Model, Market, and Monopoly

Markets are rarely, if ever free. Truly free markets are a theoretical concepts like zero or infinity. We can imagine them, but they may not actually exist. Monopolies form. Government interferes. Supply can be cut off. New technologies can violently disrupt society. Imbalances in other markets can interrupt distribution.

Markets occur whenever we sell a product or a service. 

Markets are many and diverse. Markets can be found in the parking lot swap meet or a professional trading floor.

Free markets are thought to find the optimal price and best distribution of goods and services.

Free markets are uncontrolled by government.

Free markets have no monopolies. 

Mark the monopolist wanna-be

Managing Markets

I once was manager of products and services in markets. My job was to find out what people's wants and needs were, find a solution, then deliver it to them. For several years I specialized in the real estate industry providing technology and processes. The real estate markets spanned multiple countries and cultures.

I worked for corporations. Corporations are a legal tool owned by people. I was labor. I worked for other people. Someone else owned the capital and resources. If I did well at my job, owners made millions in profits. If I failed, owners lost millions. A salary was my compensation for pieces of my life's time.

We built databases of properties for sale. We had databases of transactions. We created and maintained records of government property tax roles. Marketing materials to help sellers find buyers. Catalogs to help buyers find sellers. Accounting software to optimize costs. Estimating software to predict individual transactions, local markets and national trends. Tools and training to automate business processes. Information about the market and where the best deals where. Software to help local governments predict revenue.

Modeling market data

Finding out what peoples wants and needs are is the hard part. What people say they need and what they actually need often don't match up. Of course I would listen to what people said and ask many questions. I also followed people, watching them. Observing their behavior and taking notes often revealed unexpressed needs. Watching closely provided deeper insight to the nature of their activity. I studied their suppliers and customers. I followed the paths of their resources from creation to destruction.  I came to understand the structure and flows of each market I competed in.

Designing solutions is more my suit. Doing studies and creating graphs. Designing structure and process .  Long arguments in front of white boards building models of market behavior.  Taking those models “out into the field” for testing to see if they worked. Revising and editing the models until the product or service became as profitable as they could be.

Controlling local supply  of resources

Building Monopolies

Designing a product is by definition an anti-free-market activity. One must engage in thinking like a socialist dictator in order to control a market. Every day I tried to figure out how we could monopolize markets. Corporations want high, steady income. Getting a monopoly on a market is the best way to ensure that.

Finding a resource to control helped build a monopoly. If you can control a fundamental resource in one market, you can monopolize many markets. Being the entry point for the supply of a resource is a common method. Data about the market is one of the best resources to conquer.

Dreams of monopoly

We spent a lot of effort making the best data entry systems possible. The easier it was to put data in our system, the more the market did it. The more data they gave us, the greater the control we had in the market. At one point, well over half of the U.S. property market came into systems we controlled.

My labor was not in a free market. I had signed away my right to compete with the owners. They wanted my labor as a steady, high resource. The corporation had a monopoly on my labor. Luckily the market for my labor was made free. I could wait a year and the contractual provision would expire. Signing a new contract with a competitor was a good move for my income. It still cost me a year of my life to buy that market freedom.

Monopolies typically maximize their profit. A corporation with a monopoly wants to produce fewer goods and selling them at higher prices. Monopolies destroy free markets.

In a free labor market
children are a resource

The Real "Monopoly"

Real estate brokers have taken control the market data since I left the industry. Real estate brokers are “middle-men” standing between the buyer and the seller. They have an effective monopoly on the information about the supply of goods in that industry. Claiming they provide a better service, they have built up barrier to entry requiring you to belong to their trust (monopoly). You must sign away your free market rights to be able to participate in the property market.

It is possible to use For Sale By Owner (FSBO) methods to sell or buy houses. This is a small niche of the market however. Individual experience may vary, but it is generally more difficult to sell your house. Real estate brokers will typically not work with FSBO. Real estate brokers work hard at keeping FSBO to a minimum through laws and the control of information.

A home is the single largest purchase most people make in their life times. Most middle class citizens buy two or three homes in their lifetimes. Typically we buy a home when our children are born or we retire.  Most real estate market transactions go through the broker's monopoly. One group or another has monopolized the real estate data market for so long, we accept the monopoly as normal and are unaware of how much it costs us.

Cheating unbalances markets

Free Market Myth

The idea that we can just “free” our markets and they will we will all prosper runs against my experienced in business. Free markets are often more myth than reality. Many of our markets are operated by or as monopolies.

Disruptive technologies like the printing or the internet have broken information monopolies. A wise owner looks for such technologies and tries to monopolize them before they disrupt the market. With the financial power coming from the monopoly, this happens frequently and the monopoly continues on.

Trade associations are often used for groups of owners to control markets. The National Association of Realtors is a very powerful organization that does this for real estate. They have been actively involved in keeping control of the data about real estate for over a century now.

Government is One Answer

We can use our government to break up monopolies. The power of government is used to force those who would control a market to let go of it.  Government is often the proper tool to keep markets free from monopoly.  

Teddy is still rock solid

Teddy Roosevelt was a progressive Republican who had his face put on Mount Rushmore because he broke up monopolies. Teddy was known as the “trust buster”. He offered a “Square Deal” that regulated the business practices of monopolies to guide markets toward more freedom. He facilitated negotiations between labor and owners to break up monopolies on labor.

There are those among us today who think “markets should be free”. They operate under the idea that perfect competition can exist. My experience of reality indicates this is not so. The people who want this may well just be trying to monopolize markets. I can not prove that all business people want to have a monopoly. I have met enough of them to believe many do.

Mapping Healthcare (Part 2)

Healthcare is getting more expensive.  From my personal experience it also seems inefficient.  I have been investigating public data about what is going on in the United States with healthcare.  Here and in the previous post are what I've found.

Life expectancy

Live Long

States with high insurance rates are more likely to have citizens with longer life expediencies.

It could be argued that better healthcare helps people live longer.  It may also be that those who live longer take better care of themselves.

Other factors at play are education and wealth.

Where money flows

Medicare Spending

Those states with the highest spending per person on Medicare tend to be uninsured.  This places a great burden on the state and nation in caring for them.

These federal and state transfers of wealth between citizens subsidize those in the greatest need.

Weighty matters

Obesity

Obesity is high in states with the most uninsured. Obesity-related conditions include heart disease, stroke, type 2 diabetes and certain types of cancer, which are some of the leading causes of preventable death.

In 2008, medical costs associated with obesity were estimated at $147 billion; the medical costs for people who are obese were $1,429 higher than those of normal weight.

Those who place themselves at the greatest health risks cost us the most.

Coughing it up

Smoking

Smoking takes a large drain on our healthcare resources.  Adult smoking rates vary across the US, but the states with the most smokers are in the Midwest and Southeast regions.

Cigarette smoking has been identified as the most important source of preventable disease and illness.

About 8.6 million people in the U.S. have at least one serious illness caused by smoking. For every person who dies of a smoking-related disease, there are 20 more people who suffer from at least one serious illness associated with smoking.

Working for insurance

Unemployment 

Our standard in the United States is to have health insurance through our employment.

Unemployment seems to be a factor in healthcare rates, but is not necessarily the determining factor everywhere.  These short term fluctuations in prosperity may only have marginal effects on the ability to obtain care.

The elderly especially are often not employed and therefore more reliant on government for care.


I will not pretend to have an answer for our healthcare challenges.  My experience is that our system is inefficient.  It is clear that healthcare costs are rising at the same time that access to care is decreasing.

More personal responsibility for our actions is required.

I believe we have a moral obligation to help those who can not help themselves.

Finding a balance that reduces expenses while improving care and access is good for the country.

Part 1 here.

Mapping Healthcare (Part 1)

Having become employed by Pfister Waggen (an industrial scale maker) I was inducted into the German national healthcare system.  Early after starting my job, a physical was required in order to establish a health baseline.  Stripped to my underwear, I stood in a long line of men slowly plodding from station to station having my blood pressure taken, my ears examined, my body prodded and poked.  While the experience was dehumanizing, it seemed to me the very symbol of notorious German efficiency applied to universal healthcare.  It was a very similar to the process used by the U.S. Army on new recruits.

Efficient and dehumanizing medical exam.

In America today, my lovely lady has several health issues requiring her to see many different and expensive specialists.  Hours are spent waiting in rooms, moving from one clinic to the next at great cost.  The doctors are kind, helpful and the experience is as pleasant as it can be.

There appears however, to be much time and resources dedicated to the infrastructure of care rather on than on the care itself.  Each professional specializing in one narrow area with staff and resources duplicated in many places.  Each office has separate records and billing to support their independent, decentralized infrastructures.  The inefficiency of the system stands in stark contrast to that of the German experience I had.  It is humane but wasteful.

In these two posts are the results of my exploration of public data about what is going on in the United States with healthcare.  I wanted to know how states compare with cost, access, and need for healthcare. Note you can click on map captions to see the source of my data.

Health Insurance Rates

Who is Insured?

About 1 in 6 United States citizens have no health insurance.  This represents about 54 million people who rely upon charity for accident, disease and routine care.

The rate of non-coverage is growing at  about 1% a year, meaning that over 3 million people a year lose their insurance and are at greater risk.

The elderly and the rich are are actually gradually improving their access to health insurance, while the  poor and women are losing their access.  This is happening despite the Affordable Care Act (Obama-care) allowing 18-25 year-olds to remain on their parents insurance plans.


Costs are Rising

The current trend in healthcare expenses is not sustainable. Costs of healthcare are increasing much faster than the number of people requiring healthcare.  These costs are robbing the United States of our ability to compete globally by diverting money from savings, investment, retirement, and diverting more and more of our labor pool.

Access to healthcare

Sickness Sucks

No one wants to die.  No one wants to be sick.  Given enough resources, we would all do what ever it takes to help ourselves live as long as we can.  We also want to stay as healthy as we can.

This implies that demand for health will remain high, no matter the level of the supply.  When supply and demand do not find a balance, markets fail.


Government or Private?

Since healthcare demand may always be greater than healthcare supply, using a purely market solution to find a balance is probably not practical. Some kind of intervention to keep the market in balance seems prudent.

A pure government solution has an associated bureaucracy.  Bureaucracies tends to grow when civil servants are not tied directly to economic outcomes.

Neither an all government or all private system will find balance and get the greatest bang for our buck with healthcare.

Conservative Identification 

Conservative Identification

Our uninsured are concentrated in the southern states and sparsely populated mountain states.  While not universally true, self identified politically conservative states are more apt to have people without health insurance.

This map displays the "conservative advantage," defined as the percentage conservative minus the percentage liberal in each state.  When compared with the other maps here, it generally appears that conservative states have more need for healthcare and less of it available.

Here is a good overview of the differences between conservative versus liberal views on healthcare.  In simple, over-generalized terms, conservatives view self-responsibility to be the driver for whom should get healthcare, while liberals tend to view healthcare as a social safety net to be provided to all in need.

In the next post here, I will investigate some of the demand issues with the U.S. healthcare system at a state level.

Fearing the Reaper

You are going to die. Eventually. You do not know how yet. But you will. 

Life is pleasant and dying is it's end. Most people fear death or least want to put it off as long as possible.  The reaper, in the end, comes for each and every one of us. 

Human nature alarms us about some causes of death more than others. 

We are more apt to fear flying in airplanes more than car accidents. Yet car accidents are far more likely to kill us. 

% Chance you will die of particular cause
(click graphic to expand)

We fear gun violence more than falling, yet falling is twice as prone to do us in.

The National Safety Council has estimated your chances of dying from various causes based on death certificates and the census data. 

The results should inform us on what we really need to worry about.

There is a higher chance you will die from suicide than from a gun.  Yet how many of us have guns to protect ourselves from some perceived potential threat?

More detail on the smaller risks
(click graphic to expand)

The odds are low you will ever need a gun for self defense.  Do you ever think about how to protect your loved ones from suicide?

We sit transfixed to our televisions watching weather disasters, yet walking across the street has a better chance of killing us.

Clearly our bodies break down from disease more often than accident or violence. Eating too much, smoking, and excessive salt take their toll on us. Natural disaster, fire and drowning may scare us, but are relatively not a threat.

Media shows us fiery plane crashes, crazy people shooting up schools, cataclysmic storms and we watch these dramatic events unfold with terror. Yet their actual threat to us is very, very small. The images and sounds we hear skew our opinions and voting patterns out of proportion to the reality of the threats.

As mature adults, we should have a more accurate view of the threats to our persons and those we love. What we fear should be what is apt to kill us. These real threats deserve our attention.

Here are some odds by cause of death to consider:

Cause of Death	Odds (1 in X)
Heart Disease	6
Cancer	7
Stroke	29
Auto accident	98
Poison	126
Falls	163
Firearms	321
Smoke/Flame	1,344
Airplane	7,178
Storm	29,196
Earthquake	97,807
Death Penalty	111,779

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Libido Amor

Sex is fun. Sex is for procreation. The tension between these two facts is a current pushing many of society's controversies. Marriage, birth, struggle for resources, and more are all tied to our sexuality. Part of our definition of morality comes from how, when, who, where and why we have sex.

Won't you be mine?

Eros Begetting

Lovemaking is a delight. Nerves from all our senses trigger endorphins in our brain. Smell, touch, sight, and even the sound of our lover all release rushes of these hormones. Memories of these sensations drive us in anticipation. Memories of these sensations give us comfort when far apart.

Copulation is for conception. Animals reproduce by sharing genetic material. Egg and sperm unite, combining codes into something new, yet similar to both partners. We are biologically driven to make babies with the onset of puberty. Our physical maturity gives our offspring the best chance for survival.

Lust for the fit!

Lustful Nature

Our first experiences of sex are usually mechanical and surprising. “Gosh, that felt good!” or “What the heck was that?” are common experiences of unexpected physical stimulation in early adolescence. The brain is hardwired to seek out the endorphins produced by sex.

In puberty we begin to think about “the other” differently. We experience almost overwhelming desire. We begin to be driven to competing for the ability to procreate with the fittest around us. Our first clumsy attempts to eliminate our competition and attract potential mates are a hallmark of this age.

Until death do us part...

Restrained Nurture

Family and culture push and pull at us, creating our individual thoughts on sex. We define rules and institutions that will enable better reproductive chances for our offspring. Marriage is a social structure that defines our basic sexual practices.

Calls to abstinence exemplify the virtue of self discipline. Birth control attempts to side track desire's result. Abortion is sought to overcome abstinence and birth control's failure.

We wish to protect children from reproducing too quickly. Often we do not teach them about sex with the hope they will not be tempted. Bodies overwhelm our intent and ignorance often leads children to tragedy. Clear conversations of understanding promote healthier attitudes and give will the chance to halt desire.

Parents push our offspring to reproduce quickly once married. We desire to see our strand of the chain of life continue forward. We fear our gene set becoming extinct, especially while we are alive to have any control of the outcome

Love's Labor Won

Even the word “love” itself contains the inner struggle for reproduction. We express our adoration, our respect, our desire to do better for the other when we tell them of our “love”. The drive to procreate, to copulate with wild abandon is also called “love”.

Love's meaning evolves through life as a basic part of maturity. We slowly grow from lust for the other to honor in their service. The effort of passion gives way to the labor of kindness. 

We start holding hands one way and we end holding hands another.

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Marriage Matters

Marriage is at the heart of what makes a family. This traditional union between two people is a very old one.  To many, the institution of marriage is under threat. Historically and in our time we have been and will continue to transform the nature and definition of marriage. Where will it take us? Will marriage as we know it survive? Probably not. Something similar and different will take its place.

Queen Victoria Gets Hitched

Marriage has meant different things.  Marriage changes meaning with cultures and time. It changes slowly enough that we see multiple generations living through similar interpretations of marriage and consider our current definition to be the only one. Let us examine societies and eras in history to see how this is so.

Ancient Women as Property

Marriage in old Jewish tradition was about procreation to perpetuate a a tribe. Weddings were a celebration of the daughter's family accepting a father's purchase of her. The bride price was not paid by the potential husband, but rather the groom's father.

The Sultan's Harem

Women in this time were considered property. Men were economically responsible for women. Women gave all their labors in service to their man. Divorce, the sale of your female property, was not allowed

Men could have many wives and even concubines. As property, women could be considered a sign of prosperity and wealth. Strict hierarchies of wives were maintained with one woman being in charge of the others.

Sex outside of marriage was forbidden by law. Relationships between men were supposed to be brotherly only. Sex between members of the same gender could be punished by death.

Greek Domestic Bliss

Roman Patriarchy

In ancient western civilizations like Greece and Rome, marriage was a basic social unit. It was not considered a romantic union. Marriage was considered a mark of citizenship and coming of age. Men who were not married were treated with scorn as not fulfilling their civic duty.

Marriage was neither a government or religious institution in Europe at this time. It was a contract between large family units. Fathers arranged their marriages for their sons and daughters. Choosing one's own partner was considered rebellious and could even be punished by death. The contract of marriage was signed between two fathers, not the son and daughter. Typically men were ten years older than women at the time of contract. Breaking the contract ended the marriage.

Giving of a Roman wife

Prostitution, male homosexuality, and concubines were common in some areas, especially ancient Greece. Intense emotional relationships between men were considered a normal part of life. Sleeping with someone else's wife however was taboo universally as it made identifying the father of a child difficult.

Dark Ages Church Law

The biggest change in the European marriage customs occurred as Christianity became a state religion. Over several generations divorce laws were tightened until almost it became almost impossible to leave one's betrothed. Marriage was a gift from God. Divorce was only possible by the death of one's spouse.

Church controlled society through marriage.

Simultaneously the Catholic church, as the state governmental authority, became the arbiter of marriage by requiring the ceremony of a church sanctioned wedding. Permission to marry was the church's to decide. Catholic law required that accurate records be kept so that no marriage could occur by blood up to seven generations back. Marriage was the uniting of families by God. With marriage the two united families became one.

Romantic love was not an issue in this time and place. Love was something God gave to your marriage as time passed. While no longer property, brides were expected to be subservient to their grooms for life.

During this time having multiple wives, visiting prostitutes, concubinage, and homosexuality were banned as sin.

Reformation Divorce

When Martin Luther nailed his new ideas to the door of his church, the institution of marriage under went slow but serious change. Protestants saw marriage as a secular activity, not having to be ordained by God. English Puritans even passed a law stating “Marriage to be no sacrament”. They brought this view to America when they migrated, developing the concept of “common law” marriages.

Martin Luther thought marriage
needed no church

With the French Revolution, main land Europe declared that marriage was a purely civil institution. Religious weddings were allowed only after a civil ceremony in front of a government official.

Divorce was also considered no longer sinful with the Protestant reformation. Some sects even believed that marriage could be broken by the couple at anytime for their own reasons without the law or church involved.

With the arrival into Maryland of a large number of Catholics a diversity of opinion spread through the colonies. Each American colony made their own laws about what constituted a marriage and divorce.

With no legal or church sanction,
slaves "jumped the broom".

Love Rules

In Victorian England, our modern sense of romantic marriage came about. Choosing one's own true love after courtship was enshrined in tradition mimicking the Queen and Prince Albert's inspiration. The virginal white dresses of brides became all the latest fashion and have continued as a symbol of union ever since.

With the Victorians, divorce was seen as a betrayal of love. While legally possible, it was highly frowned upon and rarely happened due to its stigma as failure.

It was during this time frame that the novel as a literary form spread across Europe. Books by authors extolling romance were widely read.  Novels about love generated a new thoughts of passion related to courtship and marriage. These appeals to emotion brought down the idea that parents should choose their child's life partner.  Love came before marriage.

Dating and Divorce

With modern technologies came a new sense of marriage. Dating started spreading as a social institution as late as 1920. In heavily commercial societies, some even began advocating "try before you buy", putting sex before marriage.  During this period, all parental controls on marriage where abandoned.  Laws came into being governing the "age of consent" protected children from being caught up in marriage too early.

During the 19^th century divorce in the United States required finding of fault in either the husband or wife. One party must be injured by the other by abuse, desertion, adultery, inebriation or impotence. Without proving in court that these things had happened, marriage continued until death.

Prior to becoming a place to elope to, Nevada was the haven for an easy, no-fault divorce. Starting in the mid-1950's rules across the United States began to change, allowing simple divorces without placing blame. It wasn't until the early 1970's that these laws changed federally and divorce became easy.

The liberalization of divorce law had a major impact on marriage. Unhappy couples could now break and make marriages as they wished. Women with newly won freedoms and economic independence no longer were kept bound to house and husband.

Threats to Marriage?

Recently we are struggling with the idea of allowing gender-less marriage. This effort has been an attempt by gay and lesbian couples to gain legal privileges, freedoms, and rights. Against them are arrayed largely religious groups who see their activity as a threat to the institution of marriage.

Sulu's special day.

Saying that marriage is about bringing together men and women so children can have mothers and fathers, some think allowing these non-traditional marriages will cause a break in the fabric of society.  Same sex marriage is declared an "untested social experiment" on children.

Research indicates that parents' financial, psychological and physical well-being is enhanced by marriage and that children benefit from being raised by two parents within a legally recognized union. 

Science has been generally consistent in showing that lesbian and gay parents are as fit and capable as heterosexual parents, and their children are as psychologically healthy and well-adjusted as children reared by heterosexual parents. 

In 1996 the Defense of Marriage Act (DOMA) passed in both houses of congress by large majorities. DOMA codifies the non-recognition of same-sex marriages for all federal purposes. DOMA has since been found unconstitutional in eight federal courts, including the First and Second Circuit Court of Appeals. In response, the Republican leadership of the House of Representatives instructed the House General Counsel to defend the law using taxpayer dollars. 

Conclusion

Ron and Nancy cut the cake.

Definitions of who can get married, how they can get married, and when they can divorce has changed with time. The relationship between marriage, law, and church has evolved. The rules for divorce morph.

What we grew-up understanding as "marriage" is about our culture. What we know as children is what we see as “normal”.  Marriage has not always been one way or another.

I am neither advocating or denying any particular change to the institution of marriage. Rather, I am claiming that we should not “stay the course” just because it is familiar. Embracing new understandings can enrich us all.

Changes to the definition of marriage have had affects on society. We need to consider them and choose wisely.  Change can be positive. 

While we may dislike or fear changes to marriage, we can not claim that we are the first to modify it's definition. In fact, we are irresponsible if we do not continue to modify marriage's meaning.  We have an obligation to climb the ladder of freedom for future generations.

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Citizens in Transition

Great events separate the people of the United States into generations. War, prosperity, and social events all contribute to forming citizens in an age. Our parents guide us through childhood to become adults in the culture currents of our times. Events in our lives define us into distinctive generations.

Transitions of  citizens.

Those who grew up in the Great Depression and fought in World War II were named by Tom Brokaw to be the “Greatest” generation” for their sacrifice and service.  

The Korean War and the start of the economic boom that came after world conflict defined those we know of as the “Silent" Generation.  

A huge boom in births lead to a population heavily influenced by Vietnam and the social turmoil created the “Baby Boomers”.  

“Generation X” had information technologies like the personal computer and cable television as their bread and butter.  

An economic boom and a war on terror heavily influenced the most recent of these generations of citizens, often known as the “Millennial's” or “Generation Y”.

Recently the Pew Research Center released a report highlighting the differences between these groups. Some of the differences between them are startling. They point to large demographic trends that will effect our nation and even the world over the coming decades.

Marriage

One of the largest trends is in the break down of traditional marriage.

Less than half of “Millennial's” are marrying when compared to the “Greatest” generation. 

This trend has been going on for many decades.  Some of have attributed the decline in marriage to the legal redefinition allowing for no fault divorce.

Population

The huge influx of boomers still dominates the population. Sometimes referred to as the “egg in the snake”, the huge numbers of births in the post World War II has moved the largest populated generation slowly through society. 

 As they age in the next few decades they will place a large load of support on the less populous generations that followed them.

Education 

The Feminist Movement has had a major impact on the educational differences of the generations. The Title IX act of 1972 forced schools to give women equal opportunity in education across the land forcing changes that are apparent today.  The country is becoming more highly educated with each generation.  Note that  the "Millennial's" percentages may be lower than for other generations as  they have had less time to finish college.

Income

Along with more education, incomes for the generations have risen. 

Considering that the peak earning years are age 40 to 50 for most people, the Millennial's are doing surprisingly better than their parents did at their age.

Factored into median household income, although not shown specifically in the graphs, are that many families have become "two income" with both men and women earning.

Military Service

Lastly is information that should give us pause. With the advent of a volunteer military service, the connection between voters and military members has been shattered. 

The number of citizens who are veterans and bear the responsibility for defending liberty has seen a sharp decrease since the 1970's when the draft was ended. 

The long term effect  to our social contract with each other has yet to play out, but will over the next decades.

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