Capitalism

Capitalism Has Improved Access to Entertainment

Central planning doesn’t work.

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Reporters complain about business. We overlook the constant improvements in our lives made possible by greedy businesses competing for your money. Think about how our access to entertainment has improved.

"When I was a kid," says Sean Malone in a new video for the Foundation for Economic Education, "my TV broadcast options were PBS, Fox, ABC, NBC, and CBS. Depending on the weather, it was hit or miss whether or not they were even watchable."

1977 brought the first video rental store. "We literally had to rent a VCR along with two or three movies we could get on VHS from Blockbuster," Malone reminds us, pointing out how much changed. "Now just about anything I've ever wanted to watch is available at the click of a button."

Here's a short version I released this week of the FEE video. It wasn't government or big movie studios that made the amazing array of new options available. They dragged their feet. Malone points out that "the astounding wealth of home entertainment options we have today are the result of entrepreneurial start-ups, like Blockbuster."

Blockbuster letting people watch movies whenever we wanted was a big improvement. But people are ingrates about the things capitalism makes possible. In the 1990s, people complained that Blockbuster's chokehold on video entertainment was so strong that the company would be able to censor anything it didn't like.

Special sanitized versions of movies were distributed through Blockbuster. How would we ever get to see the movies as they were originally intended? Clearly, Blockbuster was a monopoly. Government should regulate "Big Videotape" and break up the Blockbuster monopoly!

Government didn't. Yet Blockbuster is now bankrupt. Its competitors offered so many better things.

That's something to think about now when people call Facebook and Google monopolies. A few years ago, people claimed Netflix had a monopoly.

But without government suppressing competition, Netflix had no way to maintain its temporary hold on the streaming market. Other companies caught up fast. Customers decide which businesses succeed and which ones fail.

This is why centrally planning an economy doesn't work. "Politicians and bureaucrats don't know what people are going to value," explains Malone. "They pick winners and losers based on what they want or what they think is going to earn them the most important allies."

Blockbuster's demise began when it charged a man named Reed Hastings $40 in late fees. That annoyed him so much, he started a subscription-based, mail-order movie rental company he called Netflix.

Then, Netflix made movies available online.

Now we have instant access to more entertainment than ever through Disney+, Hulu, Amazon Prime, etc., all for a fraction of the cost of the original Netflix.

Still, we complain. That's how it is with capitalism, and it's a wonderful thing. While we complain, entrepreneurs like Hastings invent faster, easier ways to get us what we want. Many offer us options we never knew we wanted, putting old giants out of business.

There is an economics lesson in that. When entrepreneurs face competition, they often lose, but the fights make life better for us consumers.

This process of old things being replaced by new and better ones was dubbed "creative destruction" by economist Joseph Schumpeter. We see creative destruction in every industry.

The first flip phone cost $1,000 and couldn't do the things we expect phones to do today. Competition drove further innovation. We got the Blackberry, and then the iPhone.

What amazing things will businesses come up with next?

Malone's video points out that the best way to find out is to keep government and central planning out of the mix.

Once government wades in with regulations, it tends to freeze the current model in place, assuming it's the best way to do things.

But the best way to do things is one that we haven't even thought of yet, produced by the endless creative process called competition.

COPYRIGHT 2020 BY JFS PRODUCTIONS INC.
DISTRIBUTED BY CREATORS.COM

NEXT: Is CCPA short for “Law of Unintended Consequences”?

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  1. Stossel, thanks for showing unreason staff how to be Libertarian-ish.

    Pretty good for an ex-Lefty Propagandist in the MSM.

  2. Fox started in ’86 so that Malone guy grew up in the 90s when cable was available.

    1. I grew up with only ABC, CBS, NBC, and PBS. No Fox. No cable. We did have an independent station, but eventually got bought up by Fox. It was mostly a local news plus reruns station.

  3. I live in a rural area, so I can’t get internet that will allow me to stream video. Or music, for that matter. Hell, I can’t even watch Youtube, really.

    Blockbuster’s demise was a number of factors. Firstly, Hollywood acted like a cartel in the VHS era, essentially pricing movies at $100 or more. This meant people could not afford to buy them, but rental businesses could. This changed in the DVD era.

    Then you had competition from libraries. Not only did they move into the DVD rental business, they also rent games. Hilariously, a local blockbuster has been replaced by a library in the same building.

    1. Satellite high-speed internet will soon be an option everywhere. Keep an eye out for it.

    2. That’s really rural then. Streaming music is bandwidth cheap. Can you get satellite?

      Blockbuster lost it’s “monopoly” early on. Every tiny town had it’s tiny video shop with only a few dozen titles (plus porn in the back). But real competitors did pop up. I saw the demise start with kiosks, and then with cheap DVD purchases. But it was the Netflix DVD service that finally did them in.

      Blockbuster could have lasted, but it was too slow to change. Not it’s fault, as Netflix DVD had special arrangements from the US Post Office so no one else could compete with them on shipping speed and cost. Now they’re trying to push net neutrality for the same reason, special privilege from the government.

  4. People should be attending struggle sessions, not watching entertainment!

    1. That, and awarding Social Credit points.

  5. Thanks John, any word on which of the two major parties speaks well of capitalism? Perhaps libertarians should consider supporting the people who support capitalism. States rights? I think there’s a party that supports that much more than the other.

    Any chance they’re one in the same?

    1. > Perhaps libertarians should consider supporting the people who support capitalism.

      That’s certainly NOT the Democrats. But neither is it the modern Republican Party, which abhors free trade, loves crony deals, and tries to issue edicts to private businesses via tweets from the D.C.

      The Libertarian Party is the only party today who supports the principles of capitalism: freedom in all economic areas, with only force or fraud being outlawed. At one time the Republican had some rhetoric sort of in that area, but they’ve dropped even that.

      1. Your best efforts to paint a few Trumpisms as “just as bad as the Democrats” have failed miserably.

  6. Sometimes capitalism works a little too well and now I have to sign up for 6 different streaming services to get all the content I want

    Still cheaper than cable though lol

    1. That content is also on-demand and ad-free (at least for now). If money is tighter, you can rotate between services as they don’t have contracts or equipment installation.

  7. I wish capitalism (or something) could improve access to what we (each other) think(s). As it is, intellectual-property rights enable prive operators like Amazon.com to censor expressions of ideas they disapprove of, and few, if any, can every express those ideas, and even fewer happen across those expressions. http://www.codoh.com

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  9. capitalism works a little too well and now I have to sign up for several different streaming services to get all the content I want.

    Still cheaper than cable and airocide

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