Truth In The Longest of Terms

Mar 11, 2008  |  Michael Wurzer

Greg thinks I’m benighted (“being in a state of moral or intellectual darkness; unenlightened”) and is no longer participating in the discussion, but I think there is more to understand here, if only for myself. Greg extols the virtues of capitalism over government correctly:

Socialism fails, Fascism fails, Progressivism fails because they are all attempts to supplant the sometimes-imperfect reason of the marketplace — the weighing of incentives and disincentives — with the consistently-perfect irrationality that is brute force.

My point, which Greg calls fear, is that substituting one “seal of approval” for another because the market will eventually correct one but supposedly not the other ignores the very real and long-term impacts the “sometimes-imperfect” decisions of the market can have on people, especially when companies evolve into market-dominating positions. The difference between the power of a government and a market-derived monopoly (which have many shades of market power) is not a bright line, despite that one is subject to a vote and the other the market. Or, at least, the time to correct the sometimes-imperfect decisions of a company with market power can be so long as to make ignoring it (to turn Greg’s artful phrase) “childlike wishful thinking — endearing only in children, and, even then, only for a little while.”

Why wish for companies to be put in the position of judging others? Merely because one believes a “seal of approval” is needed for the otherwise ignorant consumers who supposedly can’t think or ask questions for themselves? A corporate “seal of approval” is needed to create a more perfect capitalism? I disagree. In fact, a “seal of approval”, wrought by humans and only corrected by markets in the longest of terms, is just as likely to create more disinformation as information. Instead, I suggest buyers beware. Think for yourselves, without relying on any imprimaturs for success. In doing so, you’ll be pursuing and creating the truth of capitalism, which abhors king-makers of any kind and for any term.

3 Responses to “Truth In The Longest of Terms”

  1. Wow, there are several points of argument to consider here. Allow me to interject with a few salient points of fact:

    The notion that open markets (free from government co-opting) can self-police abuses of power is certainly challenged by the recent disillusionment with bond insurance agencies: Market forces created the “AAA” rating for bonds, and market forces corrupted the meaningful value of that rating. This bolsters Mike’s point on inherently-imperfect “seals of approval”, and it wasn’t to satiate “dumb” consumers.
    Many practices and movements discourage competition in non-NAR MLSes or real estate markets by validating exclusionary tactics. Look to the details of the RedFin case, the farcicle nature of most NAR certifications (you, too, can be an expert in just 4 hours!), or just about any listing display or distribution Policy.
    The enrollment of non-Realtors in MLSes that permit licensed real estate agents with NAR affiliation is increasing; in some MLSes, it’s accelerating rapidly. Hunger has placed business continuity ahead of bureaucracy.

    I also love the ongoing comparisons between Real Estate and the dot-COM boom of the late nineties, primarily because I participated in the latter and get to be an inside observer to the former. I think the NAR has had the effect of dampening the contraction that actually cleansed the talent pool in the dot-COM world. The bar of quality to become a Realtor is without doubt intentionally low, while the monetization of membership is ridiculously high. This fosters policies in which tenure begets reputation (whether deserved or not) and the bottom-feeding transients finance the protectorate.

    You will not find an answer online; almost everyone who has anything to say also has some modicum of reputation to protect and bias is always expressed in extremes.

    -Matt

  2. Correction to the above: The enrollment of non-Realtors in MLSes that permit licensed real estate agents WITHOUT NAR affiliation is increasing; in some MLSes, it’s accelerating rapidly.

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