Amazon is the model to observe here; before that, Walmart. Red Widgets and Blue Widgets are sold. The platform rewards whichever product is cheaper. Initially this will lead to the two competing their margin away, and then the only way to compete is to start substituting inferior materials or craftsmanship. Consumers can theoretically make the choice to switch away from these products, putting the bad actors out of business, but there is a cost associated with this switch, and consumers may not always be aware of product substitutions, nor of the availability of potential alternatives.
Soviet-style command economies aren’t a better alternative, but it’s an incentive problem with market economies without an obvious solution; market fundamentalists get around it by just insisting that if consumers really cared, they’d seek out alternatives, but this doesn’t solve the problem until after it happens.
This problem is mirrored by an incentive structure observed in government where a concerted interest group can expend more time and effort lobbying for a budget allocation than an individual can expend resisting it.
Soviet-style command economies aren’t a better alternative, but it’s an incentive problem with market economies without an obvious solution; market fundamentalists get around it by just insisting that if consumers really cared, they’d seek out alternatives, but this doesn’t solve the problem until after it happens.
This problem is mirrored by an incentive structure observed in government where a concerted interest group can expend more time and effort lobbying for a budget allocation than an individual can expend resisting it.