I suppose it’s not a very good news for me, but Kindle 2’s price has been cut down once again, to $260. I think there’s an international version (wireless access outside U.S. included, I think) for $280 or something, too.
If anything, this is proof that capitalism works, when there are good capitalists (such as executives at Amazon) around, where there is enough competition (Sony’s new, cheaper readers provide real competition with wireless access, unlike iLiad’s readers, which are too expensive and lacks wireless), and where there is not enough regulation to choke the life out of the market.
Competition will drive price down. We don’t need some sort of “consumer protection agency” forcing companies to charge a fair price. Remove the barriers to entry, and the “exorbitant” profits themselves will be the driving force behind the downward pressure in price—increasing supply, attracted to the good profit, ensures that.
Capitalism works not because of virtues of any one man or organization. It works the same way scientific community works: under the usually held assumptions, there is a self-correcting mechanism in place. In science, it’s the principle of peer review—unless the entire community is rotten to the core, bad research will out itself because no one will be able to reproduce it. In capitalism, it’s the price and competition—any misallocation of resources will correct itself because that precise misallocation is an opportunity for profit (see: international trade) and that profit attracts more competitors, which forces everyone to offer lower price or lose business.
On the other hand, socialism works only when there are benevolent, wise government officials. Are you really willing to take that chance?