Industrial Seigniorage: The Other Face of Competition
Résumé
This paper presents a novel perspective on industrial practices in modern competitive capitalist
economies, questioning, in particular, the link between prices, competition, and the quality of
goods and services. It tries to characterize a business practice that consists in reducing prices
and maintaining (or increasing) profit margins by reducing the quality of goods and services while
still presenting them as the same as before. The paper is primarily concerned with the practice
of producing inferior quality goods by reducing the quantity of inputs used in the production
process, or mixing inputs with cheaper constituents. The proposed term for this practice,
“industrial seigniorage,” is based on the historical privilege of feudal lords (from Old French
seigneur), who—possessing the right to mint gold coins—made a profit by adding cheaper base
metals to the bullion. The present, essentially exploratory investigation attempts to delineate
the widespread existence of such practices in various industrial sectors. It strives to explain
the fundamental elements of consumer behavior that enable this practice to exist and discusses
the effects of industrial seigniorage on several social issues. The attempt of the paper is finally
to show that contrary to the ideology of capitalism, competition does not necessary lead to
benefits for consumers or to an increase in product quality.
Domaines
Economies et finances
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