Three years ago, Blockbuster was embroiled in an awful class-action lawsuit concerning inflated late fees for returned videos, and rental companies were hammering consumers with high and escalating fees. Those who held onto their videos and DVDs, or, worse, lost them, tended to cower in fear, feeling like criminals on the lam. A wonderful service offered by the market had become, too easily, a source of conflict.
In the meantime, it appears a great deal of entrepreneurial judgement has been exercised by rental firms. Instead of punishments and fines—the government’s only way of dealing with recalcitrants—these companies now offer discounts for returning, probably after discovering the high costs associated with enforcement. Hastings now calls with the good news that if you return your DVD, you pay half the original rental price and earn a discount on the next movie you rent. Clearly, the competitive pressure in the market, led by Netflix and Comcost On Demand, is toward zero late fees.
What was once treated as a civil infraction is now nearly a thing of the past, thanks to market pressures to innovate in humane ways that consumers like.
And here we have yet another contrast between the market means and the political means: the market deals with people humanely while for the state it always come down to do or die.
