On the contrary, I think it's frustratingly hard for the rich to find products with reliable quality. There are some brands where you pay more, and you get high reliability, like Miele for vacuum cleaners. But what car brand do you think rich owners don't have a litany of complaints about? What brand of blenders don't have junky plastic parts that break too easily? Do you think there's a streaming service or an email provider that doesn't annoy rich customers with obnoxious login redirects and broken features? Do you think rich people's clothes don't pop seams annoyingly fast? Instead, I think what's interesting is the absence of opportunities to exchange money for quality. I suspect that's because, fundamentally, quality proves itself over time, and it's relatively quite expensive for a company to provide (at a loss) extra quality that isn't perceived by the purchaser (and thus they won't pay enough for it), solely as an investment in future reputation, trusting that the perception of quality will catch up eventually. It's simply an easier thing to successfully communicate "look, the new car we're selling has cool-looking gull wing doors!" than to successfully communicate "the car we've been selling for 20+ years has been proving itself reliable" because there's such an ad-hoc, rotating cast of reviewers and commentators.
> But what car brand do you think rich owners don't have a litany of complaints about?
Toyota. Honda. Frequently rich people buy status symbols instead of reliability.
I suspect that some of the luxury brands _wish_ they could top Consumer Reports' reliability ranking, but perhaps it is just harder to achieve with smaller production runs. (And perhaps also Toyota is just particularly good at it - Lexus is less reliable than Toyota, suggesting production run size matters, but Lexus is also more reliable than every other luxury brand.)
> What brand of blenders don't have junky plastic parts that break too easily?
Vitamix
> Do you think there's a streaming service or an email provider that doesn't annoy rich customers with obnoxious login redirects and broken features?
Yes, everyone uses the same Netflix and more-or-less the same Gmail. I would note there are a number of email providers, but they tend to compete on things like privacy rather than on reliability. I don't think that Gmail is known for being unreliable.
Software is an interesting case in general because there is no real property of reliability in the manufacturing sense: if Bezos uses the exact same version of a software application as you, his experience is more-or-less the same.
> Do you think rich people's clothes don't pop seams annoyingly fast?
I mean, the highest end clothing option is to use the services of a tailor, and, while I have no experience with this, it's safe to assume that individually-tailored clothes are of high quality at the "durability of seams" level.
But I do think clothing is where your point has the most bite, as the "status symbol vs actually materially superior" point is even worse than with cars, and there is no Consumer Reports for clothes.
However, some quick research suggests that, e.g., Brunello Cucinelli and Loro Piana will genuinely have good material quality and workmanship, although honestly I think a local tailor would be cheaper in most cases.
----
I think it is accurate to say that firms don't seem to care as much about long-term reputation as they used to; but inaccurate to say that quality is not available at any price (and extremely inaccurate in the case of cars, where certain everyday makes are the most reliable).
> I don't think that Gmail is known for being unreliable.
Gmail is well known for its incredibly aggressive "spam" filtering, which is happy to prevent you from seeing e.g. replies to email you've already sent, coming from the account you sent your mail to.
I mean, I chose my car brand because it was consistently rated tops in reliability (Subaru) and I have a list of a dozen stupid design and engineering mistakes it has. But if they fixed all those, they would sell zero more cars, which is why they don't fix all those
I am wondering if you’re really serious or if you’re manufacturing an argument about various products.
I own a 2022 Ford Bronco. I ordered it to my own specifications. It’s not an expensive car: ~$48,000.
The Bronco has had numerous recalls—I have ignored them all. I drive more than the average person—105,000 miles. I pay for regular oil changes. I put a new set of tires on at 65,000 miles. I needed an alignment— < $180.
PS—I even experienced human error: my mechanic forgot to replace the dipstick after an oil change. This was almost a disaster but I am an attentive driver and immediately stopped when my oil pressure dropped. All is well. That cost me about $300 dollars (most of that was taxis and a car rental—Ford charged me for an oil change: ~ $90).
There is also a kind of lifecycle to "brand equity." At first it's difficult to build up, it costs investment to build a good brand. Usually you need the ownership to have a strong personal and financial interests in long term quality and reputation.
Then there comes a point in the lifecycle, usually when the business is mature and huge, that management finds it can juice profits by depreciating brand equity. It takes awhile for consumers to recognize that they aren't getting the same value they used to. This is where most peoples complaints about "enshittificaiton" come from.
You see this in private equity of consumer brands a lot. Buy it with debt, juice margins by any means necessary, make excess money until the consumer catches on.
This seems correct to me. There's classes of things where you can pay more to get better outcomes, which are generally things that maybe aren't factory made. Like, for example, food. I can keep getting more adjectives added to my beef until it's $400 a lb or higher. ("Grass fed, grass finished, massaged by endangered elves on the edge of an Hawaiian volcano from April to September..")
I won't say there is *no* amount of money I can pay to get, for example, the exact home server that I want for my lab. But the amount I would have to pay is to buy the factory to produce it. So I guess technically Bryan is correct - you just aren't imagining HOW MUCH more you have to pay to get a high quality item. You have to buy the entire supply chain to insist on high quality capacitors.
But I don't think that's the soul of the argument. Maybe it is, though.
"To create a high quality apple pie, first you have to create a high quality universe."
I have a Vitamix blender that I have used almost every day for more than a decade without a problem. I have never replaced the blade. I am occasionally disappointed with products but few bad experiences readily come to mind. If you have your health and a modest amount of income, life is cushy in the West. “Oh capitalism, what have you done for me LATELY!”
I think there are concerns your model isn't including.
1: Not everyone optimizes for reliability as opposed to fashion/novelty. Rich people can afford to have their car fixed if something breaks, and drive their other cars in the mean time; reliability is typically a feature lower income people value most highly. On the other hand, a flashy car with over the top performance at the cost of maintenance are typical rich person purchases, as it flaunts their wealth while being unusual and drawing the attention they crave.
2: Clothing seams: this is again a question of what they are optimizing for. Women's clothing tends to be very low on the durability scale because women are more fashion conscious and cycle through clothing more quickly. The richer they are the faster they do so. A blouse that lasts 10 years is not desirable, because who wants to be wearing the same fashion for more than one year?
However, if one does care about longevity of clothing that absolutely can be accomplished with money. Bespoke tailored garments with double stitching is available, and even people who are not "rich" in the sense we normally think of but care about clothing will drop money on such items.
The theme of "people don't care about reliability and other features as much as we think" runs through most of this. I don't know a lot about the blender market, so it might be cheaper to just buy a new blender, but if one really wanted to have a blender without plastic parts one could hire a machine shop to make metal parts for the easily broken bits. It would cost a bit, but the rich could do it. Why would anyone bother though when a new blender is 100$ and can be delivered next day?
With email providers, I suspect a lot of people follow the same rule of "eh, good enough." Since good enough is zero price, most people don't, but some do build their own servers.
With streaming, I am not sure what services and features you are referring to, but a slightly more expensive but much higher quality option is to run your own network streaming server. We do that ourselves, and a few terabyte drives and buying tangible media later we can stream movies and shows from home, even when the internet cuts out for some reason. You don't get easy access to streaming only programming but we are not interested in most streaming junk so it works out.
What I'm positing is that rich people spend a frustratingly large amount of time dealing with nonsense caused by their crappy stuff and crappy services failing. They might curse at their cars for doing something stupid less than everyone else, but not *that* much less.
I just dropped $70 each on a few belts after doing a bunch of research about belts that will still look great after being worn a bunch, so I don't have to spend my time buying belts. (I know there are much more expensive belts, but bear with me.) Maybe these belts really are good! But... are they? I really don't know. There's not *that* much incentive to make good $70 belts, instead of crappy $70 belts. And the same holds for $250 belts.
Coming back to this after a month, and am kind of sleepy, so please bear with me :)
Your belt example I think highlights the point pretty well. Rich people don’t care how a $70 belt looks after a year or two, because they will just buy a new one in a month, or a week. Reliable isn’t what they care about, they just want what is fashionable and might just wear the thing once or twice.
Poor people just buy the cheapest one and replace it.
Middle income people might want an investment belt, but only if they know about the possibilities and care. How durable can a belt possibly be? Is it worth spending the same for one really good belt as 5 pretty cheap ones? It takes a lot of research to find out, and even if you drop $160 on a belt to last the rest of your life, you might leave the thing in a hotel or something.
People like disposable stuff, for a lot of different reasons. I personally really like durability and reliability, so I get what you mean. I make my own knives and tools, and sometimes my own belts, because getting good quality is expensive. At the same time I dislike fancy clothes because I am paranoid about getting them dirty or torn. Some people are the opposite though, and see something cheap and disposable as perfect because it can be replaced on a whim. They apply to cars roughly the same metric I apply to t-shirts: use it till it comes apart then get a new one.
I am not rich, and I have no problem finding products with reliable quality. I am not saying that 100% of the products that I buy are of reliable quality, but at least 95% are.
You must be shopping in the wrong places, or making unwise choices.
I know plenty of relatively rich people who do that, but that is their failing, not the marketplace.
My printer, blinds, and bathroom mirror all work great, so I have no need to buy another.
I think that you need to make better buying decisions. If you really cannot find quality products in this day and age, then that is clearly a "You problem." It has never been easier to make a wise purchasing decision.
If you do not have that problem, then I am not sure why you feel the need to speak up for "rich people."
Or more likely, you just need to reduce the social media hyperbole.
I seriously doubt that Bentley owners have major problems with their cars. However, when problems do occur, Bentley will stand behind their product and provide another vehicle for use until repairs are made.
There are many brands of home appliances available with minimal amounts of plastic (Oster and Luvele come to mind).
I don’t think your argument that products break or eventually become obsolete defeats Caplan’s point: if you’re rich and can’t find (or have made) something of the highest quality then it’s a problem of scarcity, not market failure.
PS—Some years ago there was a hurricane that hit residents with homes built to code along the Gulf. All those houses were damaged but one. When reporters interviewed the owners they found out why their home was still standing: they asked their engineers to design a house that could withstand a category 5 hurricane—they paid more than $100,000 more on just the foundation.
This is an oversimplified model, and the basic flaw is assuming that there is a smooth continuous curve of demand for quality, and further that there is a smooth continuous curve for the cost of producing quality.
But the truth is there are is kind a jagged middle, that’s even maybe discontinuous. Quality is not just an analog volume knob you can just turn smoothly up and down. And neither is demand. So this jaggedness of cost of quality and demand means that there are discrete places where these curves overlap, but that also means there are zones where they don’t.
So for example the difference between producing a grade 3 product might not just be some smooth linear increase that follows the same curve that you might expect if you plotted the cost to produce a grade 1 and grade 2. Like a quality grade 1 widget might cost $1, the quality grade 2 widget $2, but a quality grade 3 widget might not cost $3 or even $5, but might cost $50 dollars. And so the demand for the grade 3 product might collapse because the grade 3 product does not provide $48 dollars worth of extra utility over buying the grade 2 widget. In terms of utility, maybe the grade three widget is only worth maybe 2 or 3 grade 2 widgets.
So… since there is no market for $50 grade 3 widgets, those production lines shut down.
And so you might say, well, why wouldn’t the rich buy the $50 grade 3 widget? Well, because there are even higher grades of quality, and sure, maybe they are more expensive but they also deliver better value on the dollar than the grade 3 widgets.
So let’s say there’s also grade 4 widgets that cost $200 to produce, and grade 5 widgets that cost $5000 dollars to produce. The luxury market for widgets might dominated by the $5000 grade 5 widgets, the best widgets money can buy. And this has more to do with the utility of the different quality widgets; the luxury buyers likely have applications where widget failure is so critical and expensive that the decreased cost utility is still worth the increased system up time. So there may not be enough demand to sustain the $200 cost grade 4 widget market.
There becomes a missing middle. People buying the $2 widget might really really want a quality 2.5 widget they would pay $6-$10 for— but the reality of real world nuts and bolts manufacturing doesn’t always provide the means of producing such a notch. And for that matter there may be some substantial portion of the luxury widget market that really really wishes there was a quality 4.5 widget that cost $1000.
The existence of luxury markets does not prove that manufacturing capability can always produce goods at optimal quality/cost ratios for different segments of sufficiently large markets. The truth is that many production market inefficiencies are the result of physics or other non-market forces.
Ah, but the real world intervenes, market externalities continue to pop up.
For instance, some goods are consumptive. Refined fuel is an example of this; from very high grade fuel like jet fuel, to lower grades of fuel E15 gasoline, with intermediaries like diesel and other grades of gasoline.
Fuel also brings in other complications, like that demand can be time variant, and subject to non-linear shocks (e.g. 9/11 sharply reduced demand for flights; fuel demand also has cycles driven by stuff like holiday travel, or seasonality, such as people driving less when roads are icy). Supply also can have time variance and non-linear shocks (e.g. war with Iran).
Demand shocks in certain quality grades can affect the supply of used goods. For example even used graphics cards are in sparse supply because demand for premium graphics chips is so high that production of lower grade chips is constrained and has been for a sustained period, such that even used graphics cards are in very sparse supply. Similar dynamics are playing out with memory too. And so this leads to a market where many hobbyists are just not building new gaming PCs because the is not worth the utility.
There can also be variability, uncertainty, and increased risk with the secondary market. For example used cars have a lot of factors that can impact their quality, not all of which can be controlled for even by experts. Two vehicles of the same model, from the same model year, with similar mileage can have vastly different quality. For an example a truck that was used to tow a heavy trailer near its towing capacity for most of it’s mileage will be much less reliable than a truck that has never been used for towing with the same mileage. Some buyers simply can’t carry the risk. Used engine parts have even more variability and even more uncertainty than used vehicles, as generally speaking information on the vehicle the part was picked from can be be impossible to know. In a lot of durable goods, good secondary markets just don’t exist because of this uncertainty ; good luck finding used parts for 10 year old appliances like washers or furnaces.
In short, secondary markets can and do often fail, and may even fail to form. They’re not a magic panacea that solves all market inefficiencies in real goods.
My father worked for a lawnmower company in the 1980s. They had two product families, the consumer models and the “pro” models, marketed toward professional landscapers. What consumers didn’t realize is that the regular line and the pro line were the same products coming off the same assembly line. The only difference was the price (and the marketing)
Broadly, I agree that consumer protections are protecting consumers from themselves.
But in cases where consumers are indirectly exposed to the harmful product (e.g., lead paint in a hotel room, unsafe vehicle in an uber, cancer-causing cleaner used in a hotel room), the risks aren't necessarily visible and can be hard to avoid at any price point.
I think regulation of a minimum safety standard while leaving luxury to the market is an acceptable concept. The problem of regulation run amok reflects a poor application of the principle.
IMO Bryan’s argument would have been stronger still had he noted that prior to the Internet and social media age, one could defend the “asymmetric information” problem’s validity more strongly than you can today..
I.e. justifying more regulation in the past, but noting that the basis is largely gone.
What's different about Oakland than any other American city of similar size? Isn't Oakland situated in one of the most desirable regions of the state, country, world?
Perplexity AI: For the prior top-10 list—Oakland, Memphis, St. Louis, Tacoma, Baton Rouge, Portland, Berkeley, Little Rock, Salt Lake City, and Minneapolis—the strongest interpretation is not “race causes property crime” or “low education causes property crime.” Property-crime rates more plausibly reflect a mix of concentrated disadvantage, inequality and segregation, density and visitor activity, the supply of stealable goods, drug and auto-theft markets, enforcement/reporting practices, and local geography.
"Do you really think that the rich cannot get all the luxury and convenience they’re willing to pay for? No? Then what’s the point of the strict safety regulation?"
There is much less information asymmetry with regards to luxury and convenience than safety. In fact, you could argue that if I don't notice an inconvenience, that means it wasn't an inconvenience after all.
If I'm taking a bus, I always know whether the bus stop is in a convenient location for me. But I can't tell whether the bus has been built and maintained correctly.
On air pollution, if they're smart, they pack their house with HEPA grade air purifiers, I know that's what I do. Huge difference in quality of air (you can measure this), and Dynomight has shown us that this is one of the bigger health interventions you can do after exercise and eating well. Other studies have shown that having purified air in generally polluted cities helps cognitive / work performance, too, it's win / win and everyone should do it.
Most consumer protection regulation create a baseline of safety, and protect consumers from an obvious information asymmetry. I think you know this, but choose to write these silly straw man polemics. Seems like you no longer value your readers time.
Sometimes you pay for it but don't actually get it, such as in the case of quack medicine that promises to treat things that known-effective medicine can't.
True but I’m not sure what that means in terms of Caplan’s position.
Rich people (all people in fact) are susceptible to fraudsters. The one that comes immediately to mind is Madoff. Rich people trying to become richer were seduced by Madoff’s apparent talent for generating positive returns for his clients during bad markets. Here the rich got exactly what they paid for (someone who had no trouble telling them what they wanted to hear). Those very wealthy rich folks paid for a lie (and got it!).
PS—When something sounds too good to be true, it’s usually not.
On the contrary, I think it's frustratingly hard for the rich to find products with reliable quality. There are some brands where you pay more, and you get high reliability, like Miele for vacuum cleaners. But what car brand do you think rich owners don't have a litany of complaints about? What brand of blenders don't have junky plastic parts that break too easily? Do you think there's a streaming service or an email provider that doesn't annoy rich customers with obnoxious login redirects and broken features? Do you think rich people's clothes don't pop seams annoyingly fast? Instead, I think what's interesting is the absence of opportunities to exchange money for quality. I suspect that's because, fundamentally, quality proves itself over time, and it's relatively quite expensive for a company to provide (at a loss) extra quality that isn't perceived by the purchaser (and thus they won't pay enough for it), solely as an investment in future reputation, trusting that the perception of quality will catch up eventually. It's simply an easier thing to successfully communicate "look, the new car we're selling has cool-looking gull wing doors!" than to successfully communicate "the car we've been selling for 20+ years has been proving itself reliable" because there's such an ad-hoc, rotating cast of reviewers and commentators.
> But what car brand do you think rich owners don't have a litany of complaints about?
Toyota. Honda. Frequently rich people buy status symbols instead of reliability.
I suspect that some of the luxury brands _wish_ they could top Consumer Reports' reliability ranking, but perhaps it is just harder to achieve with smaller production runs. (And perhaps also Toyota is just particularly good at it - Lexus is less reliable than Toyota, suggesting production run size matters, but Lexus is also more reliable than every other luxury brand.)
> What brand of blenders don't have junky plastic parts that break too easily?
Vitamix
> Do you think there's a streaming service or an email provider that doesn't annoy rich customers with obnoxious login redirects and broken features?
Yes, everyone uses the same Netflix and more-or-less the same Gmail. I would note there are a number of email providers, but they tend to compete on things like privacy rather than on reliability. I don't think that Gmail is known for being unreliable.
Software is an interesting case in general because there is no real property of reliability in the manufacturing sense: if Bezos uses the exact same version of a software application as you, his experience is more-or-less the same.
> Do you think rich people's clothes don't pop seams annoyingly fast?
I mean, the highest end clothing option is to use the services of a tailor, and, while I have no experience with this, it's safe to assume that individually-tailored clothes are of high quality at the "durability of seams" level.
But I do think clothing is where your point has the most bite, as the "status symbol vs actually materially superior" point is even worse than with cars, and there is no Consumer Reports for clothes.
However, some quick research suggests that, e.g., Brunello Cucinelli and Loro Piana will genuinely have good material quality and workmanship, although honestly I think a local tailor would be cheaper in most cases.
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I think it is accurate to say that firms don't seem to care as much about long-term reputation as they used to; but inaccurate to say that quality is not available at any price (and extremely inaccurate in the case of cars, where certain everyday makes are the most reliable).
> I don't think that Gmail is known for being unreliable.
Gmail is well known for its incredibly aggressive "spam" filtering, which is happy to prevent you from seeing e.g. replies to email you've already sent, coming from the account you sent your mail to.
I mean, I chose my car brand because it was consistently rated tops in reliability (Subaru) and I have a list of a dozen stupid design and engineering mistakes it has. But if they fixed all those, they would sell zero more cars, which is why they don't fix all those
I am wondering if you’re really serious or if you’re manufacturing an argument about various products.
I own a 2022 Ford Bronco. I ordered it to my own specifications. It’s not an expensive car: ~$48,000.
The Bronco has had numerous recalls—I have ignored them all. I drive more than the average person—105,000 miles. I pay for regular oil changes. I put a new set of tires on at 65,000 miles. I needed an alignment— < $180.
PS—I even experienced human error: my mechanic forgot to replace the dipstick after an oil change. This was almost a disaster but I am an attentive driver and immediately stopped when my oil pressure dropped. All is well. That cost me about $300 dollars (most of that was taxis and a car rental—Ford charged me for an oil change: ~ $90).
There is also a kind of lifecycle to "brand equity." At first it's difficult to build up, it costs investment to build a good brand. Usually you need the ownership to have a strong personal and financial interests in long term quality and reputation.
Then there comes a point in the lifecycle, usually when the business is mature and huge, that management finds it can juice profits by depreciating brand equity. It takes awhile for consumers to recognize that they aren't getting the same value they used to. This is where most peoples complaints about "enshittificaiton" come from.
You see this in private equity of consumer brands a lot. Buy it with debt, juice margins by any means necessary, make excess money until the consumer catches on.
This seems correct to me. There's classes of things where you can pay more to get better outcomes, which are generally things that maybe aren't factory made. Like, for example, food. I can keep getting more adjectives added to my beef until it's $400 a lb or higher. ("Grass fed, grass finished, massaged by endangered elves on the edge of an Hawaiian volcano from April to September..")
I won't say there is *no* amount of money I can pay to get, for example, the exact home server that I want for my lab. But the amount I would have to pay is to buy the factory to produce it. So I guess technically Bryan is correct - you just aren't imagining HOW MUCH more you have to pay to get a high quality item. You have to buy the entire supply chain to insist on high quality capacitors.
But I don't think that's the soul of the argument. Maybe it is, though.
"To create a high quality apple pie, first you have to create a high quality universe."
I have a Vitamix blender that I have used almost every day for more than a decade without a problem. I have never replaced the blade. I am occasionally disappointed with products but few bad experiences readily come to mind. If you have your health and a modest amount of income, life is cushy in the West. “Oh capitalism, what have you done for me LATELY!”
I feel like Vitamix is emerging as the strongest counter-example!
Your argument doesn’t defeat Caplan’s point: the rich can (and in many cases do) pay for better products.
There are no perfect products to be sure, but you can get the best as long as you’re willing to pay (see below).
https://youtu.be/eLjsDQyW5Y8?is=fnGLrAFxiiRUdHoT
I think, though, that the asymptote as you spend more money tops out at like 85% reliability, it doesn't converge on 100%
I think there are concerns your model isn't including.
1: Not everyone optimizes for reliability as opposed to fashion/novelty. Rich people can afford to have their car fixed if something breaks, and drive their other cars in the mean time; reliability is typically a feature lower income people value most highly. On the other hand, a flashy car with over the top performance at the cost of maintenance are typical rich person purchases, as it flaunts their wealth while being unusual and drawing the attention they crave.
2: Clothing seams: this is again a question of what they are optimizing for. Women's clothing tends to be very low on the durability scale because women are more fashion conscious and cycle through clothing more quickly. The richer they are the faster they do so. A blouse that lasts 10 years is not desirable, because who wants to be wearing the same fashion for more than one year?
However, if one does care about longevity of clothing that absolutely can be accomplished with money. Bespoke tailored garments with double stitching is available, and even people who are not "rich" in the sense we normally think of but care about clothing will drop money on such items.
The theme of "people don't care about reliability and other features as much as we think" runs through most of this. I don't know a lot about the blender market, so it might be cheaper to just buy a new blender, but if one really wanted to have a blender without plastic parts one could hire a machine shop to make metal parts for the easily broken bits. It would cost a bit, but the rich could do it. Why would anyone bother though when a new blender is 100$ and can be delivered next day?
With email providers, I suspect a lot of people follow the same rule of "eh, good enough." Since good enough is zero price, most people don't, but some do build their own servers.
With streaming, I am not sure what services and features you are referring to, but a slightly more expensive but much higher quality option is to run your own network streaming server. We do that ourselves, and a few terabyte drives and buying tangible media later we can stream movies and shows from home, even when the internet cuts out for some reason. You don't get easy access to streaming only programming but we are not interested in most streaming junk so it works out.
What I'm positing is that rich people spend a frustratingly large amount of time dealing with nonsense caused by their crappy stuff and crappy services failing. They might curse at their cars for doing something stupid less than everyone else, but not *that* much less.
I just dropped $70 each on a few belts after doing a bunch of research about belts that will still look great after being worn a bunch, so I don't have to spend my time buying belts. (I know there are much more expensive belts, but bear with me.) Maybe these belts really are good! But... are they? I really don't know. There's not *that* much incentive to make good $70 belts, instead of crappy $70 belts. And the same holds for $250 belts.
Coming back to this after a month, and am kind of sleepy, so please bear with me :)
Your belt example I think highlights the point pretty well. Rich people don’t care how a $70 belt looks after a year or two, because they will just buy a new one in a month, or a week. Reliable isn’t what they care about, they just want what is fashionable and might just wear the thing once or twice.
Poor people just buy the cheapest one and replace it.
Middle income people might want an investment belt, but only if they know about the possibilities and care. How durable can a belt possibly be? Is it worth spending the same for one really good belt as 5 pretty cheap ones? It takes a lot of research to find out, and even if you drop $160 on a belt to last the rest of your life, you might leave the thing in a hotel or something.
People like disposable stuff, for a lot of different reasons. I personally really like durability and reliability, so I get what you mean. I make my own knives and tools, and sometimes my own belts, because getting good quality is expensive. At the same time I dislike fancy clothes because I am paranoid about getting them dirty or torn. Some people are the opposite though, and see something cheap and disposable as perfect because it can be replaced on a whim. They apply to cars roughly the same metric I apply to t-shirts: use it till it comes apart then get a new one.
I am not rich, and I have no problem finding products with reliable quality. I am not saying that 100% of the products that I buy are of reliable quality, but at least 95% are.
You must be shopping in the wrong places, or making unwise choices.
I know plenty of relatively rich people who do that, but that is their failing, not the marketplace.
What printer do you have at home? What blinds would you buy if you were to install blinds? What vanity bathroom mirror with built-in lights?
LOL
My printer, blinds, and bathroom mirror all work great, so I have no need to buy another.
I think that you need to make better buying decisions. If you really cannot find quality products in this day and age, then that is clearly a "You problem." It has never been easier to make a wise purchasing decision.
If you do not have that problem, then I am not sure why you feel the need to speak up for "rich people."
Or more likely, you just need to reduce the social media hyperbole.
>What brand of blenders don't have junky plastic parts that break too easily?
Blendtec.
I seriously doubt that Bentley owners have major problems with their cars. However, when problems do occur, Bentley will stand behind their product and provide another vehicle for use until repairs are made.
There are many brands of home appliances available with minimal amounts of plastic (Oster and Luvele come to mind).
I don’t think your argument that products break or eventually become obsolete defeats Caplan’s point: if you’re rich and can’t find (or have made) something of the highest quality then it’s a problem of scarcity, not market failure.
PS—Some years ago there was a hurricane that hit residents with homes built to code along the Gulf. All those houses were damaged but one. When reporters interviewed the owners they found out why their home was still standing: they asked their engineers to design a house that could withstand a category 5 hurricane—they paid more than $100,000 more on just the foundation.
https://youtu.be/eLjsDQyW5Y8?is=fnGLrAFxiiRUdHoT
I mean, ask Google about "bentley car problems" and see if it says "Bentley automobiles are famously free from requiring frequent unexpected upkeep"
Leftism politicizes constraints that are the cost of existence. Which is why they will never run out of complaints.
High cost of housing has a lot of this. Small cheap houses are illegal.
So are $8000 new cars.
Yes. Far better to walk than to ride in a $8000 car that doesn't meet modern safety standards. *They* know best.
This is an oversimplified model, and the basic flaw is assuming that there is a smooth continuous curve of demand for quality, and further that there is a smooth continuous curve for the cost of producing quality.
But the truth is there are is kind a jagged middle, that’s even maybe discontinuous. Quality is not just an analog volume knob you can just turn smoothly up and down. And neither is demand. So this jaggedness of cost of quality and demand means that there are discrete places where these curves overlap, but that also means there are zones where they don’t.
So for example the difference between producing a grade 3 product might not just be some smooth linear increase that follows the same curve that you might expect if you plotted the cost to produce a grade 1 and grade 2. Like a quality grade 1 widget might cost $1, the quality grade 2 widget $2, but a quality grade 3 widget might not cost $3 or even $5, but might cost $50 dollars. And so the demand for the grade 3 product might collapse because the grade 3 product does not provide $48 dollars worth of extra utility over buying the grade 2 widget. In terms of utility, maybe the grade three widget is only worth maybe 2 or 3 grade 2 widgets.
So… since there is no market for $50 grade 3 widgets, those production lines shut down.
And so you might say, well, why wouldn’t the rich buy the $50 grade 3 widget? Well, because there are even higher grades of quality, and sure, maybe they are more expensive but they also deliver better value on the dollar than the grade 3 widgets.
So let’s say there’s also grade 4 widgets that cost $200 to produce, and grade 5 widgets that cost $5000 dollars to produce. The luxury market for widgets might dominated by the $5000 grade 5 widgets, the best widgets money can buy. And this has more to do with the utility of the different quality widgets; the luxury buyers likely have applications where widget failure is so critical and expensive that the decreased cost utility is still worth the increased system up time. So there may not be enough demand to sustain the $200 cost grade 4 widget market.
There becomes a missing middle. People buying the $2 widget might really really want a quality 2.5 widget they would pay $6-$10 for— but the reality of real world nuts and bolts manufacturing doesn’t always provide the means of producing such a notch. And for that matter there may be some substantial portion of the luxury widget market that really really wishes there was a quality 4.5 widget that cost $1000.
The existence of luxury markets does not prove that manufacturing capability can always produce goods at optimal quality/cost ratios for different segments of sufficiently large markets. The truth is that many production market inefficiencies are the result of physics or other non-market forces.
The used widget market helps with this problem. Discontinuities get filled in when more stuff gets resold.
Ah, but the real world intervenes, market externalities continue to pop up.
For instance, some goods are consumptive. Refined fuel is an example of this; from very high grade fuel like jet fuel, to lower grades of fuel E15 gasoline, with intermediaries like diesel and other grades of gasoline.
Fuel also brings in other complications, like that demand can be time variant, and subject to non-linear shocks (e.g. 9/11 sharply reduced demand for flights; fuel demand also has cycles driven by stuff like holiday travel, or seasonality, such as people driving less when roads are icy). Supply also can have time variance and non-linear shocks (e.g. war with Iran).
Demand shocks in certain quality grades can affect the supply of used goods. For example even used graphics cards are in sparse supply because demand for premium graphics chips is so high that production of lower grade chips is constrained and has been for a sustained period, such that even used graphics cards are in very sparse supply. Similar dynamics are playing out with memory too. And so this leads to a market where many hobbyists are just not building new gaming PCs because the is not worth the utility.
There can also be variability, uncertainty, and increased risk with the secondary market. For example used cars have a lot of factors that can impact their quality, not all of which can be controlled for even by experts. Two vehicles of the same model, from the same model year, with similar mileage can have vastly different quality. For an example a truck that was used to tow a heavy trailer near its towing capacity for most of it’s mileage will be much less reliable than a truck that has never been used for towing with the same mileage. Some buyers simply can’t carry the risk. Used engine parts have even more variability and even more uncertainty than used vehicles, as generally speaking information on the vehicle the part was picked from can be be impossible to know. In a lot of durable goods, good secondary markets just don’t exist because of this uncertainty ; good luck finding used parts for 10 year old appliances like washers or furnaces.
In short, secondary markets can and do often fail, and may even fail to form. They’re not a magic panacea that solves all market inefficiencies in real goods.
My father worked for a lawnmower company in the 1980s. They had two product families, the consumer models and the “pro” models, marketed toward professional landscapers. What consumers didn’t realize is that the regular line and the pro line were the same products coming off the same assembly line. The only difference was the price (and the marketing)
Broadly, I agree that consumer protections are protecting consumers from themselves.
But in cases where consumers are indirectly exposed to the harmful product (e.g., lead paint in a hotel room, unsafe vehicle in an uber, cancer-causing cleaner used in a hotel room), the risks aren't necessarily visible and can be hard to avoid at any price point.
I think regulation of a minimum safety standard while leaving luxury to the market is an acceptable concept. The problem of regulation run amok reflects a poor application of the principle.
I too could live with minimal safety standards.
But minimal is frequently not what we get.
IMO Bryan’s argument would have been stronger still had he noted that prior to the Internet and social media age, one could defend the “asymmetric information” problem’s validity more strongly than you can today..
I.e. justifying more regulation in the past, but noting that the basis is largely gone.
I wondered why you picked on Oakland, so I asked AI to rank property crime rates and it really is the worst city in the US!
What's different about Oakland than any other American city of similar size? Isn't Oakland situated in one of the most desirable regions of the state, country, world?
Quite a bit:
Rank City Property crimes per 100,000 residents Reported incidents Population
1 Oakland, CA 7,230.3 31,455 435,042
2 Memphis, TN 6,899.0 42,305 613,207
3 St. Louis, MO 5,706.9 15,825 277,294
4 Tacoma, WA 5,603.6 12,551 223,980
5 Baton Rouge, LA 5,526.6 12,108 219,086
It's a mystery. All over the country. Different climates, state governments, levels of economic development. Makes no sense at all.
Perplexity AI: For the prior top-10 list—Oakland, Memphis, St. Louis, Tacoma, Baton Rouge, Portland, Berkeley, Little Rock, Salt Lake City, and Minneapolis—the strongest interpretation is not “race causes property crime” or “low education causes property crime.” Property-crime rates more plausibly reflect a mix of concentrated disadvantage, inequality and segregation, density and visitor activity, the supply of stealable goods, drug and auto-theft markets, enforcement/reporting practices, and local geography.
"Do you really think that the rich cannot get all the luxury and convenience they’re willing to pay for? No? Then what’s the point of the strict safety regulation?"
There is much less information asymmetry with regards to luxury and convenience than safety. In fact, you could argue that if I don't notice an inconvenience, that means it wasn't an inconvenience after all.
If I'm taking a bus, I always know whether the bus stop is in a convenient location for me. But I can't tell whether the bus has been built and maintained correctly.
My brother is, in fact, rich, and has had trouble buying good versions of various things because of dishonest and/or incompetent sellers.
On air pollution, if they're smart, they pack their house with HEPA grade air purifiers, I know that's what I do. Huge difference in quality of air (you can measure this), and Dynomight has shown us that this is one of the bigger health interventions you can do after exercise and eating well. Other studies have shown that having purified air in generally polluted cities helps cognitive / work performance, too, it's win / win and everyone should do it.
Most consumer protection regulation create a baseline of safety, and protect consumers from an obvious information asymmetry. I think you know this, but choose to write these silly straw man polemics. Seems like you no longer value your readers time.
You can always get what you’re willing to pay for.
https://youtu.be/eLjsDQyW5Y8?is=zVDaOVHM777d9NZs
Sometimes you pay for it but don't actually get it, such as in the case of quack medicine that promises to treat things that known-effective medicine can't.
True but I’m not sure what that means in terms of Caplan’s position.
Rich people (all people in fact) are susceptible to fraudsters. The one that comes immediately to mind is Madoff. Rich people trying to become richer were seduced by Madoff’s apparent talent for generating positive returns for his clients during bad markets. Here the rich got exactly what they paid for (someone who had no trouble telling them what they wanted to hear). Those very wealthy rich folks paid for a lie (and got it!).
PS—When something sounds too good to be true, it’s usually not.
It's a counterexample to "you can always get what you're willing to pay for".