Thursday, July 17, 2014

Arbitrary macht frei

Adam Smith warned us, in his Wealth of Nations, that businessmen seldom meet without the conversation turning to ways of fleecing the customers. Smith also showed how competition undermines those attempts at conspiracy. And it isn't because jack-booted police break them up;
The conspirators met at the Hotel Atlantic Kempinski, a turn-of-the-century building on Hamburg's elegant Alster Lake. There, where the lobby is chandeliered and the bathrooms marbled, representatives of Germany's most important meat manufacturers gathered to illegally fix sausage prices. It may be the most lucrative Wurstkartell in history.
Now, the sausage-makers have been caught. On Tuesday, German antitrust authorities fined 21 producers nearly $460 million for colluding to fix prices for Germany's favorite meat products. 
 Authorities carry a lot of weight in Germany...still.

So do they with the writers and editors at Foreign Policy, ironically. We note the utter credulousness with which they accept the authorities side of the story.

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