When the Free Market Fails Us: The Story of Toenail Fungus and Windshield Wiper Blades

I'm all about capitalism.  It's got its problems but has proven itself to be the best system at providing the goods and services we need to maintain the best quality of life possible.  One of the problems (and the inspiration for this post) is revealed in a recent experience.  I have an embarrassing condition (apparently not too embarrassing since I announced it in the title of this post).  So here's the story:

Toenail fungus makes your toenails thick, powdery white and sometimes brittle.  So I went to the doctor (who turned out to be a PA, NOT an MD) and he said he could give me a pill that I have to take for a year and that will damage my liver.  Oh, and it only has about a 50/50 chance of working.  Or, he found the most effective thing is to rip the toenails off.  He didn't actually say "rip".  Instead he made it sound like it was simple enough that I could play soccer the next day.  So I said "rip them all off".  He wisely had me do only one foot.  If I were a woman and had given birth, I could compare the pain to having a baby.  Since I'm not a woman, I guess for now on I'll just have to say "it hurts as bad as having your toenails ripped off".

While I was limping around work in recovery, someone asked what happened.  After my reply, they asked why I didn't get laser treatment.  Apparently it takes 5 minutes and is painless.  I really don't know how to explain my emotional reaction to this news.  After about 6 months of waiting for my toenails to grow back, only my pinky toe was better.  The others seemed worse than before.

Time to try the laser treatment.  I found a Groupon deal for $360.  They did two treatments.  In this treatment, the doctor shines a laser on the toenail till it heats up, then moves it over a tiny amount and repeats until he's done the entire toenail.  I learned after the first spot that you have to tell the doctor when its hot enough. He told me this after I yelled "Ow!".  Two treatments, I waited 6 months.  NO BENEFIT.

Then I spent about $20 in over-the-counter treatments.  An oil you brush onto the nail.  I was diligent doing it every morning and night for 6 months.  The nails looked good, but were not 100%.  So I quit.  And they started looking bad again.

At this point (if you made it this far), you're probably asking "What does this have to do with the Free Market?" (Be patient and thanks for hanging in there)

This is the point that I decided to cast my search far and wide.  The consensus was that there is no cure yet I found a website that compared several products.  The top product claimed a 94% success rate.  On Amazon.com, it had a high user rating.  I always read the 1-star ratings when reviewing products.  They confirmed my suspicion.  The product was a scam with a bunch of fake user ratings and fake websites reviewing the product.

Instead, I decided to try and discover my own treatment.  We have a bottle of Castor Oil that we purchased for $2  It's about 5 times the size of the $20 bottle of special toenail fungus treating oil.  I drenched my toes in Castor Oil and put plastic bags over my feet (for about an hour).  I also do the daily application.  After about a week, my toes look better than they have with any of the other treatments.  They aren't cured yet, but this is where I make my point about the Free Market.

Getting information to the public is expensive.  Google and Facebook are mega billion dollar companies because of all the money other companies spend trying to connect to the public.  No one is going to get rich selling $2 bottles of Castor Oil to treat toenail fungus.  I'm sure there are many other cheap alternatives to our everyday needs, but companies aren't interested in providing cheap alternatives unless they can make good money.  Selling expensive lasers to podiatrists and selling tiny bottles for $20-$30 at Target or online is what makes money.

Years ago I bought a set of silicon rubber windshield wiper blades.  Best windshield wiper blades I ever owned.  They worked great for years.  The only reason I no longer have them is that I sold the car they were on.  The company that sold them is out of business.  You don't stay in business by selling something that lasts forever.  You stay in business by selling lousy windshield wiper blades that last for a year or two and then need to be replaced.

Conclusion

Skip the cures with the painful side effects, sexy technology, scamming self-promoters.  Just give me the simple pleasures.  I wish our Free Market system had a way to promote the truly economical solutions to life's needs, but instead I'm worried that these ideas are the endangered species in our competitive society.

The Dictator Game

I'm reading "Super Freakonomics" and came across an interesting story. Somehow, it seems I always end up reading something relevant to the days events. The day I read this happened to be a couple of days before the State of the Union address.

The economic games/experiments described in "Super Freakonomics" helped me understand why the President and Congress are so quick to take our money.

There are two classic games "Ultimatum" and "Dictator" used as experiments by economists for determining human behavior.

In Ultimatum, there are 2 players. One is given $20 and is asked to offer any amount to the second player. If the second player rejects the offer, neither player gets any money. The average offered was $6. It was usually rejected if it was less than $3.

In Dictator, the main difference was that the second player got no input. Surprisingly, the "dictators" were very generous.

An economist, John List, thought these experiments didn't agree with real human behavior. He tried a couple variations:

The first variation: Dictator game with an additional option of being able to take $1 from the second person. The result was that fewer people gave money. The power to take people's money (taxation) makes you less generous!

The second variation: the Dictator game, but the first person is told that the second person also was given $20. They are told that they can still give any portion of their money, or take any of the second persons money. The result was that only 10% gave money, more than 60% took money, and most surprising more than 40% took ALL the money. Taking money from the rich makes you want to take ALL the money!

3. The final version of the game was the same as the last version, except that both players had to WORK for the $20. The result was that only 28% of the players took money away and 2/3 neither gave nor took a penny. We respect other people's property more when everyone works for what they have!

The last version is my favorite. I think it is evidence that a free-market economy is the best option. So what does this have to do with the State of the Union address this week?

Congress and the President are acting like dictators in game 2. What they don't realize is that they are actually playing the "Ultimatum" game and the American voter is about to "reject" their offer and vote them out of the dictator position. Test results won't be in until November.

Apple vs. The Czars

My son had his Apple iPod Nano stolen at school. I don't remember if it was from his backpack or his locker. I do remember that I got mad at him for bringing it to school in the first place. This all happened before Christmas and his birthday, so an obvious present for him was a replacement MP3 player.

I was concerned about replacing it just to have it stolen again. I would prefer he buy it with hard earned money in order for him to place greater value. I wanted to keep our losses to a minimum by buying the cheapest alternative.

Notice all of the "I"s in the previous paragraphs.

So what did my son ask for? An Apple iTouch. Ouch! That's an expensive alternative! Of course my lovely wife thought we should get the iTouch, since she has a different philosophy:

• Christmas and birthday presents are supposed to be about what the recipient wants.
• Presents don't have to be practical.

Luckily she helped me realize that I was acting a little too much like a czar. A czar is all about top down decision making. The czar knows best.

So my son got an iTouch and I got a LG Chocolate Touch cell phone. The LG is the first new cell phone I've ever had, since I am always practical and take the hand-me down phones from my wife.

The LG Chocolate Touch is pretty cool.
The iTouch (and iPhone) is ABSOLUTELY AMAZING!
So what's the difference?

The difference is top down planning vs. free market. Both LG and Apple use top down development to create cool technologies, but Apple uses the free market to completely blow away LG. The difference is in the "apps" or applications you can use.

Apparently LG uses the czarist or top down approach. The czar defines what will be on the phone and the peon developers implement their plan. I'm not insulting the developers; just the czars. The developers probably have a lot of great ideas, but weren't allowed to do them or had no incentive.

Apple, on the other hand, understands the amazing power of the free market. They made it relatively easy to create apps for the iPhone/iTouch, provide a store for selling your apps, and give you 70% of the selling price! (I bet the LG developers are lucky to get 1% of the selling price of their apps). The result is over 100,000 very cool apps.

Why does this work? It's all about the protection of "life, liberty and the pursuit of happiness". Get rid of the czars and let the people create freely. Give people cool options and they will spend money.

Here's a few of the iTouch apps:

1. Koi Pond - Relax while you watch koi fish in a pond. Touch the water and it sends ripples and the fish scatter. Hold your finger steady and the fish come and nibble on it (at 4:50 in video).
   
2. Earthscape - Spin the earth and zoom into anywhere to see satellite imagery. Find your house or go to Paris or Egypt.
   
   
3. Shop Savvy - Find the cheapest prices. Take a picture of a bar code and find out the lowest price and where to buy it online.
   
4. Flute - Hold your iPhone like a flute and blow into the microphone to create music. Use the Google Earth map to find other people playing their flutes and listen to their music.
   
5. Finger Twister - Like the classic game twister, but you play with two fingers with a friend.
   
6. Level - Use your iPhone as a bubble level. Place it sideways on a shelf or picture frame to see if it is level.
   
   
7. Fishing - Pick a fishing spot, make a casting motion with your iPhone and then real in the fish using the touch screen.