Saturday, June 18, 2011

Salesmen Add Value In a Free Market

KMart just canned 700 appliance salespeople.  This is likely a good and inevitable decision when sales people are no longer necessary.  When we can go on the web and compare features and learn prices, of the extremely few options available, who need s a salesperson, who today just tries to rip you off with an "extended warranty."

Before I get back to salespeople, let me say something about entended warranty.  You already own, when you buy something, the right to "merchantability." That is to say, what you buy must last as long as such items normally last.  A car should last about ten years or 150,000 miles, a TV 20 years, a blender 5 years, and so on.  If not you have a claim against the vendor.

Now I bought a blender of top name brand from a large retailer.  The blender conked out after six months of light use.  I happened to have the receipt, and noticed in the instructions (which I read trying to revive the blender) a requirement that if the blender breaks, I should ship it, at my expense, to some place in Tennessee to have it repaired.  Well, a couple of problems, my relationship is with the retailer, not the manufacturer, and I bought a blender to mix drinks, not to ship it to Tennessee.

The receipt stated the retailer offered me a 90 day money back guarantee, and suggests after that I send it to Tennessee.  Well, the law allows a five year guarantee.  But as a practical matter on a $35 blender there are no good options.

So I went in and bought another blender, the exact same one.  I took it home, swapped the new parts out the broken one, and I returned the broken one a few days later with the recent receipt for a refund, getting around their system they set up to get around my property rights.  I made the system work the way it is agreed to work.

Now, back to appliance salesmen.  A man across the street raised a family of twelve kids on the salary as an appliance salesman.  This was back when we had a much freer market, there was far more innovation, and far ore options.  In a free market a salesperson is critical because they match the needs of the customer to the right product.  they also communicate the needs of the customers to the manufacturers.  Under this false right of intellectual property, we have a much diminished innovation and  the division of labor that comes from innovation.

So we end up with so few options, that who needs a salesperson?  An internet check on the comparisons and prices will get you to a decision (from a narrower range of options), no salesperson required.

The two great inhibitors to our economic recovery are IPR and government regulation.  IPR constrains innovation, and govt regs crush anyone who finds an opportunity.  Taxes are not the problem, because it is the ultimate consumer who pays all of the taxes ever paid on any given product.  And proof taxes do not really matter is the govt actually cuts those once in while.

Now the tax code does cause govt subsidized businesses to launder profits overseas, like Google, GM, General Foods, and GE.  (General Foods, General Motors and General Electric all were formed when USA decided to become empire, and these companies would provide all of our food, motor and power needs.)

It is this benefit of laundering of money overseas that has driven these govt subsidized businesses to offshore to China, which in turn has gained our precious IPR.  Under license, of course.

The Chinese see our system for what it is, and have refused to get caught in it themselves, but have certainly agreed to take it over.  Labor action in USA may challenge the status quo.  Labor action in China will not challenge the status quo in USA.  So no labor, no challenge.

What labor we have is govt unions complaining they need more.  And more.  Govt unions are house unions, something repugnant to any labor movement.  But labor leadership in USA was bought off, or in the case of Hoffa, murdered.  It is what we get when we define our nation as a monopoly on violence within our territory.

Cut government back to 1950 levels, and raise taxes to pay off the debts, repudiate any loan guarantees to private companies, end the wars, and watch USA become the engine of growth the world will admire.


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