they don't change their behavior, they are getting what they deserve from the market.
True, they might need that farm equipment so in the short term they are at the mercy of the status quo. But there's still nothing to stop a group within the market from competing on new terms. Also, if the gap between what is desired and what is provided is significant, then a newcomer to the market would have a field day leveraging that gap. Finally, the consumers are also free to change their own business model so they no longer require that equipment to remain competitive. The supplier would find its market diminishing and look to get it back.
There's still the inertia of a massive status quo. It takes time to ramp up new distribution channels, supply chains, etc. It also takes time to convince customers to change suppliers, it takes time to design competing equipment, etc. The time taken is even longer if the gap in profitability between what is and what ought to be is relatively small from the perspective of a potential disrupter.
I could maybe accept that markets might tend to create equitable outcomes over very long terms, but most people don't live on very long terms; they live day to day, and if today sucks, today they complain.
Agreed, it could take time. And with a small gap it may never happen, but that just means the pain point isn't all that painful. Otherwise the gap would be larger.
I guess it depends how eager you are to have government get involved and attempt to make things right. I generally have little faith in government meddling resulting in a net positive.
that just means the pain point isn't all that painful.
This is, unfortunately, another fallacy of the market. In real life, the ones with the most pain are often the ones with the least ability, financial or otherwise, to alleviate it.
In that case the belief is that people get what they deserve. If bad things keep happening to you it must be because you're doing something wrong. Because the world is overall just.
In this case people are willfully encouraging a certain business practice by giving those businesses their money. Then they complain about the business practice they just supported and look to the government to force the businesses to behave differently. They're not being victimized by a harsh world and being told it's their fault. They're willfully victimizing themselves.
This is different if there is some kind of government enforced monopoly interfering in the market. But the end result is the same in that case. The business isn't the problem.