In Thailand, while haggling over prices, if one finds that a bar of soap is too expensive at a particular shop, he can walk further up and easily compare prices at another shop. He then returns to purchase the cheapest one. At the same time, should he pause for a moment here to recall which shop he bought the soap from, he probably can’t. This is because there were so many shops selling the same product that all vendors become but a faceless one.
That is the ideal effect of “free market”, in which competition competes supernormal profits down.
But we have to be careful about what free market really means. Free market means “no government intervention”. It doesn’t mean competition in which consumers benefit as a result of cheaper goods and services as painted in the scenario at the head of this post.
To believe that free market will lead to cheaper goods and services is at best an ideology, not a reflection of a fact, and this is exactly how governments sell us the idea of free markets; it supposedly leads to increased competition and hence cheaper prices for all.
Mistaking cartel for competition
An example of it is a statement made by my neighbour at my factory. She said that our national supermarket Aunty. U. C. was set up to compete against Cold Storage to bring prices of goods and services sold at the latter down. I replied with the opinion that the prices at both supermarkets reflects a cartel arrangement instead, not competition, and it keeps profits for both abnormally high. After all, their prominent names in an environment where the faceless vendors are almost completely absent strongly suggest it.