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  • Aptera: The Failure of Design By Stated Preferences

    Posted by Shannon Love on December 5th, 2011 (All posts by )

    Aptera, the 120-300mpg car design, has shuttered it doors for good as I predicted it would three years ago.

    The failure of Aptera and similar designs reveals the real-world functional differences between stated preferences i.e. what people tell themselves and others they want, and revealed preferences i.e. the things people actually end up choosing. People tell car designers and manufactures they want and will buy an inexpensive, efficient, two-seater commuter car but when it comes to putting money down for one they don’t follow through.

    The conflict between stated and revealed preferences has significant political ramifications.

    Looking back over my previous post on Aptera and the subsequent comments, it’s clear that Aptera specifically failed for three major reason:

    1. It was uni-dimensional design that sacrificed every other functionality for fuel efficiency.
    2. Cars are general tools. Every if  people spend 80% of their milage commenting, they still have other task the car needs to perform to some degree. A car that cannot fulfill these secondary task necessitates that the car owner spend time and money finding other solutions. That additional expense usually destroys any economic advantage the unidimensional design purports to offers.
    3. The Aptera specifically represented nothing knew. Everything in the design had been repeatedly tried before and always failed. Specifically, highly efficient, two-seater commuter cars using a wide array of  technologies have been repeatedly offered since at least the 1920s in all parts of the world. They all failed to catch on.

    The last reason brings me to the “Smart” car. Marketed as “unboring”, “uncluttered” and the “uncar”, they should have added “unusable” and “unsellable”.  The Smart car is another in a long, long, long list of attempts at a highly efficient, two seater, urban car. Arguably, it could be the best attempt ever made. It’s failure should, but won’t, drive a stake into the two-seater commuter car concept.

    The Smart car’s design and technology are impressive.

    Safety is a concern in small cars so the Smart car is basically an overbuilt roll cage with wheels on the conners. It is physically impossible for the momentum of the car to supply enough energy to breach the passenger compartment i.e. you can run the car into anything at any speed, even something large enough to bring it to a dead stop, and still not breach the passenger compartment. Of course, this doesn’t protect against driving off a height, having a tree-limb or rebar punch through or getting punted by a larger vehicle but this is still a really good design given the limitations of size. It’s probably pretty safe for most dense urban environments.

    The interior is roomier than many larger cars even for tall people. There is easily accessible cargo space. Acceleration is okay and fuel economy is great. The car is highly customizable which people like these days. Plus, it has the image of being economically friendly which is a big selling point for the urban hipsters.

    Despite this technical excellence and marketing edge, after an initial flurry of interest, Smart car sales plummeted and have remained anemic.

    People keep trying to sell this type of design because it feels intuitively like it should work. Having a jaunty little car that can let one or two people zip around town seems very reasonable. I think everyone has at one time has thought, “I wish I could have a car without the hassles.” People believe they want an inexpensive to buy, inexpensive to operate, clean, quite, zippy and easy to park vehicle .We also believe that we will tolerate the tradeoffs of capacity and functionality that will require.  We honestly tell market researchers we will buy such a car. That is why dozens of manufactures over the last 90 years have tried to make this two-seater commuter car design work: Everyone tells them to.

    The two seater commuter doesn’t work because while it meets most transportation needs in terms of overall milage and reason for miles driven, it doesn’t meet enough. Seemingly minor lapses in functionality cripple its overall utility and doom the design.

    By analogy, imagine two road systems, one a pristine, modern four-lane highway and the other an old, crumbling two-lane. Now imagine that both roads run in parallel for a hundred miles/kilometers to the same destination. The four-lane would seem clearly superior but what if in that hundred mile/kilometer run, there is a 10-foot/3-meter gap that the old two-lane bridges but the four-lane does not? Suddenly, the four-lane is nearly useless for making the whole trip and people will prefer the teeth rattling journey down the two-lane instead. People might use the four-lane for the 50 mile/kilometer trip on either side but if they don’t know for sure how far they will be going that day, they will pick the old road. In the end, the majority of the traffic will end up on the old road because all things considered, it performs the function of a road better.

    The two-seater has several of these seeming insignificant functional gaps that it does not “bridge”. The real deal killer seems to be the lack of any possibility of squeezing in four people. Even for childless, 20-something, urban hipsters, cars have a social function. Want to go out once a week with three friends? Someone else is driving. Need to go to lunch with coworkers? Someone else is driving. Want to buy a bookshelf at Ikea? Hit up a friend with a four-door. And so on.

    The original Volkswagen (People’s Car) design of the 1950s was about as minimalistic a design as one can get but it succeeded because you could at least theoretically cram four people inside (5 or 6 if they were friendly). Most people who drove a Volkswagen usually drove alone but when they needed to haul more people or stuff they could. If a two-seater commuter car would succeed anywhere it would be crowded Japan in the 70s but even the tiny original Honda-Civic, could hold squeeze in four people. The Indian Neo seats four as well and looks to succeed.

    The Smart company seems to have come to the same conclusion and will replace the two-seater design with a four-seater. Most likely, it will be “two” little, to late . The stigma of a failed design will have attached to the brand. A four-seater versions won’t stand out as so “smart” and will look like just another of the many small, cheap, boxy cars made for first time buyers.

    In the end, stated preferences are really hypothesis i.e. guesses about what we think we want or what we think will work. Revealed preferences are really the experimental results we get after we test the stated preference hypothesis in the real world.

    The free-market eventually always works on revealed preferences. People who supply goods and services usually start with their customer’s stated preferences but very quickly the customers reveal what they will actually put down money for.

    Politics works on stated preferences. It’s starts with stated preferences and pretty much stays there. Individuals rarely have to expend their own resources to reveal how they really evaluate a political idea. Even if they do, they have to bundle that revealed preferences together with hundreds of stated preferences when they vote for candidate A or candidate B.

    Experimentation trumps educated and uneducated guessing. It’s no mystery why the experimental free-market performs better at actually solving problems and making people content than the babbled of guess-work that drives government.

    Leftism basically boils down to running almost all of society based on stated preferences. Leftists pseudo-intellectuals create persuasive rationales, people decide that sounds good and then the entire polity hand and hand jumps off a cliff because everyone states that is what they desire. By the time impact with ground reveals everyone’s true preferences, it’s to late.

    Aptera closed its doors after it failed to secure $150 million dollar loan from government. Given different circumstances, the ever green stated presences for an efficient two-seater commuter could have easily convinced government officials to put us all on the hook for hundreds of millions of dollars of squandered money.

    The amount of error possible from untested stated preferences is functionally infinite. The scale of error on the part of government is likewise infinite. The scale of error for the free-market is always much, much smaller and much easier to correct. Better to have the freedom to buy a two-seater commuter and learn by personal error than to be forced to drive one because everyone believes that is the correct thing to do.


    31 Responses to “Aptera: The Failure of Design By Stated Preferences”

    1. Whitehall Says:

      Seems like the Fiat 500 is jumping in to fill that gap in the market. Saw several cruising down I-5 between SF and LA over Thanksgiving. They seemed to hold their own in traffic although a collision would be another matter.

      Of course, part of the Fiat’s appeal is the trendiness factor, something the Mini benefited from too.

    2. Shannon Love Says:

      Telling the Fiat 500 is a four seater. If you’re not selling sports car or pickup trucks, a two-seater is a death sentence.

    3. Justa Joe Says:

      Are people really voicing stated preferences for something on the order of a Smart Car or an Aptera? When I saw the Smart Car initially being hyped I knew it was destined for failure in the USA. I thought perhaps it might have a market in Brazil, which is one of it’s major mfr’ing locations. You’d have to be of pretty modest means financially to actually consider this car as a worthwhile investment in other words not be able to own and operate something more substantial.

      The smart Car seems like an answer to a question that nobody actually asked. I don’t even think that it requires a lot of analysis. Only people that are trying to prove a point would buy one, and most of them probably also own a real car. It’s hard to even keep popular Cars in the USA from ballooning up in size from model year to model year. As people demand more and more features,room, and performance. Two seaters soon become 4 seaters if they want to stick around and become more than niche vehicles. There is a certain threshold of size, power, and utility a car must meet in order to be a serious car and not a novelty. Even conventional compacts struggle to survive.

      The Fiat 500 is just a conventional sub-compact. Unless they are dirt cheap I don’t see it gaining any more market than any other sub-compact. As soon as anyone is able to afford better they’re going to ditch the cheap car and move up market to something with more status, comfort, utility, performance.

    4. James Bennett Says:

      Every time I see the Smart Car ad I think of the highway between Ft Collins and Laramie, and I get this vision of the Smart Car tumbling over and over on the high plains in the wind, like a tumbleweed.

    5. S O Says:

      The Smart car is optimal for a niche; this niche is providing individual weather-protected mobility in old city quarters. Many European towns have old high-population density living quarters with inadequate parking spaces. You may secure a garage or parking slot at home, but usually fail to find one when shopping or at work.
      The car was never optimised for most U.S. cities, and even in Europe the space problem isn’t severe enough to make the niche big.

      About state-sponsored vs. purely market-motivated R&D;
      neither is perfect, and anecdotes are utterly useless.
      Empirical analysis is the tool of choice.

      Market forces are often not strong enough to enable much basic research since basic research has become very, very expensive in most fields. It’s sometimes possible to have a market-based R&D only, but that often comes at a price of allowing corporations to exploit consumers for maximised turnover, in order to give the corporations enough funds for R&D. The pharmaceutical sector is such an example. Pharmaceutics corporations rip off customers and health insurances, and then invest some funds in R&D. It’s problematic that many of these funds go to R&D of marginal societal value, but major market significance (once you push the product with more or less questionable means).
      The make up industry is even worse. Lots of R&D in manipulation of skin, but marginal utility. Many of their products were actually developed to turn women into addicts. The products damage the skin, but overcompensate the symptoms. The skin looks worse if you end using the product.

      To be honest, much market-driven R&D looks decidedly worse than even ill-advised big ticket public R&D.

      In the end, it’s important to decide on a case-to-case basis. Simple maxims rarely apply in the modern world.

    6. Jonathan Says:

      Only people that are trying to prove a point would buy one, and most of them probably also own a real car.

      I think there is something to this. When I was waiting in line to vote in November 2008, a local pol who makes a point of his green-urbanist sympathies was walking around, shaking hands and telling anyone who would listen about his wonderful new Smart car. If instead he had been talking about his wonderful new cheapest-model Hyundai or Kia people would have thought him odd.

      When I was a kid my dad had at various times a VW Bug and a Mini. They were both versatile vehicles that would hold four people. The original Mini was externally tiny but quite roomy inside.

    7. john Says:

      My wife and I just went through this choosing a dedicated commuter car thing.

      Random points:

      We did briefly consider a two seater but she felt it was necessary that either car have room for the kids in case we need to do that. Chalk one up for the idea that people want flexibility. But, we wouldn’t have paid much for this seldom used feature. However, it looks to me like having them leave out the back seats costs extra, so no problem. Since our commuter car at present is a pickup it also would have been no real adjustment.

      We were very interested in good gas mileage because of the length of the commute but found that the highest mpg rated cars are sold at a premium.

      Most modern cars are loaded down with all kinds of nonsense which is not optional. This drives cost in a tremendous way.

      In the end we ordered a Nissan Versa. One of the stats we used for comparison was cost per mile per gallon. The Versa and the Smart won, the Smart cost a lot more in absolute terms and only had two seats…

      I disagree entirely with Justa above about being able to afford more. We certainly could have afforded more, and I was somewhat tempted by the Elantra, a Volvo, and a Subaru…. but that’s where opportunity costs come in. Heated seats and a leather interior are nice but what do I not get to buy with the extra money? Even the $5K difference between a Versa and a Yaris or Elantra is enough to have the bathroom remodeled or take a heck of nice vacation or two.

      I found it very frustrating that high quality economical cars are so hard to come by. Nobody really offers one, even the Versa is a sort of half-baked attempt in my opinion.

      A friend who heard we were buying the Versa said, “I figured if you were getting a Nissan you’d get a Leaf instead of a Versa.” I replied, “You mean a Leaf instead of three Versas?”

    8. Cousin Dave Says:

      I saw my first demonstration of the difference between stated and realized preferences when I worked for a minicomputer company in the mid-1980s. In 1984, the department I worked for had gotten some Daisy and Sun workstations in house, and we had a new-fangled Ethernet LAN (10base5 garden hose with vampire taps), and we were looking at the beginnings of client-server computing. I had spent a lot of time talking to the marketers about what we were doing and what the future direction of office/industrial computing looked like to me. But they insisted that they had all kinds of customer survey data that said that customers wanted traditional minicomputers with lots of VT100 terminals, just bigger, faster, and cheaper. So the company went off and built that (they missed the “cheaper” bit by a rather wide margin).

      And guess what. By the time it started rolling out of the assembly plant in 1988, that ship had sailed. Minicomputer sales were dying and everyone was going crazy over networked workstations (soon to be desktop PCs). They let their marketing data, and their preference for marketing what they already knew how to market, blind them to what was happening in the real world.

      When I tell people about this, I call it the “Federal Express lesson”. Until FedEx existed, nobody realized that they wanted or needed it. Only a few people were far-sighted enough to realize that FedEx filled an unmet need. A lot of traditional shipping and delivery companies found that out the hard way.

    9. David Foster Says:

      Stated & revealed preferences, market research…reminds me of some thoughts from Gerald Weinberg that I excerpted several years ago…

      1)A systems analyst in a consumer products company heard that some marketing reps in another building might need terminals to access the marketing database (this was before the days of readily-available PCs). He circulated a questionnaire with the question:

      How much use do you presently make of the marketing database?

      Since making use of the marketing database required a 6-block walk to another building, the usage was zero. The analyst concluded that no terminals for the reps was needed.

      2)Engineers at a computer manufacturing company were asked to improve a new version of the company’s CPU by adding an efficient method for subroutine calls. After two months, the engineers responded that they had studied a sample of existing programs, and hardly any of them used subroutines in situations where efficiency really mattered. The request was declined as “frivolous.”

      Weinberg provides two more examples along the same lines, one at a brokerage firm and one at a university, and best of all:

      …the story of a suburban commuter railroad. Several suburbanites had written the railroad asking for a minor change in the train schedule. They wanted to be able to go into town in mid-afternoon to spend the evening with spouses or friends. There was a train that already passed the station at 2:30 but did not stop–all they wanted was to have a scheduled stop added for their station. Here is the response they got:

      Dear Committee: Than you for your interest in Central Railroad operations. We take seriously our committment to providing responsive service…

      In response to your petition, our customer service representative visited the Suburbantown station on three separate days, each time at 2:30 in the afternoon. Although he observed with great care, on none of the three occasions were there any passengers waiting for a southbound train.

      We can only conclude that there is no real demand for a southbound stop at 2:30, and must therefore regretfully decline your petition.

    10. Jonathan Says:

      We can only conclude that there is no real demand for a southbound stop at 2:30, and must therefore regretfully decline your petition.

      This is a variant of the “I only get mail supporting the proposal” explanation that one hears from legislators. Not many people are going to waste their time sending Barney Frank a letter opposing his financial-regulation bill, for example.

    11. Shannon Love Says:

      S O,

      The car was never optimised for most U.S. cities, and even in Europe the space problem isn’t severe enough to make the niche big.

      If this is so obvious, then why to do people keep trying to build the thing. As I noted in the parent, two-seater commuters are just a failure in America and Europe but also Asia. If a tiny two-seater can’t sell in freaking Japan where some of the roads are so narrow that Americans routinely mistake them for patched walkways, you can’t sell them anywhere.

      Yet, people keep thinking the design will work if they just come up with the right configuration. It’s easy to see how that belief could lead to wasting a lot of public money if the government got involved with developing and subsidizing the sales of the vehicles.

      About state-sponsored vs. purely market-motivated R&D;
      neither is perfect, and anecdotes are utterly useless.
      Empirical analysis is the tool of choice.

      Agreed and empirically, the vast majority of products used in the world today were developed primarily with private money. When governments have tried to directly manage the entire design process for any non-military products, they have failed utterly. There are no purely government created civil technologies in use anywhere.

      Market forces are often not strong enough to enable much basic research since basic research has become very, very expensive in most fields.

      Well, empirically that assertion is untested. In the 1930s as science became seen as militarily vital, governments begin to fund basic science so that the governments military could be the first to develop weapons based on newly discovered science. We don’t know what scientific research would look like today had we not militarized everything in the 20th century. Without WWI, WWII and the Cold War, everything might look a lot differently.

      State funding always drives market based funding out of area of endeavor. Markets can’t compete with free. If there was no government science funding, market driven basic science might well be profitable. Empirically, we don’t know.

      Market forces are often not strong enough to enable much basic research since basic research has become very, very expensive in most fields.

      Or, research has become very expensive in most fields because government subsidies create incentives for researchers to pursue projects in big expensive ways. Money talks, even in science. A scientist with a $10 million dollar grant pulls more weight than one with a $10 grand one. This creates incentives for researchers choose expensive experiments and/or they gravitate to problems that appear require a lot of money.

      Again, we’ve got a chicken and the egg problem. Is basic research so expensive it requires government subsidies or do government subsidies make research expensive?

      It’s sometimes possible to have a market-based R&D only, but that often comes at a price of allowing corporations to exploit consumers for maximised turnover, in order to give the corporations enough funds for R&D.

      “Exploit” is a meaningless term when applied to voluntary exchanges. Governments can exploit people through their force monopolies. Corporations can’t exploit their customers because their customers always have the choice.

      The idea of corporate “exploitation” of customers and employees is just a folk-marist belief that logically ultimately relies on the Marxist axiom that investors and managers contribute nothing to the value of the goods and services that corporations sells. Like all Marxist derived ideas, it is elitist and assumes that the person who sees the exploitation is oh so much smarter than the “exploited” and knows how to run the lives of the “exploited” better than the “exploited” individuals do.

      Corporations offer things for sale but you don’t have to buy them. At worst, you’re no better off than if the corporation never created and offered the product in the first place. Unlike governments, corporations don’t leave people worse off than they were before.

      The pharmaceutical sector is such an example.

      The pharmaceutical industry is being systematically vilified because Leftist want to nationalize them in order to have life and death control over everyone. There is nothing wrong with the pharmaceutical industry. They work jus like any other heavily regulated industry.

      Pharmaceutics corporations rip off customers and health insurances…

      Let me guess: You have a magical financial formula that tells you what the “fair” price for ever medicine is. Such a price will cover the entire lifecycle cost for a medicine i.e. research, testing, production, marketing, monitoring, liability and capital cost. I really wish you guys would share this secret formula ahead of time so the rest of us can use it. Somehow, you only pop up long after the fact and declare a specific product at a specific price a “rip off.”

      …and then invest some funds in R&D.

      Funding for medicine and medical devices research breaks down as: Big Pharm 40%, Speciality small Pharm 30% and government and charity 30%. Tellingly, the US spends 3 times more per capita on medical research than does the EU (according to the EU.)

      It’s problematic that many of these funds go to R&D of marginal societal value, but major market significance…

      Translation: “People are stupid and buy things that I, the great unerring genius S O, know they shouldn’t. I really should have the power to prevent people from choosing unwisely by controlling what exist for them to choose.”

      “Societal value” is an interesting choice of term. Why should we care about “social value” instead of “individual value”? E.g. a cosmetic illness like rosacea or eczema have little “social” impact but can seriously reduce the quality of life for individuals. Who decides whether spending any particular amount to treat those illness has a high enough “social value.”

      <i"The make up industry is even worse…

      You know the worst? Industries dominated by Lefitst e.g. Hollywood, publishing, arts, education etc. They rather routinely produced vast amounts of garbage and their business practices are legendarily corrupt. Gosh, maybe the government should step in a decide what movies, books, artworks and education people can receive. If the government is smart enough to determine what medicines individuals should be allowed to take, it should be smart enough to determine what Leftwing dominated industry products they consume.

      To be honest, much market-driven R&D looks decidedly worse than even ill-advised big ticket public R&D.

      Said the person typing on the privately developed computer in a privately developed building surrounded by vast arrays of technology and products which the government never knew existed until they discovered they could tax it.

      Only a small fraction of modern technology arose from government research and most of that is from the military i.e. the internet and microchips. It wasn’t until the 1950s that civilian research spending contributed much of anything at all and even today the link is tenuous. There is a big differences between developing a predictive model of a natural phenomenon and turning that understanding into a useful product.

      It’s also true that a basic understanding of the underlying science isn’t necessary to create a successful and useful technology. Science didn’t explain how lightbulbs, Edison valves and radios worked until the 1920s and 30s. Indeed, scientist from 1880-1925 spent most of their time telling investors their gadgets wouldn’t work. We have no idea why many medicines work and an understanding of underlying mechanism is not necessary to see their utility. Most materials are developed by trial and error by manufactures.

      In the end, it’s important to decide on a case-to-case basis. Simple maxims rarely apply in the modern world.

      Well, the idea that revealed preferences are always superior to stated preferences is pretty axiomatic if you assume the technology people actually buy repeated works better for them, all things considered, then technology they don’t buy.

      Of course, since you are pretty obviously an elitist who thinks you know better than everyone else, you probably don’t believe that. However, your belief in your own functional omniscience is what is really untested.

    12. setbit Says:

      Said the person typing on the privately developed computer in a privately developed building surrounded by vast arrays of technology and products which the government never knew existed until they discovered they could tax it.

      I love this blog.

    13. veryretired Says:

      There is an aspect of this situation that you touch upon obliquely at one point, but I think should be mentioned specifically—the immense warping effect of the relentless pressure from totalitarian collectivism that has driven much of our history over the last century and more.

      Now, it is certainly the case that various forms of repression and authoritarianism have always been an important and ubiquitous influence on human development.

      I would contend that the lack of progress over the course of much of human history is directly attributable to the smothering effects of the repressive elements in various human cultures, and that the sudden, seemingly miraculous developments of the recent past are the direct result of allowing people to think and act somewhat more freely in the west compared to other cultures.

      But, even as the innovations in energy use and mechanical technology were remaking the western world during the 19th century, the intellectuals of the collective were busy formulating the bizarre doctrines that would come into bloom in the 20th, and lead to the various manifestations of totalitarianism that have threatened us, and, indeed, driven much of our culture to follow paths that are inconceivable absent such pressure.

      Perhaps, in some future lab, a historian using an immensely powerful computer program will be able to seperate out some of the varied strands that combined to lead us to where we are in the modern world, but, even if we lack such detailed knowledge, we can certainly see the broad outlines.

      Without the extraordinary pressures upon our society brought by the world wars and cold war, certainly the US, and the west in general, would have directed enormas additional energies towards solving the normal, everyday human problems that bedevil all of us, and spent infinitely less on battle groups or icbm’s or a space program that seems to have died once the competition with the soviets was removed as an incentive.

      I have felt for a long time that our entire civilization is like one of those bonsai trees that are constantly pruned and molded by the gardener into shapes that the tree on its own would never have developed.

      (This is not a conspiracy theory, by the way, as I am talking about historical forces, not some wierd branch of the illuminati.)

      The costs that the many tumors of the collectivist cancer have imposed on humanity is beyond comprehension.

      Surely, our present day would be a better and brighter place if such abysmal theories of repression had died with the stunted litle men who developed them, and not been available to inspire the malignant toads who put them into practice all around the world.

    14. Bill Brandt Says:

      A vehicle has to have some joy to drive – and be at least a bit practical.

    15. renminbi Says:

      David Foster:

      Just curious,as a railfan, which railroad came up with that classic?

      I love this blog because people here come up with things I would never think up on my own.

    16. Robert Schwartz Says:

      I could never figure out how I could get into an out of an Aptera with out the assistance of a crane.

    17. David Foster Says:

      Ren…I don’t think the railroad in question was identified in Weinberg’s book.

    18. S O Says:


      you weren’t commenting to an American leftist, but to a German economist.
      Much of what you write looks like ideology-tainted typical U.S. politics views.

      ““Exploit” is a meaningless term when applied to voluntary exchanges. Governments can exploit people through their force monopolies. Corporations can’t exploit their customers because their customers always have the choice. ”

      Corporations exploit a lot, and exploitation does happen a lot in “voluntary” contracts as well. The market defect of power asymmetry is behind this. Have some fun with a musical description of the problem
      (because experience showed to me that using normal arguments on U.S. partisan politics is a waste of time ;) )

    19. John Says:

      exploitation does happen a lot in “voluntary” contracts as well.

      Very interesting. Maybe I lack the education to understand the answer, but perhaps you can elaborate on that?

      From my point of view this sounds like a definitions issue. How are you defining exploit? To my ear and understanding “voluntary exploitation” sounds like a contradiction in terms… Can you explain how that works?

      Or is the distinction in the quotes around “voluntary”??

    20. Shannon Love Says:

      S O,

      you weren’t commenting to an American leftist, but to a German economist.

      Oh, so you’re an actual Marxist instead of a just a folk-Marxist. Good to know.

      Much of what you write looks like ideology-tainted typical U.S. politics views.

      I know, sad isn’t it? I don’t know whats wrong with America. The politics of everywhere else, especially Europe and Germany, aren’t tainted by ideology at all? So, great and wise German Economist, why do think that the US alone has such ideological taint?

      Corporations exploit a lot, and exploitation does happen a lot in “voluntary” contracts as well.

      No, self-important pseudo-intellectuals arbitarily define certain interaction as “exploitive” based on their many decades of experience working in the business world. No wait, scratch that last part. I meant to say, based on their incredible and profound ignorance about even the most minor realities of real world design, production, marketing and distribution of any good or service. They make an amateurish assessment of an issue and assert that they understand all the hundreds of past, present and future inputs that go into every transactions as well, and this the kicker, exactly how the positive and negative effects of altering the transaction with violence will ripple out to everyone else.

      So, yeah, if your arrogant enough and are willing to perform enough mental gymnastics, then corporations “exploit”.

      The market defect of power asymmetry is behind this

      Well, yes, if you use an arbitrary definition of “power” handcrafted to support your argument. If you use a reasonable definition then no.

      There is no “power” asymmetry in the free-market. Neither corporations, nor anyone else, have “power” over anyone else. Power means the ability to reduce an individual’s preexisting choices. Everyone in a free-market is always free to enter into an economic transactions or contract and free to refuse further interaction. What people like you see as “power” is simply the ability to provide a choice so superior to others that individuals feel they must accept e.g. a life saving drug. However, the individual is never worse off before the transaction was offered e.g. before the drug was created and offered for sale. No matter how appealing the transaction, the individual can always refuse e.g. Amish refusing modern medications.

      In a true exercise of power, an individual’s preexisting choices are reduced e.g. the government outlaws a drug. Before the government acts, people can choose the drug but afterwards they cannot. Governments has to use the threat of violence to enforce its dictates precisely because laws always reduce individuals freedom of choice and action.

      As long as businesses cannot finagle the state into forcing people into transactions with them, businesses big or small, never have any power. They certainly don’t have “power” that justifies threatening them with violence so that they will cut others a better deal which is what people like you are really seeking.

      because experience showed to me that using normal arguments on U.S. partisan politics is a waste of time ;)

      Translation: “Oh, I can beat you at the game easy I just don’t want to play because, huh, you’ll cheat. Yeah, that’s it.” How convenient.You of course can make articulate responses to my arguments but you know that I’m just to close minded to listen to them. Gosh, how unfortunate. To bad I’m not more open minded because then you could not doubt wow us all with your insightful.

      Our loss I guess.

      On the other hand, in my experience, Europeans with your views and snotty demeaner are simply to culturally arrogant and intellectually nsular to even be aware of other people’s ideas much less understand them to the level you could argue them.

      So, thanks for stopping by to reinforce the worst stereotypes about Europeans.

      Btw, if you want to see where Tennessee Ernie Ford’s whinging crypto-socialism eventually evolved into, I recommend The Wild and Wonderful Whites of West Virginia.

    21. Sgt. Mom Says:

      I’ll have you know that on one memorable rainy evening in the late 1970s at Misawa AB Japan, I crammed seven people into my Honda mini – it was the station-wagon version. Still, it was a wonder the tires didn’t pop. I’ve been shaking my head, every time I see a Smart Car- where the heck do you put the groceries that you’re hauling home? Two passengers and a decent-sized trunk, or four persons. Either, or. Back to the drawing board, Smart Car.

    22. Percy Dovetonsils Says:

      Much of what you write looks like ideology-tainted typical U.S. politics views.

      Well, the stereotype is that Germans are dour, coldly calculating, humorless technocrats, so maybe ol’ S.O. is onto something here.

      (Seriously, the “My highly partisan perspective is so manifestly above the partisan fray, it crushs your puny American logic” bit? Does that work a lot?)

    23. john Says:

      e.g. Amish refusing modern medications

      I don’t think that’s right. I’m no expert but I’ve worked for the Christian Science church and have Amish neighbors whom I speak with fairly frequently and who have done a lot of work for me over the last few years.

      The former, Christian Scientists, refuse modern medication. One of my Amish neighbors has just returned from an extended stay in a modern hospital. As it was explained to me by his son, what they refuse is modern medical insurance — they pay cash.


      Also, I didn’t follow the link since I don’t do video (main reason being dial up connection) but if it was 16 tons, there is something in it as a labor exploitation claim. My grandmother and her family lived it. BUT, the gotcha there is that it was essentially a case of fraud. I don’t know of anyone in any part of the political or economic spectrum who is arguing for toleration of fraud. It was also possible to get out of it. Next time I’m up to see her I’ll ask her about it. Furthermore, that’s a different claim than the customer exploitation one.

    24. dearieme Says:

      If I wanted a two-seater I’d buy a motorbike.

    25. gospace Says:

      I was talking to the Maytag rep about just that- stated preferences. Maytag was the last company to move its’ OTR microwave production overseas. Because consumer preference surveys showed overwhelmingly that consumers were willing to spend a few dollars more for an OTR built in the US by US workers.

      Turns out they weren’t.

    26. Shannon Love Says:


      There are a lot of Amish denominations and they’ve changed over the years. A lot of Amish attitudes changed when they got hit by genetic disorders caused by having a to restricted a gene pool as the number of Amish shrank. Back in the late 70s, they had one of the last polio outbreaks in the developed world because they refused to vaccinate. All that finally broke the damn for all but the most strict denominations. The last time I looked several years ago, all but a couple of hundred Amish nationwide had been vaccinated.

      Of course, one doesn’t have to pick on the Amish or other traditional religions. Most measles and whopping cough outbreaks of late have occurred in communities of college educated, upper class, secular, leftist white people. You know, morons.

    27. Shannon Love Says:


      Because consumer preference surveys showed overwhelmingly that consumers were willing to spend a few dollars more for an OTR built in the US by US workers.Turns out they weren’t.

      Yeah, hit the same thing with pricing technical support with Apple back in the 90s. People would list technical support has a high priority (this was back when computers where just becoming true consumer products) and they would all claim that they would pay $20-50$ dollars a unit for good tech support that came bundled with the product.

      They didn’t. Turned out the maximum price sensitivity was at most $25 bucks for all the bells and whistle including tech support. More often it was $10 bucks.So, if you had best in world tech support but it added $10 to the cost of every machine, people would buy the cheaper machine with the crappy tech support.

      That’s why almost everyone went with 30-90 days free tech support and then pay thereafter. People weren’t just will to pay up front for tech support even through they claimed loudly that they did.

    28. Marty Says:

      Very good post and the political observations at th end strike me a very true.

      Or, put another way, Margaret Thatcher famously said that teh problem with socialism is that you run out of other people’s money. Leftists get elected by people who “state” that preference, but when it comes to actually spending money (revealed preferences), it’s always using the power of the state to get at someone else’s money. The Left’s revealed preference is to use the State to take monye from peole and spend it how the Leftst wants… not to spend his own money that way.

      I’ve never trusted stated preference surveys unless there was a body of empirical evidence that they could be used in a paricular circumstance.

    29. gospace Says:

      I had two seater once- a Fiat X19. Loved it. Was single when I purchased it. Two seaters have their place- they are a chick maagnet for the younger crowd.

      But not real practical for much else. Got 5 people in it once- for a short jaunt- today doing that I’d get pulled over and pepper sprayed, in all liklihood.

    30. Shannon Love Says:


      Two seaters have their place in sports cars and pickup trucks. That is because the lack of space is compensated by improved performance or hauling. Even so, pickups in the last twenty-years have nearly completely evolved into versions that can squeeze in four people.

      It’s the two-seater commuter design that has failed repeatedly.

    31. John Says:


      I, too, had an X1/9 as a single guy. I don’t remember the chick magnet thing working out as well as one might have hoped, but it was a great car. I nominate the X1/9 for the most under-rated car ever. I know the reputation they had for poor reliability, but really and truly mine was the most reliable car I’ve ever owned. Yes, the electrics were haunted or possessed or something and the carb wandered out of adjustment on a weekly basis, but it *never* failed to start and take me where I wanted to go. I can’t really say that for any other car I’ve ever owned.

      I only once ever wished I had a third seat, but what *did* bug me routinely was how hard it was to haul a guitar in that thing. That’s what mostly rode in the passenger seat since it wouldn’t fit in either trunk.

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