gcdugas wrote:ISLAMATRON wrote:no such thing as your "free market"... and you call me naive
Max is an Ass...So what? all the team managers are no different... it seems to be a prerequisite to get anywhere in F1.
I agree that there isn't a free market to be seen anywhere on the globe but that doesn't mean we should dismiss what it teaches us. Supply and demand are laws as much as gravity, buoyancy and other physical laws. They are in effect 24/7 whether we acknowledge them or not. We ignore them only to our own peril. Say someone is playing water volley ball. They can suppress the ball under the water and say, "I do not recognize the law of buoyancy." They can keep this up for s period of time but only at the expense of energy and denial of reality. They will lose in the end. So it is when economies, nations, banks and investors ignore free market principles. Communism was propped up for decades but at great human expense and reality ultimately asserted itself.
Here is reality applied to racing... There is a need for world manufacturers to be competing on the world stage technically. Presently F1 fills that need to an acceptable degree. If it no longer does, that need will be filled elsewhere. In the not too distant "golden days" (coinciding with the "Fangio era"), we forget that Le Mans had way more cache than F1. Ferrari used F1 to bolster its budget for Le Mans which is where it true priorities were, as did Mercedes, Alfa Romeo, Porsche, Ford etc. F1 can claim to be the "pinnacle", but like the ball underwater, reality asserts itself. A 40M Euro low budget series with no-name players holds no interest for the manufacturers as it does not meet the demand for a true "pinnacle" on the world stage. I would say that F1 eclipsed Le Mans around the time Renault began the turbo era. There was spectacle, titanium sparks flying, massive engine blow-ups, BMW soon entered, TAG Porches, carbon fibre replaced aluminum and the manufacturer era was upon us. For all the romantic memories of the Cosworth era, it was largely viewed as rich boys (garagistas) playing with their kit cars such as Hesketh etc. The technical pinnacle was still in Le Mans and thus it held the manufacturers interest.
In conclusion, F1 presently is viewed as the pinnacle. That status is threatened by Max's vision for the future which would lower F1 unacceptably. The law of supply and demand (free market principles) will not be ignored any more than the volleyball under the water can be ignored. Reality will assert itself. Thus it is the FOTA which seek to preserve F1's status as the pinnacle even if paradoxically it means breaking away to start a rival open wheel series as they distance themselves from the corpse that F1 will become under Max's vision.
Free market law is every bit as real as that of gravity. We are in a world wide recession/depression because centralized economies are themselves antithetical to reality. Yes the ball was held under the water but its emergence according to reality and the accompanying adjustments are the pain we experience now. More centralization is NOT the answer. It is trying to put the ball back under water. We need decentralization, deregulation and the destruction of state endorsed special interests. Reality... its a bitch.
Long live the decentralized autonomy and self determination of the teams. It is the surest path to a healthy F1.
Spoken like a true advocate of Milton Friedman's Chicago school economics theory.
The central tenet of Chicago School economics is that perfect markets create a perfect self correcting system, but therein lays the problem : markets are not perfect.
The problem is that markets are run by humans. Humans panic. Humans get sucked into group think. Humans are corrupt. Humans follow their own agendas. Humans are blinkered & humans aren't always quick to notice opportunities and risks.
The "laws" of the free market have been disproven time and time again in the real world (from the free market revolution under General Pinochet to the free market reconstruction after hurricane Katrina). The "laws" of the free market have been thoroughly debunked by the recent collapse of the US financial system & should now only be referred to as "guidelines", however this is a motor racing forum & I am not going to launch into a lengthy political diatribe.
Strangely enough, the situation in F1 isn't that different from the recession (henceforth known as Moneygeddon).
The endless pursuit of the team's own interest (much like the banks), driving up the cost of success through relentless competition (much like the stock market), chasing diminishing returns at the expense of those who simply cannot afford to compete until eventually one of the teams realises that all of it's investments have brought it to nothing and then collapses, leading to a crisis in the whole system. The remnants of the team that caused the crisis of confidence are bought up for nothing, leaving the other teams with the choice of facing strict austerity measures under heavy new regulations or closing down entirely.
The unregulated free market leads to boom after bust in a never ending cycle, because humans inevitably chase after the bottom line until it becomes unsustainable before then stampeding like frightened cattle when their business model is proven to be flawed.
This is what we are seeing in F1.
Moneygeddon has caused the board members of the manufacturers to panic over their own self interest (the success of the company). The corporate teams have slipped into groupthink (hence their collective bargaining through FOTA), the Commercial Rights Holder is corrupt (Bernie "We Bought Ferrari's Loyalty" Ecclestone), Max is negotiating under his own agenda (as you say, it's all about power) and Ferrari are being blinkered (seeing their interests as being the same as those of the sport).
As for how swiftly any of these parties are recognising opportunities and risks, this current game of brinksmanship appears to be more like a game of chicken than a rational way to run a business.
Do you think that Brawn GP was created under free market principles?
Is Ferrari "too big to fail"?
Needless to say, it is unsurprising to me that the response to Moneygeddon of almost every government in the world has been to implement socialist policies that aim to boost the flow of money around the economic system. It was an unregulated "free market" system of financial leveraging and speculation that caused the house of cards to collapse in the first place!
F1 represents the economy in microcosm : good money being thrown after bad until it collapses under it's own weight.
