Tuesday, February 27, 2007

And now back to reality, sadly....

The Competition Authority, that sleeping Cerberus of consumer protection on this sainted isle, has been moved by recent murmurings amongst Irish business folk about the need to raise prices in the light of the increased costs of carrying out their grubby trades here. Its mumbled roar took the form of an almost sternly worded letter to IBEC which has sent a tremor through the shopkeeping community, or would have done if they hadn't been too busy laughing their way to the nearest branch of AIB.

Business Economics, Irish style

The Authority's target was the all too common practice of 'price signalling' one more means by which businesses facilitate their traditional practice of never giving a sucker, sorry, consumer, an even break. A CA spokesman was heard to mumble something on the lines of
"Price signalling can facilitate firms who should be competing against each other to raise prices in a co-ordinated manner, thus depriving consumers of the benefits of competition [not to mention their hard earned spondulicks-LG]"
Also included in this powder-puff across the bows was that august collective of brilliantined suede shoe wearers otherwise known as the Irish Auctioneers' and Valuers' Institute (IAVI) who have been grumbling about the slow down in the housing market which means they have to get off their Louis Copelanded arses and do some work for once.

Thinks: did this shower just spring up fully formed from dragon's teeth sometime in the mid 1990s. Do they not remember when it was easier to get rid of syphyllis than a house in Cabra?

In a mood for celebration at this championing of my consumer rights and confident in the knowledge that the country was once again safe for competition, I took myself off to a city centre hostelry for a pint of the brew that refreshes and used to be good for you. More fearful of a libel suit than a Armani one in these litigious times, I won't name the place but if you think RMS Mauretania you wouldn't be far off.

As the pint which was soon to be mine settled, I painstakingly counted out the coppers I had earned from a hard day's tarmacking pensioners and dealing in scrap, old clothes and horses of doubtful lineage and pushed them across the counter in the direction of the cheerful mein host.

'It's gone up. You owe me 20 cents.'

'Surely there's some mistake. The rugby finished on Saturday and Diageo aren't due to shaft their customers with another price rise until just before Paddy's day'

'Nothing to do with that, trade's down. Blame the smoking ban/drink driving laws/off-licences/exhorbitant city centre rents/the bin tax/inflation/interest rates/whatever you're having yourself. You owe me 20 cents, sorry 30 now, it's just gone up again because of the fall in trade since you ordered.'

From his perch on my right shoulder the voice of my principles shouted something about rip-off Ireland and taking my business elsewhere. His yells were drowned out by the sound of my taste buds pre-digesting the contents of the schooner of stout sitting on the bar before me. I dug back into my sporran and came up with the necessaries. The barman accepted the cash with the beguiling charm of an Irish postal clerk and tossed it triumphantly into the till. One more victory for the gombeen classes.

Now it's a long time since I studied the dismal science of economics but somewhere in the backmost beyond of the thing I laughingly call a memory was the faintest trace of something I believe is known as the law of supply and demand.

If I can explain for non-economists without the aid of graphs, what this law says is that when demand for something is high so are prices and the converse is also true. In short when your trade falls off, you lower your prices until consumers start buying.

It's said to apply universally in the global souk of capitalism. Everywhere, it would seem, except the green small corner of the emporium that is Ireland. No, our home-grown beer brokers and potion peddlers prefer to circumvent this economic universal and make up the difference from the pockets and purses of the plain people of Erin. Sure, now that competition fella-me-lad might be fine for bowsies across in London or New York, but it'd never be after working here. Off-shore banks accounts aren't cheap to maintain, you know.

Adam Smith ignores the Irish

Having diagnosed the problem I retreated to a corner to take measured sips of the little miracle of economics in my glass and ponder matters further. Fortunately, apart from 3 Italian language students sharing a glass of Ballygowan Still and a forlorn Jack Russell scouring the inns and hostelries of the city for a master missing since the final whistle at Croke Park, there was no-one to disturb my cogitations. Meanwhile the ghost of Adam Smith looked down and chuckled.


100percent said...

Hmmm..enjoying your blog, m'lad. Two points to make... Firstly, may I remind you learned fellow that brevity is the soul of wit. Secondly, from the nether regions of my own learning past, I seem to remember the notion of a marginal rate of substitution or something to the effect that supply & demand phenomena can be rightly mucked up when there's no substitute for what you really want.

Liam G said...

Why thank you! Both points accepted gratefully and gracefully. Sadly, sociology and brevity rarely skip hand in hand down the same country lane. But I'm trying.