More of David Pogue's anti-capitalist bias

David Pogue is a good reviewer but often bad in his moral assessment of business practices. In a recent New York Times article about T-Mobile’s decision to change a few important terms of its cellular service, he summarizes at the close what he asserts in the opening, that "the two-year contract is an anti-competitive, anti-innovation greed machine."

The Great Cellphone Subsidy Con is indefensible no matter how you slice it — why should you keep paying the carrier for the price of a phone you've fully repaid? — and the two-year contract is an anti-competitive, anti-innovation greed machine. Those practices should stomp right across your outrage threshold.

Presumably the cellular companies do nothing to earn their revenue but sit around counting the money that comes in.

The same charges of greed and anti-innovative anti-competitiveness could be made against a home owner or any renovator, or any investor of resources, who charges more for an improved product than the labor and materials required to make improvements in the product or to create a product or service to begin with. Pogue assumes that is that there exists a certain “just profit,” and that if a businessman earns more than this "just profit" or "surplus profit"--some arbitrarily fixed amount of revenue above quantifiable costs--he is ripping somebody off.

I have never signed a multi-year contract for a cellular plan, even in the days when prepaid options were much scarcer. Part of the reason is that I didn't want to be locked in. Perhaps if I had had a more urgent need to use a cell phone more sophisticated than a Tracfone, it would have made sense for me to lock myself into a contract. I never felt ripped off by multi-year plans because no one ever shoved a gun at me and said "Get the multi-year plan or else!"

Is there something about multi-year cellular plans that prevented Tracfone, other providers of prepaid plans, and T-Mobile from offering a different approach? What a seller offers may not be optimal from the perspective of a consumer's wish list that fails to take into account all relevant considerations. But there is nothing "anticompetitive" about not having done things the way a competitor now does who tries to take customers from other businesses by doing something different (i.e., by innovating). What's "anticompetitive" are coercive barriers to entry--imposed by governments, not businesses (though businesses may wrongly encourage governmental assaults on competitors).

If a company misrepresents what it’s selling, it's appropriate to criticize this as dishonest. (Do people generally misunderstand the basic terms of the cellular contracts they agree to, however?) But it’s wrong to criticize a company as "greedy" for charging more than it is "supposed" to charge for services on terms nobody was obliged to accept to begin with. There's nothing wrong with self-interested pursuit of profit per se. Nor with self-interested pursuit of the benefit expected from purchasing a product or service. No participant in a voluntary trade need engage in it if he believes he'd be giving too much for what he's getting.