CreateDebate is a social debate community built around ideas, discussion and democracy.
If this is your first time checking out a debate, here are some quick tips to help get you started:
Arguments with the highest score are displayed first.
Argument replies (both in favor and in opposition) are displayed below the original argument.
To follow along, you may find it helpful to show and hide the replies displayed below each argument.
To vote for an argument, use these icons:
You have the power to cast exactly one vote (either up or down) for each argument.
Once you vote, the icon will become grayed out and the argument's score will change.
Yes, you can change your vote.
Debate scores, side scores and tag scores are automatically calculated by an algorithm that primarily takes argument scores into account.
All scores are updated in real-time.
To learn more about the CreateDebate scoring system, check out the FAQ.
When you are ready to voice your opinion, use the Add Argument button to create an argument.
If you would like to address an existing argument, use the Support and Dispute link within that argument to create a new reply.
You can share this debate in three different ways:
#1
#2
#3
Paste this URL into an email or IM:
Click here to send this debate via your default email application.
Click here to login and CreateDebate will send an email for you.
Given that monopolies occur, what is the best way to deal with them?
It is a natural consequence of economy that monopolies will occur; given that competing businesses will have different profits, that there is an inherent advantage towards self-interest, and that the natural advantage a business has is proportional to its size.
The question therefore ought to be, given that they are inevitable, how best might we handle the problem of monopolies?
Is there a way to subvert their affects on government and our society, or is it the case that we will always need to stand diligently against business interests meddling in our lives?
I have run through several scenarios involving government intervention, but every one of them (focused taxes, sponsored competitors, public stakes etc) resulted in corruption. Therefore it seems necessary to remove all government involvement in the matter. Theoretically, developments in product availability and technology will cause a shift in power.
For example, a massive corporation controls 90% of the personal computer market by selling affordable, serviceable (in the operational sense) computers. Its main competitors operate by selling high-cost, high-performance PC's. Starting from that high-technological base, the smaller companies may be able to incorporate the higher performance into an equally affordable unit. This would naturally result in a shift in sales in favour of the smaller companies.
Of course, corruption is a highly probable occurrence. People may be bought out by the larger company and sell the secrets to the technology, governments might cripple the competitors in exchange for favours. The result, in the worst form, would be a total monopoly.
I believe the main opposition to monopolies to be the cost to the consumer. If that is the case, then the following should be observed:
The monopoly then raises its prices, secure in the knowledge that it has no competitors. However, a new company is formed which can sell for less than the artificially inflated prices of the monopolistic corporation. Again, a shift in sales and relative prices occurs.
It seems we have come full circle. The cycle is set to begin again, so some form of intervention is necessary. My course of action would be as follows:
1. Set up an independent industrial watchdog. Fund it through a special tax of a suitable percentage (less than 1%, of course) on all businesses with a turnover of greater than £2,000,000 per annum.
2. Give it the authority to give grants to smaller startup businesses in sectors in which a confirmed monopolistic or near-monopolistic presence is detected. The total amount issued per annum must be above an appropriate (considering staff) percentage of the prior year's income.
However, as always, the problem lies with corruption. The necessary policies cannot be implemented without government force, so all manner of avenues are opened up for corporations to capitalize on the scheme, or defeat it outright. I can see no way around this, as nobody but the government has the authority to implement national policies.
Is your source of monopolization, government or private?
Its main competitors operate by selling high-cost, high-performance PC's.
This is overt with IBM source to Apple source?
It seems we have come full circle.
HOW?
No company as you perceived can control and manipulate supply and demand in a free market. Monopolies are only possible in coercion, such as government monopoly. Government only has the true source of monopolization.
Monopolization is not feasible without force. As long as voluntary choice, businesses can't force me to purchase their product unless government passes Obamacare and forces people to purchase health care. SEE...In the U.S., this is forced private monopoly.
1. Set up an independent industrial watchdog.
This already exists, and it is not working in the U.S. Federal Trade Commission.
2. Give it the authority to give grants to smaller startup businesses in sectors in which a confirmed monopolistic or near-monopolistic presence is detected.
Again, there is no such thing as private monopolies unless force.
Abolish government intervention because most sources of monopolies are formed from government interference.Monoply
Three forms of monopolies exist: 1. Coercive Monopoly (Government Monopoly) 2. Natural Monopoly (Government Granted Monopoly) 3. Private Monopoly.
Coercive Monopolies are the most destructive form of monopoly. Government monopolies rely on force because it prohibits competitors from entering the field through a myriad of laws and regulations where it is able to fix pricing and production decisions without competitive forces. The only way for monopolies to exist is to control the supply and demand, and coercive monopolies have the means and ability to manipulate both through force; thus, it is the sole provider of the good or service. Therefore, when no competition exists, technological or product innovation is non existent.
"A coercive monopolist will tend to perform his service badly and inefficiently." ---Murray Rothbard
Natural Monopolies like its counterpart are forced by government, yet in some cases for private companies due to apparent economies of scale reasoning; however, this type of monopoly is only exists in theory, but in practice, they only exist as transitory states. In other words, some industries at first may require an natural monopoly but overtime, they eventually crumple due to innovation and technology.
Private monopolies without government help are impossible because of one reason, voluntary choice.
As for the only one accounted private monopoly, De Beers diamond controlled every aspect of mining: open-pit, underground, large-scale alluvial, coastal and deep sea. Therefore, voluntary choice was eliminated and replaced instead of government force, it was private force, because all competition was gone.
Voluntary choice is the key between businesses and governments. Businesses are simply unable to force me into buying their product. As long as competition exists among businesses due to free choice, no one firm will ever have the the power to manipulate prices through supply and demand. Even if one firm could have the ability to manipulate rates, the result would be the establishment of smaller firms, who will attempt to under sell them.
A private monopoly can only exist with the assistance of force, and since government is the only entity capable of force through fear and intimidation, the idea of private monopolies is simply misleading and inaccurate.
Phhhhahahahahaha!!! It's hilarious how shamelessly you profess the inevitability of a monopoly in this post. It's almost as though you feel saying it a bunch of times will make it so.
You're reasoning as to why monopolies "must" form doesn't follow at all and anyone with even a high-school level understanding of economics can see why. Just being "big" isn't enough to get customers, you have to appease the demand and if you're doing so to a lesser degree than your competition then it doesn't make much difference if your competition is smaller then you, your customers will be driven away from you and towards them thus making them larger than you.
Even with government subsidies and barriers to entry, oligopolies are rare enough, let alone monopolies! At least if you had said "given oligopolies occur..." that would be closer to the truth, but this is just silly. Without these things, the only other way to become a monopoly is to supply the demand so well that all other competition knuckles under to your proficiency.
So, to answer your question, the best way to deal with (natural) monopolies is not to. And this is why;
If a firm somehow managed to build its way up to monopoly rank without government (XD), then one of two things will happen.
1. The firm will continue the proficient practices that made them a monopoly in the first place, so there's no problem
2. They enact monopoly rates, driving away customers and propping up smaller firms which will under sell them. So, still no problem.
The problem isn't these cruel firms corrupting poor old daddy government, it takes two to tango and so the choice becomes to either criminalize capitalism or abolish the state.
And if you want to get technical about it, criminalizing capitalism wouldn't stop it, it can't happen so long as competition exists. That is to say, so long as living things exist. So the only option becomes the abolishment of the state.
You're reasoning as to why monopolies "must" form doesn't follow at all and anyone with even a high-school level understanding of economics can see why. Just being "big" isn't enough to get customers, you have to appease the demand and if you're doing so to a lesser degree than your competition then it doesn't make much difference if your competition is smaller then you, your customers will be driven away from you and towards them thus making them larger than you.
Just as a preface I am going to let you know that I will give you some respect back despite our very protracted, and to be perfectly honest eventually boring, prior debate. I consider it a matter of showing no ill will even though the debate started to possess some vitriol.
That said I will tell you your mistake. Your economic theory which supposes that monopolies cannot happen is reminiscent of a kind of laboratory economics. That is to say it proposes constraints that could happen in a perfect system, IE a laboratory, but in the real world the rules will be violated in some way, breaking the model down and allowing a monopoly to surface.
The closest example that I can pick off the top of my mind is the Hardy Weinberg Principle in biology, which is a model for how perfect genetic equilibrium may be achieved in a population and maintained. In your economic theory you are trying to introduce a perfect competitive equilibrium, because if by any means that equilibrium is broken, businesses may outgrow others and become too big for market competition to regulate.
It's kind of like evolution itself. If something can evolve, then little by little it must be capable of speciating. In business, if one may out-compete another in any way, then it will eventually out-compete its competitor if nothing changes, and if that happens it becomes more difficult for other competitors to beat it.
The problem isn't these cruel firms corrupting poor old daddy government, it takes two to tango and so the choice becomes to either criminalize capitalism or abolish the state.
I've thought about both of these situations, but here is where I arrive:
-If you outlaw capitalism, you encourage capitalism to evolve against you. Capitalism is a very natural system that behaves very much like an evolving biological population, which must imply that it is infeasible to eliminate it.
-If you abolish the state another one will emerge, inevitably, because states are the natural consequence of human social hierarchy. The period before the state will be corruptible by capitalism because any authority or source of power known by man is corruptible for personal gain.
Therefore I do not wish to stop it. It seems that it is as impossible as stopping the Influenza virus. I wish to understand a way to keep capitalism and the consequent monopolies in check.
The theory I put forward pertains to reality more accurately than any other, so it's perfectly logical to hold this position. However, you are correct that under the correct conditions, regardless of how unlikely they are, a natural monopoly can occur. This is no problem, however, for the two reasons I listed in my last comment.
Understand, even if somehow a firm achieved a monopoly rank naturally (almost unheard of) AND crippled it's competition naturally to the extent that no competition could stand against this firm (unheard of) this firm still has to appease market demand to the extent that persons would still rather use this firms service/product over not receiving it, since it's monopoly wouldn't be coercive.
In the end, everything competes with everything else. If a hamburger firm became a monopoly (for example) and no other competition could form to compete with its monopoly rates then it's very likely that persons would instead by inexpensive hot dogs in lieu of hamburgers.
the emergence of states is actually a rather rare phenomenon. it's extremely difficult to convince others to pay you so you can hold numerous monopolies over them. Contemporary states form due to revolution or the splitting of already existing states. If the majority came to the conclusion that states are unnecessary, then you wouldn't have to worry about a state forming.
The theory I put forward pertains to reality more accurately than any other, so it's perfectly logical to hold this position.
Economic theory is notoriously bad at describing real-world affairs however, so being a bit more accurate isn't so much a compliment as it seems.
However, you are correct that under the correct conditions, regardless of how unlikely they are, a natural monopoly can occur. This is no problem, however, for the two reasons I listed in my last comment.
In the real world it is possible for a business to provide insider deals to itself and friends, it is possible for a business to physically sabotage competitors, it may also sabotage them with intelligence, a business may diversify so that one cannot avoid supporting its monopoly because they are paying for other unrelated products which lead back to it, it is possible for a business to extend itself over long distances so that happy consumers in Denver subsidise bad practices like undercutting in Miami.
There are all kinds of ways to cheat the system which I probably have yet to envision. However, this is how a monopoly forms. It doesn't play by the rules. This is what is critical: a successful business need not play by the rules of your economic theory.
Understand, even if somehow a firm achieved a monopoly rank naturally (almost unheard of) AND crippled it's competition naturally to the extent that no competition could stand against this firm (unheard of) this firm still has to appease market demand to the extent that persons would still rather use this firms service/product over not receiving it, since it's monopoly wouldn't be coercive.
Mostly addressed in the above, but I wish to add some examples:
De Beers acquired sources of diamonds from afar and oversold them locally.
Standard Oil used physical deterrence to prevent competitors from successfully turning it over.
Microsoft used its large market share to benefit itself by shaping software use, and used deals with hardware manufacturers to secure its share.
The media oligarchy has owned the industry for almost a century and just barely has signs showing a losing grip. It uses a lot of fear and propaganda to keep itself successful.
In the end, everything competes with everything else. If a hamburger firm became a monopoly (for example) and no other competition could form to compete with its monopoly rates then it's very likely that persons would instead by inexpensive hot dogs in lieu of hamburgers.
Right, that's why a successful monopoly owns 90% of ranches which provide for its hamburgers, or it buys 95% of the land up which could be ranch or farmland. Maybe it owns a large percentage of bread factories, or a large segment of the transport business used to move supplies between locations.
This is the point, a business needs to diversify so that competing with it means either giving your money to it indirectly, or providing a whole host of other required services in order to provide hot dogs (ranches, transport, bread, all on your own).
the emergence of states is actually a rather rare phenomenon. it's extremely difficult to convince others to pay you so you can hold numerous monopolies over them. Contemporary states form due to revolution or the splitting of already existing states. If the majority came to the conclusion that states are unnecessary, then you wouldn't have to worry about a state forming.
For something so rare the world seems to have hundreds of them occupying nearly all land, and this has existed for millennia.
Economic theory is notoriously bad at describing real-world affairs however, so being a bit more accurate isn't so much a compliment as it seems.
A "bit"? Try to the extent that this theory predicted the great depression TO THE MONTH that it happened wile all other economists predicted nothing but growth.
In the real world it is possible for a business to provide insider deals to itself and friends, it is possible for a business to physically sabotage competitors, it may also sabotage them with intelligence, a business may diversify so that one cannot avoid supporting its monopoly because they are paying for other unrelated products which lead back to it, it is possible for a business to extend itself over long distances so that happy consumers in Denver subsidise bad practices like undercutting in Miami.
There are all kinds of ways to cheat the system which I probably have yet to envision. However, this is how a monopoly forms. It doesn't play by the rules. This is what is critical: a successful business need not play by the rules of your economic theory.
Before going further, it's worth noting that since the reasons you've listed have not resulted in natural monopolies, even in stateless nations, your theory is flawed. Either that, or reality is flawed. =/
Insider trading is a joke. The most obvious potential 'victims' of insider trading are the potential sellers who sell their stock anonymously to an inside trader. But... they would have sold anyways, so whether the inside trader buys from them or not does not affect the proceeds they receive from the sale. If the sellers are hurt by having an inside trader in the market it is difficult to measure the damage, and it appears that there is no damage. In fact, the academic literature recognizes that insider trading does not result in any harm to any identifiable group and those who sell to inside traders may actually be helped rather than harmed because they receive a better price. The confidence of investors is not expected to decline, empirical studies showed no decrease of market liquidity and the non-informed counterpart of the insider were not harmed.
Physical sabotage isn't typical either (both with and without states) since violent firms tend to loose customers.
Diversifying doesn't matter because if a firms only sales are "second hand" so to speak, they will either shrink down to non-monopoly status anyway or just outright collapse.
I don't know what you mean by "extend itself".
One last thing, libertarian economic theory isn't a "rule". If you think it is, then it's no wonder you don't seem to get this. It's a theory. It's a postulation of probability based on understand of the market and past events within it. I'm not saying "my theory states monopolies don't happen, therefore they don't", I'm saying "monopolies don't happen, therefore my theory states they don't".
Mostly addressed in the above, but I wish to add some examples:
De Beers acquired sources of diamonds from afar and oversold them locally.
Standard Oil used physical deterrence to prevent competitors from successfully turning it over.
Microsoft used its large market share to benefit itself by shaping software use, and used deals with hardware manufacturers to secure its share.
The media oligarchy has owned the industry for almost a century and just barely has signs showing a losing grip. It uses a lot of fear and propaganda to keep itself successful.
You've written this exact same argument to me already and I've debunked it already. Either bring something new to the table or go back to our other debate.
And the media? Come on, the internet has ended any "oligarchy" (?) the media could have had.
This is the point, a business needs to diversify so that competing with it means either giving your money to it indirectly, or providing a whole host of other required services in order to provide hot dogs (ranches, transport, bread, all on your own).
My advice to you; open up a hamburger company. You seem to know all sorts of ways to become a monopoly that all these other firms just don't seem to be taking advantage of. If what your saying is true, then you could be a billionaire in as little as a decade. But, since diversifying is not illegal and no firm, even in the least regulated sectors, have prompt up a monopoly due to this (with the possible exception of microsoft, but since microsoft didn't enact monopoly rates and competition formed anyway this doesn't matter) it looks like your wrong.
For something so rare the world seems to have hundreds of them occupying nearly all land, and this has existed for millennia.
Non sequitur. My argument was that contemporary states form from revolution and splitting. Past states formed from religion and very rarely throughout history has a state formed independent of other states.
A "bit"? Try to the extent that this theory predicted the great depression TO THE MONTH that it happened wile all other economists predicted nothing but growth.
I said "a bit" because at the same time the theory suggests policies that lead to the great depression in the first place. Sort of like a theory on fire that predicts accelerants with hasten the fire, but recommends throwing gasoline on the flames to put them out.
Before going further, it's worth noting that since the reasons you've listed have not resulted in natural monopolies, even in stateless nations, your theory is flawed. Either that, or reality is flawed. =/
I'm going to follow a hunch that we have separate ideas of what a monopoly is. I define a monopoly as a transient entity which owns the vast majority of the production of good(s) and/or service(s).
If this definition is followed, then:
-Standard Oil provided insider rates, physical sabotage of competitors, and it indirectly diversified so that if you bought goods from certain businesses (the ones which provided insider rates), the money went back to the same small group of men who were the heads of Standard Oil and its partners.
-Nike, Reebok, and indeed most clothing labels sell their products overseas apart from where their human rights abuses occur. Nike is a major brand, though it may not yet qualify as a monopoly, it provides an example of how long-distance may wash away blood-stained products.
-Varsity Brands is an example of far-reaching subsidiaries which give the appearance of a diversely competing market, when there is none. It owns the majority of the market on Cheerleading products, and has been behind a number of severe conflicts of interest.
-Microsoft is a recent example of monopoly where the greatest competition is with its own software (Windows 7 competes directly with Windows XP). Apple and GNU/Linux occupy such a small market share (in software) that they are like a blip on the radar. They use insider deals with hardware companies (both PC makers and chip manufacturers) to stifle the progress of Apple and GNU/Linux, and they promote the image that GNU/Linux is a political or licensing threat/threat to computer security/costs more to invest in/etc.
-De Beers was a recent monopoly that bought out sources of diamonds and flooded the market with grades that competitors used, until they went bankrupt and it occupied the vast majority of market. They engaged in very slick advertising, but also the same "extension to wash away bad image" that Nike uses. In Africa the conditions to obtain the diamonds are barbaric to say the least, but De Beers sells the product far away from this conflict, and it received little attention until recently.
Insider trading is a joke. The most obvious potential 'victims' of insider trading are the potential sellers who sell their stock anonymously to an inside trader. But... they would have sold anyways, so whether the inside trader buys from them or not does not affect the proceeds they receive from the sale.
I meant insider as in, covert partners in a business create (on paper) separate businesses and provide each other special discounts, but others are charged normal rates.
However insider trading as you describe apparently works (outside of theory) because it was one of the big causes of the Great Depression.
Physical sabotage isn't typical either (both with and without states) since violent firms tend to loose customers.
Standard Oil is one of the big examples of this, Nike and De Beers get away with it because it happens thousands of miles away.
Diversifying doesn't matter because if a firms only sales are "second hand" so to speak, they will either shrink down to non-monopoly status anyway or just outright collapse.
Microsoft diversified into hardware, software, console gaming, computer games. This means if you hate Windows, you're still supporting Microsoft if you bought Age of Mythology, or own a Microsoft Keyboard. Indeed, if you are a Linux user, you still support Microsoft every time you buy a Microsoft game like Age of Empires, even though you are installing it to play on Linux.
Apple did this with the iPod, iPhone and iPad. Now they own much of the phone market, and dominate the legitimate digital music and video sales market. If you hate Apple, you're still supporting them when you download a song from the iTunes market.
I don't know what you mean by "extend itself".
In multinational or country-wide corporations, you perform a misdeed in one location and sell your product in another friendly location that is unaware of your practices. Another case is where you own franchises nationwide, and each new location protests your franchise and may even boycott your store, but the sheer income from all your other franchises means that the game of attrition heavily favours your franchise over the local businesses. Wal-Mart is the best current example of this. They treat their employees badly, displace local businesses, engage in predatory pricing, and many other practices that draw criticism; however it is impossible to directly compete with them as a small business because you are not only trying to outsell the Wal-Mart store in your town, but you are competing with some 8500 other stores which draw income from the entire world.
One last thing, libertarian economic theory isn't a "rule". If you think it is, then it's no wonder you don't seem to get this. It's a theory. It's a postulation of probability based on understand of the market and past events within it. I'm not saying "my theory states monopolies don't happen, therefore they don't", I'm saying "monopolies don't happen, therefore my theory states they don't".
I didn't imply that your theory is a list of rules imposed on business owners, I was trying to imply that business owners behave in ways that violate your theory, or subvert it.
You've written this exact same argument to me already and I've debunked it already. Either bring something new to the table or go back to our other debate.
You never debunked it. You argued in favour of it, or denied it outright.
And the media? Come on, the internet has ended any "oligarchy" (?) the media could have had.
Media as in motion pictures and recording industries.
Look into ACTA as an example of how far these powerful corporations are willing to go, to win their war against our free media culture.
My advice to you; open up a hamburger company. You seem to know all sorts of ways to become a monopoly that all these other firms just don't seem to be taking advantage of. If what your saying is true, then you could be a billionaire in as little as a decade. But, since diversifying is not illegal and no firm, even in the least regulated sectors, have prompt up a monopoly due to this (with the possible exception of microsoft, but since microsoft didn't enact monopoly rates and competition formed anyway this doesn't matter) it looks like your wrong.
I believe I explained that these monopolies engaged in the listed behaviours.
Non sequitur. My argument was that contemporary states form from revolution and splitting. Past states formed from religion and very rarely throughout history has a state formed independent of other states.
There have been states for thousands of years, indeed since times immemorable. All we see now is that the entire world has been covered by them. If states aren't natural, and are indeed inferiour to collectives, then it begs the question why six or eight thousand years ago the first states weren't destroyed by rival civilisations, or due to local instability brought on by dissatisfaction.
I said "a bit" because at the same time the theory suggests policies that lead to the great depression in the first place. Sort of like a theory on fire that predicts accelerants with hasten the fire, but recommends throwing gasoline on the flames to put them out.
Wrong, but rather than spending this entire post debunking this assertion from from every angle so as to cover all the bases I'm just going to ask; how does Mises' theory that lead to the prediction of the great depression also propose policies that cause depressions?
Besides, that has nothing to do with calling his theory "a bit" more accurate. You're now criticising his theory based on it's qualitative properties, not it's accuracy. Your obfuscating.
I'm going to follow a hunch that we have separate ideas of what a monopoly is. I define a monopoly as a transient entity which owns the vast majority of the production of good(s) and/or service(s).
If this definition is followed, then:
Hold on, how major would this majority have to be for starters? 51% of production?
At any rate, these are all issues I've debunked in our other debate. If you want to know my arguments against them, you already know were to look. Besides, these things are done despite the state, so this isn't an argument for the state anyway.
I meant insider as in, covert partners in a business create (on paper) separate businesses and provide each other special discounts, but others are charged normal rates.
How is this a problem?
Standard Oil is one of the big examples of this, Nike and De Beers get away with it because it happens thousands of miles away.
I'm gunna' need a little more substance than that. ;)
Microsoft diversified into hardware, software, console gaming, computer games. This means if you hate Windows, you're still supporting Microsoft if you bought Age of Mythology, or own a Microsoft Keyboard. Indeed, if you are a Linux user, you still support Microsoft every time you buy a Microsoft game like Age of Empires, even though you are installing it to play on Linux.
Apple did this with the iPod, iPhone and iPad. Now they own much of the phone market, and dominate the legitimate digital music and video sales market. If you hate Apple, you're still supporting them when you download a song from the iTunes market.
Non-sequitur. The point still stands that a firm cannot survive on second hand sales alone, at the very least it will shrink into a small firm and be of no market threat. I find it hard to believe that there are persons out there whom hate Microsoft so much that they would want their money to in no way end up in their hands, even second hand. But if persons did find Microsoft to be such a problem they could just not buy products from anyone connected to Microsoft.
Though, this whole argument is silly. If Microsoft became such a pariah that it was only getting second hand profits, all other software companies would cut their ties with Microsoft in order to appeal to the "anti-microsoft" market. =/
In multinational or country-wide corporations, you perform a misdeed in one location and sell your product in another friendly location that is unaware of your practices. Another case is where you own franchises nationwide, and each new location protests your franchise and may even boycott your store, but the sheer income from all your other franchises means that the game of attrition heavily favours your franchise over the local businesses. Wal-Mart is the best current example of this. They treat their employees badly, displace local businesses, engage in predatory pricing, and many other practices that draw criticism; however it is impossible to directly compete with them as a small business because you are not only trying to outsell the Wal-Mart store in your town, but you are competing with some 8500 other stores which draw income from the entire world.
Well then it seems you've created an impossible problem as, by your own words, this still happens even though we have a state. The whole point of the state is to protect us from this sort of thing, right? So, does it not follow that without a state the demand for this sort of protection would leak into the market and result in firms solely designed to observe and report on the actions of other firms?
Besides, Wal-Mart isn't coercive. If money isn't being directed to smaller firms and workers are still working for Wal-mart, then it's clear that Wal-mart's "abuse" plays second fiddle to its ability to supply the market demand. Persons still shop and work there, so it seems they don't have much of a problem with it.
I didn't imply that your theory is a list of rules imposed on business owners, I was trying to imply that business owners behave in ways that violate your theory, or subvert it.
Not possible. Libertarian theory is based on observation of the market. When an event happens, we try to understand why it happened and then form economic theory based on these observations. So, it's not possible for a firm to act antithesis to libertarian theory because libertarian theory is based on the actions of these firms. Whatever a firm does/can do is included.
It's like saying "organisms can act in ways that violate the theory of evolution". Well, no, they can't, because evolution is based on the behaviors of organisms, not the other way around.
You never debunked it. You argued in favour of it, or denied it outright.
(sigh)
- A firm flooding the market with inexpensive goods (like De Beers) isn't a problem at all. They're supplying a demand and they're drastically lowering the value of the good (Diamonds, in De Beers' case). So what's the problem?
- Show me this physical deterrence from standard oil
- Your critic of microsoft is a joke. Nothing they're doing is harming the economy. I mean, "used its large market share to benefit itself by shaping software use"? Come on =/
Media as in motion pictures and recording industries.
Look into ACTA as an example of how far these powerful corporations are willing to go, to win their war against our free media culture.
Yeah, because the ACTA isn't political at all. =/
I believe I explained that these monopolies engaged in the listed behaviours.
What monopolies? Oh, you mean the kinda-sorta-by-you-definition-monopolies? The ones that I've debunked already? Besides, diversifying is still not illegal and no firm, even in the least regulated sectors, have prompt up a monopoly due to this, so you're still wrong.
There have been states for thousands of years, indeed since times immemorable. All we see now is that the entire world has been covered by them. If states aren't natural, and are indeed inferiour to collectives, then it begs the question why six or eight thousand years ago the first states weren't destroyed by rival civilisations, or due to local instability brought on by dissatisfaction.
Because states come from psychology, not because of their market proficiency. Early man was insane. He needed a constant parental projection (heavenly father) and over time this need has weakened, but the ones benefiting from this don't want this to change. So states change styles to remain in favour. This is why we have "founding fathers" or "mother Russia".
Wrong, but rather than spending this entire post debunking this assertion from from every angle so as to cover all the bases I'm just going to ask; how does Mises' theory that lead to the prediction of the great depression also propose policies that cause depressions?
Mises, based on the links you've given me and some reading I did months ago, is a strong advocate of free market and is strongly suggestive of anarchy. These conditions preclude market stability because any kind of system of investment needs safeguards to ensure integrity of the participants. Selfishness alone is not conducive to this.
Besides, that has nothing to do with calling his theory "a bit" more accurate. You're now criticising his theory based on it's qualitative properties, not it's accuracy.
Be that as it may, I am still correct. If Lamarkism was correct in predicting that animals would grow an attribute as they used it or needed it, it doesn't make it correct for predicting that non-genetic changes in their physiology were inheritable.
Your obfuscating.
No, I'm just a fast thinker. I was sincere, if pompous, in my earlier invitation. If you require all my thoughts revealed leading from point a to point b, then ask for it. Don't assume that I am engaged in sophistry because you do not follow my reasoning.
Hold on, how major would this majority have to be for starters? 51% of production?
I said vast majority. How much qualifies as vast is up to debate, since like a fine wine you know it when you see (taste) it.
At any rate, these are all issues I've debunked in our other debate. If you want to know my arguments against them, you already know were to look. Besides, these things are done despite the state, so this isn't an argument for the state anyway.
You never debunked, you merely insisted that a monopoly is impossible, or pointed to texts which claimed that monopolies are impossible (both cases under a free market).
Also you are veering on an unrelated tangent.
How is this a problem?
It is anti-competitive. If you are the chief advocate in this debate of competition solving problems, then it should worry you.
I'm gunna' need a little more substance than that. ;)
I read that Standard Oil physically blocked trade routes of competitors that were trying to undersell its monopoly rates on oil. This resulted in the competitors being forced to use a laborous and slow method of using vessels which were loaded and then decanted.
Nike and De Beers support human rights violations, which is an example of violence, but the sweat shops, child labour, warlords, child soldiers and abduction, and slavery occurs thousands of miles away from civilisation and so we are able to ignore it.
Non-sequitur. The point still stands that a firm cannot survive on second hand sales alone, at the very least it will shrink into a small firm and be of no market threat. I find it hard to believe that there are persons out there whom hate Microsoft so much that they would want their money to in no way end up in their hands, even second hand. But if persons did find Microsoft to be such a problem they could just not buy products from anyone connected to Microsoft.
Apple owns little of the PC market but dominates the phone and digital download markets, which apparently means that they are subsisting on "second hand sales," as you call them, quite well.
Microsoft is netting a tidy profit on console sales, despite the lack of enthusiasm for Vista, and current dominance of Windows XP over Windows 7. I cannot speak for hardware sales.
I forgot to mention Sega. They used to be a hardware company, producing the Sega Master System, Sega Master Drive, Sega CD, Sega Saturn, and Sega Dreamcast until they went broke from lack of interest in their consoles. They successfully survived on software sales, and transitioned into that form of business.
So yes, it is possible for diversification to work well. The point of a monopoly is to successfully diversify so much that you cannot help but take in revenue, even if people boycott some of your products.
Though, this whole argument is silly. If Microsoft became such a pariah that it was only getting second hand profits, all other software companies would cut their ties with Microsoft in order to appeal to the "anti-microsoft" market. =/
I didn't say that it had to only be second hand sales that come in, but merely that they support a monopoly.
Besides, the Anti-Microsoft companies are making it pretty big, judging by how Apple keeps growing. However the real threat is Google, who has their hand in many pies.
Well then it seems you've created an impossible problem as, by your own words, this still happens even though we have a state. The whole point of the state is to protect us from this sort of thing, right? So, does it not follow that without a state the demand for this sort of protection would leak into the market and result in firms solely designed to observe and report on the actions of other firms?
We are discussing how monopolies may exist, and how they may use their advantages to outcompete small businesses. I don't care about government here.
Besides, Wal-Mart isn't coercive. If money isn't being directed to smaller firms and workers are still working for Wal-mart, then it's clear that Wal-mart's "abuse" plays second fiddle to its ability to supply the market demand. Persons still shop and work there, so it seems they don't have much of a problem with it.
Lots of people, even their customers, despise Wal-Mart but shop there because:
-Lack of choice due to poverty.
-Lack of choice because other avenues have shut down due to Wal-Mart.
It also doesn't matter if Wal-Mart provides a service successfully here, because as we all know monopolies provide services more than adequately. What matters is that monopolies end the market incentive for them to remain innovative, fair, and well-priced. Wal-Mart is very good at providing the service of cheap goods, but it does so at the cost of homogeneity and lost consumer control.
Not possible. Libertarian theory is based on observation of the market. When an event happens, we try to understand why it happened and then form economic theory based on these observations. So, it's not possible for a firm to act antithesis to libertarian theory because libertarian theory is based on the actions of these firms. Whatever a firm does/can do is included.
Then why do they advocate Free Market as a solution to monopoly when this is historically untrue? If they adjust their theory to match observations then they must factor in the arrival of monopolies.
To use a metaphor, it reminds me of creationists who insist that their "theory" matches evidence, but when you ask them about evolving organisms they simply deny existence of these creatures. It is pseudo-openmindedness, only seeing what affirms your theory.
It's like saying "organisms can act in ways that violate the theory of evolution". Well, no, they can't, because evolution is based on the behaviors of organisms, not the other way around.
Actually not. Organisms violate evolution all the time, and what do the scientists do? They modify the theory. They don't deny the existence of these organisms and phenomena:
-Kleptoplastic animals
-Genetics
-Epigenetics
-Horizontal gene transfer
-Venomous birds
-Prions
- A firm flooding the market with inexpensive goods (like De Beers) isn't a problem at all. They're supplying a demand and they're drastically lowering the value of the good (Diamonds, in De Beers' case). So what's the problem?
It's not a problem until De Beers holds the vast majority of the market by underselling its competitors into oblivion. Then it artificially raises prices.
- Your critic of microsoft is a joke. Nothing they're doing is harming the economy. I mean, "used its large market share to benefit itself by shaping software use"? Come on =/
Same as above, if you advocate competition then you should be mortified that Microsoft uses anti-competitive practices rather than innovation to sell goods.
Yeah, because the ACTA isn't political at all. =/
Whatever you wish to call it, they are successful in prolonging their existence.
What monopolies? Oh, you mean the kinda-sorta-by-you-definition-monopolies? The ones that I've debunked already? Besides, diversifying is still not illegal and no firm, even in the least regulated sectors, have prompt up a monopoly due to this, so you're still wrong.
Diversifying doesn't cause monopoly, it solidifies a monopoly's existence by making boycott more difficult or even impractical, and stifling competitors who need an auxiliary good to compete with the monopoly which the monopoly provides.
Because states come from psychology, not because of their market proficiency. Early man was insane. He needed a constant parental projection (heavenly father) and over time this need has weakened, but the ones benefiting from this don't want this to change. So states change styles to remain in favour. This is why we have "founding fathers" or "mother Russia".
You are the one arguing that states are less efficient or inferiour in other ways to anarchy, yet you are giving excuses why anarchies are virtually unheard of historically.
Mises, based on the links you've given me and some reading I did months ago, is a strong advocate of free market and is strongly suggestive of anarchy. These conditions preclude market stability because any kind of system of investment needs safeguards to ensure integrity of the participants. Selfishness alone is not conducive to this.
This has nothing to do with what I asked. You have not shown that Mises' prediction of the great depression/ economic theory leads to depressions.
Be that as it may, I am still correct. If Lamarkism was correct in predicting that animals would grow an attribute as they used it or needed it, it doesn't make it correct for predicting that non-genetic changes in their physiology were inheritable.
No you weren't. These two theories are not analogous to each other. Mises can be both correct about the depression and the free market regardless of if Lamarkism was wrong about a few things.
Try to see it through the eyes of an economist; government fucks up the economy by doing X. Doing X inevitably results in a massive depression, therefore by not doing X depressions can be avoided. The problem is that governments need X to function. Therefore to avoid depressions, the government needs to go.
No, I'm just a fast thinker. I was sincere, if pompous, in my earlier invitation. If you require all my thoughts revealed leading from point a to point b, then ask for it. Don't assume that I am engaged in sophistry because you do not follow my reasoning.
No, you're obfuscating to make up for a lack of substance and hiding it by pretending that it's part of your "brilliance" or something ridiculous like that. Your "points" are all over the place and when I DO ask you to explain just what your talking about, instead of connecting these ideas you obfuscate even more and they split even further. They never actually meet, which tells me you're either dyslexic or compensating for bad arguments.
It is anti-competitive. If you are the chief advocate in this debate of competition solving problems, then it should worry you.
How is it anti-competitive? Because it's teamwork? Sure, but it's teamwork because of competition. Competition doesn't stop because of this, rather it gets MORE competitive.
I read that Standard Oil physically blocked trade routes of competitors that were trying to undersell its monopoly rates on oil. This resulted in the competitors being forced to use a laborous and slow method of using vessels which were loaded and then decanted.
Again, googling this only leads back to your post claiming this. =/
Nike and De Beers support human rights violations, which is an example of violence, but the sweat shops, child labour, warlords, child soldiers and abduction, and slavery occurs thousands of miles away from civilisation and so we are able to ignore it.
You and your semantics. Do you have any actual figures supporting this notion of nike/de beers sweat shops lowering the standard of living in countries they are in?
Apple owns little of the PC market but dominates the phone and digital download markets, which apparently means that they are subsisting on "second hand sales," as you call them, quite well.
What? I've very clearly been using the term "second hand sales" in reference to non-direct profit. Buying things directly from Apple (which IS how apple makes most of its money) is NOT an example of second hand sales. You had to of known this, which means you were obfuscating... again.
Microsoft is netting a tidy profit on console sales, despite the lack of enthusiasm for Vista, and current dominance of Windows XP over Windows 7. I cannot speak for hardware sales.
You would know this if you lived in a world of statistics and evidence rather than semantics and obfuscation.
I forgot to mention Sega. They used to be a hardware company, producing the Sega Master System, Sega Master Drive, Sega CD, Sega Saturn, and Sega Dreamcast until they went broke from lack of interest in their consoles. They successfully survived on software sales, and transitioned into that form of business.
So?
So yes, it is possible for diversification to work well. The point of a monopoly is to successfully diversify so much that you cannot help but take in revenue, even if people boycott some of your products.
You've shown apple, which gets most of its revenue from it's own products. Microsoft, which does the same and Sega, which shrank immensely and remains afloat now as a third party game developer selling it's games through Nintendo. Yeah, these are fine examples of the malevolent potential of diversification. =/
I didn't say that it had to only be second hand sales that come in, but merely that they support a monopoly.
Besides, the Anti-Microsoft companies are making it pretty big, judging by how Apple keeps growing. However the real threat is Google, who has their hand in many pies.
Well if a firm is only making a profit from other firms supporting it, then it isn't exactly a monopoly, is it. =/
We are discussing how monopolies may exist, and how they may use their advantages to outcompete small businesses. I don't care about government here.
Let's not be coy. You and me both know that this is a debate of state market vs. free market. If your argument isn't solved by the state, then it isn't even an argument against me anyway. Which makes it a non-sequitur.
Lots of people, even their customers, despise Wal-Mart but shop there because:
-Lack of choice due to poverty.
-Lack of choice because other avenues have shut down due to Wal-Mart.
It also doesn't matter if Wal-Mart provides a service successfully here, because as we all know monopolies provide services more than adequately. What matters is that monopolies end the market incentive for them to remain innovative, fair, and well-priced. Wal-Mart is very good at providing the service of cheap goods, but it does so at the cost of homogeneity and lost consumer control.
... Yeah. So, if they are still providing more than adequately then it isn't a problem. Also, since a natural monopoly isn't a coercive monopoly there's nothing stopping someone from innovating a better product/production method and making a killing on the market. So lets recap:
-Monopolies don't happen on a free market/ are stupid-rare (depending on your definition)
-If they do, it doesn't matter because everything competes with everything else anyway
-If they do, it doesn't matter because the monopoly isn't coercive
-If they do, it doesn't matter because as soon as it tries to raise prices it opens up the market for small firms to undersell it
Then why do they advocate Free Market as a solution to monopoly when this is historically untrue? If they adjust their theory to match observations then they must factor in the arrival of monopolies.
To use a metaphor, it reminds me of creationists who insist that their "theory" matches evidence, but when you ask them about evolving organisms they simply deny existence of these creatures. It is pseudo-openmindedness, only seeing what affirms your theory.
This is a blatant lie about my position. For months now I've been posting to you with post statistical evidence denying the sustainability of natural monopolies AND statistical evidence showing exactly what happens when monopolies don't have a state to rely on. This very post is full of such explanations. The very paragraph I've written above this one is about how a monopoly forming wouldn't be a problem anyway. Jeez. =/
Actually not. Organisms violate evolution all the time, and what do the scientists do? They modify the theory. They don't deny the existence of these organisms and phenomena:
-Kleptoplastic animals
-Genetics
-Epigenetics
-Horizontal gene transfer
-Venomous birds
-Prions
You're clearly not a biologist. What, do you think scientists are constantly making aditional assertions and connecting them to the ones proved true? If I say "rocks fall when dropped" then see an astronaut drop a rock and watch it float off into space, the statement I made isn't false, it's just lacking context. I can add "on earth" to it and be more specific.
Since the context is already assumed as the market, so long as my theory plays out in real life then it's true.
It's not a problem until De Beers holds the vast majority of the market by underselling its competitors into oblivion. Then it artificially raises prices.
Unless they own every available diamond, smaller firms can always come into the market when a firm enacts monopoly rates. Which means De Beers would have to constantly be pumping out cheap diamonds to the market, which keeps the price low anyway. Regardless of if any firm actually does this, everything competes with everything else and so a massive jump in cost will also result in a massive loss of consumers anyway.
Same as above, if you advocate competition then you should be mortified that Microsoft uses anti-competitive practices rather than innovation to sell goods.
You see, sometimes it's a matter of "the lesser of two evils" so to speak. I'll take team work and trash talking over the total annihilation of competition any day. Wouldn't you???
Whatever you wish to call it, they are successful in prolonging their existence.
Through the state, so your argument is moot. Not just moot, but totally backfired.
Diversifying doesn't cause monopoly, it solidifies a monopoly's existence by making boycott more difficult or even impractical, and stifling competitors who need an auxiliary good to compete with the monopoly which the monopoly provides.
Once again, a boycott would shrink a company below monopoly status regardless because a firm cannot sustain a monopoly through second hand sales. It can barely be done through direct profit (even with your definition of "monopoly"). Diversifying isn't a problem at all.
You are the one arguing that states are less efficient or inferiour in other ways to anarchy, yet you are giving excuses why anarchies are virtually unheard of historically.
You're argument is as though I'm making some contradiction. There's no contradiction here. Up until a few years ago (thanks to the internet) information about libertarianism was almost inaccessible (funny how it's grown so much now that the information is accessible now =p). States were easy to start up because they appealed to the same desires as religion and once you have states established they are easy to keep. Ultimately they are all unsustainable and collapse because they go against the market, but since the idea of a states necessity is still psychologically ingrained, another one pops up (usually due to revolution or splitting).
When a state collapses but isn't immediately replaced (and I mean really fucking fast) it becomes almost impossible to set one up. Ireland's "state" collapsed, was replaced by nothing, and remained that way for a millennium. Somalia barely collapsed before U.N. and Islamist invaders tried to establish power and one could argue that it still has no central government.
By just being "big" you may very well control enough of the resources necessary to enter the market, easily causing high barriers of entry to any potential competitors.
If a firm somehow managed to become a monopoly, they will not continue the proficient practices that made them a monopoly, they will continue and start the processes that allows them to maintain their monopoly and they will likely not enact "monopoly rates" for those would effect demand in a way which do not maximize profit. They may enact "monopoly rates" if they become short sighted and overly sure of their position though.
capitalism isn't a inherit and necessary system, its based on scarcity, control of labor and "defense" of what is arbitrarily claimed. If you can practically eliminate scarcity, which you can with the right application of technology, capitalism dies. The state is what defines and defends property, capitalism on it's own would define property and um "defend" in a way which would result in a more unstable society. further more without a state, the necessary legal contracts which bind people and companies would be lacking. Capitalism can not exist without the state.
capitalism isn't a inherit and necessary system, its based on scarcity, control of labor and "defense" of what is arbitrarily claimed. If you can practically eliminate scarcity, which you can with the right application of technology, capitalism dies. The state is what defines and defends property, capitalism on it's own would define property and um "defend" in a way which would result in a more unstable society. further more without a state, the necessary legal contracts which bind people and companies would be lacking. Capitalism can not exist without the state.
So I would like to ask, how exactly do we eliminate scarcity? Any ideas for this?
Co-operatives with automated resource harvesting and public distribution owned by everyone in a region, power supplied by decentralized natural renewable sources. Developing things like the reprap and maker bots so that they go the way of the computer and we have them in every house making whatever we want them to. This would make the "market" much more responsive, and instead of a company guessing how much of a product to try to sell thing by guessing what demand will be, things in demand will be made directly and almost immediately, reducing the supply and demand equation down to raw resources. I don't really see the need for money in such a society, or at least not as an essential thing. Money is a middle man, if people are willing to work for it so they can have food,a house, etc I see no reason why they wouldn't maintain the systems that let them have it for free. The most in demand materials would probably be plastics, woods, and copper. Different types of wood and plastics can easily be made in a renewable and abundant fashion in a higher tech society. Copper and such might be a issue though. Eventually E/c^2 = M may become useful but thats awhile away. Computers have already allowed for decentralized and often free publishing, authoring, information distribution, information storage, calculation etc. A system Where all or most things are individually owned except the resource harvesters, older books/ideas and the distribution system.
To sum it up I think technology is the answer. Free men have always depended on slaves, the only way all men may be free is for all of them to have slaves, ie technology.
There's a correlation between a firms size and its ability to attract customers, but it's not the causation. The causation is supplying a demand. If you're big and you stop supplying the demand, you shrink. If you know of a way for a firm to cripple competition to the scale of the state without the aid of a state, I'm all eyes.
Your second paragraph isn't actually an argument against me.
Capitalism simply means supply and demand in the private sector. So yes, it absolutely IS inherit and necessary. Even in the U.S.S.R., the economists would look to the U.S. (which was much more capitalistic) in order to figure out at which cost goods and services should be sold at.
You've yet to prove contracts or competent protection is predicated on the state, you've just asserted it.
Of course in order to conduct business you have to well, conduct business. If your the only one who can supply the demand because lets say you control all the mines a customer may want ore from, then there can be no competition to sell that ore. That is how a firm can cripple competition, or they own enough mines or refineries, or etc. that when ever a competitor does come up as a threat they use their economies of scale to under-sale the smaller competitor.
Yes it is, you said they would continue their proficient practices, when in reality they are more likely to take the more economical option and decrease R and D, marketing activities etc. Their proficient practices were based on there being competition, without it there is no need for them.
Google "define: capitalism"...
Contracts by definition require a government. It implies a third neutral party which agrees to institute force to ensure the contract is followed, this is implied in the contract. what ever organization which does this constitute a government by the social contract theory. A contract is a agreement between three or more parties or else it is meaningless and easily broken. "defend" means taking what your able to. Power is only given if it grants the giver more, otherwise it is taken. Property is power, it is taken, ie "claimed" and then "defended". A Democratic government must satisfy those who elect it to power, it will define property relations in a way which is more beneficial to society then what private entities would, who would define property "as the all that is theirs", and that would tend to be everything they could take. Their property would be limited only by what is out of reach, or what has many guns defending it. Much the same way nations treat each other's properties.
If the firm is still keeping its prices at competitive rates, then it makes no difference if it is a monopoly or not.
I said they had two options. Either continue their proficient practices, or not to (I.E. monopoly rates). If they keep their prices low, there is no problem. If they raise their prices then either new firms will pop up to take advantage of this climb in value or the firm will loose customers causing it to shrink which will open room for small firms anyway. It's a self-solving system.
Here's the wikipedian definition; Capitalism is an economic system in which the means of production are privately owned and operated for a private profit.
In other words, supply and demand in the private sector. ;)
Contracts DO NOT by definition require government. Perhaps you should google "define: contract". ;)
Contracts don't even require a third party. For example, I make a contract with you to to stop playing loud music late at night and in exchange I rake up my leaves so they don't blow over to your yard. If you play loud music, I don't rake. It's that simple.
Besides, free market courts work for Somalia and anarchic Ireland used free market courts for over 1000 years.
Even if a monopoly kept the same prices, there are things of importance beyond prices that are likely to change due to the presence of a monopoly. There would be less jobs, less duplication, less Research and development, less of a need to look great to your customers(less incentive for charitably and philanthropy), etc.
why/ how would a firm keep its prices at competitive rates if there is no competition, when by definition competitive prices are there because of competition? why/how would a firm with all the productive power for a in demand item centralized to them not push the limits of what they can charge if they can do so without threatening their position?
They have more then two options. There are ways to rig the system so that it doesn't self-solve as I have described.
"supply and demand in the private sector" is not Identical with " the means of production are privately owned and operated for a private profit".
How about I make a contract with you to let you use my truck if you let me use your boat, I use the boat first, then don't let you use the truck. But you need the truck and i'm the only one around with a truck or the particular truck you need so its not like you can just make a contract with a more trustworthy individual, or one that is dependent on you trusting them. The contract becomes meaningless for that situation because you will never use my truck. You can not enforce the contract. as for your example sure, in some situations a contract may never go into effect because a clause was broken before anything was really invested in it, in such situations it is still meaningless. Your example only serves to evidence my case. Or perhaps you can borrow somebody else's truck in my example, the contract is still unenforceable and you lost out. Sure you could act violently(perhaps unethically), or refuse to deal with me anymore, but that probably doesn't matter much to me if I was willing to abuse you. Without a third party there is nothing behind a contract but the two parties word, there is no security in it. It is common for people to deal with entities that have much more power over them, for example many people are dependent on a bank in order to get a loan. With out a third party the bank itself will have to forclose on people, which could turn messy or a malicious organization may mascaraed as a legitimate bank and once it gains enough deposits disappear. There would be no recourse and for major deals where life savings and such are on the line a shake of a hand is not good enough.
If a firm becomes a monopoly, it means it's cornered the market. If it is offering less jobs than would be available naturally, then there is room left on the market for other firms. Though, to maximize profits it's pretty safe to assume a monopolistic firm would open up as many stores as financially profitable.
Remember, without a state monopolies can only be non-coercive, which means that if anyone finds a better means to produce this monopolized good they can open up a firm, do so and make a killing.
Understand, in the end everything competes with everything else. If you monopolize hamburgers and enact monopoly rates then you're going to drive business away from hamburgers and towards, say, hot dogs. A monopoly doesn't mean much, this is why the state enacts several coercive monopolies.
Rigging the system would allow them to enact monopoly rates... which is one of the options I listed. =/
"supply and demand in the private sector" is not Identical with " the means of production are privately owned and operated for a private profit".
Yes, it is. Production infers a market, which IS supply and demand. Therefore private production IS supply and demand in the private sector. This is what capitalism is.
No it doesn't. the word government doesn't come up once in that article. Your assumption is that law is predicated on a state. It isn't.
contract scenario
Not true. I could always come over to your house and shoot you in the face, then take your truck. In fact, that could even be in the contract. "Any breach in this contract enacts the victim the legal right to shoot the offender and take his stuff". Problem solved. Before you say it, the state operates in the exact same way. The final punishment for defying the state is always death. The differences is with a free market you choose with contracts you sign. With a state, your name gets signed for you by the state, to the state.
The argument isn't against third parties, merely that they're not necessities.
2. They enact monopoly rates, driving away customers and propping up smaller firms which will under sell them. So, still no problem.
Your example posits an incumbent natural monopoly. How are smaller firms supposed to come into being in such a scenario?
And even if you can somehow conjure up this competitor, what's to keep the incumbent from temporarily selling at below market rates, just until the competitor goes out of business, as Standard Oil notoriously did?
Monopoly =/= sole firm of it's kind in the market. That would be a monopsony.
Never was standard oil a monopsony, there was always competition thus always need to keep their prices low, which is what happened since kerosene prices dropped from 58 to 26 cents from 1865 to 1870.
Yes, there can be some minor competition because perfect monopolies are pretty much only theoretical. But that doesn't change the fact that we end with a drastically inferior outcome then if we simply break up a monopoly to create a more competitive environment.
... that's what I'm saying. Standard oil resulted in a massive drop in price. =/
There's natural incentive to break up monopolies. If a monopoly enacts monopoly rates, it sends a signal to other possible firm owners that there is money to be made in the area of the market, thus new firms pop up and undersell the monopoly. If the monopoly firm doesn't enact monopoly rates, then it's no different then if it didn't have a monopoly at all.
You don't need a state to do this.
???? 1865-1870 was before Standard Oil existed.
I think you're misunderstanding what I'm saying. in 1865 kerosene was 58 cents. When Standard Oil came into the market in 1870, the price cut to less than half.
If a monopoly enacts monopoly rates, it sends a signal to other possible firm owners that there is money to be made in the area of the market, thus new firms pop up and undersell the monopoly.
That's my point exactly. States can enact barriers to entry thus crippling competition. Firms cannot do this on their own, otherwise they would, instead of appealing to the state.
Alright, I'm not going to get into democracy right now because that is a massive topic that deserves its own debate.
Barriers to entry is not illegal. In fact, it's just about the most legal thing. Barriers to entry is a description of laws enacted to cripple competition under the guise of supporting "fair play" on the market.
Barriers to entry is not illegal. In fact, it's just about the most legal thing.
That depends on the strength of the barrier. There's no black and white here. As the barriers get larger, competition shrinks. Intelligent judges must draw a line and say, "At this point it's too hard for competitors to compete."
Barriers to entry is a description of laws enacted to cripple competition under the guise of supporting "fair play" on the market.
Barriers to entry can come from more than just laws. It seems dishonest of you to ignore other sources.
That depends on the strength of the barrier. There's no black and white here. As the barriers get larger, competition shrinks. Intelligent judges must draw a line and say, "At this point it's too hard for competitors to compete."
If the line isn't decided naturally by the market, then it can only be arbitrary. I say, let limits emerge naturally. They do anyway.
Barriers to entry can come from more than just laws. It seems dishonest of you to ignore other sources.
Emergent barriers to entry are to a piss ant scale of state regulated barriers. They just aren't very statistically significant.
A problem with monopolies is that they own so much market share that they can literally "buy out" other businesses, and it may take time to find a true competitor, because prior wealth would be needed in this case because a monopoly can suffer heavy losses to shut out another competitor, predatory pricing.
Lets say that the internet was run as a monopoly, a single service provider. What then? What if electricity was the same?
Obviously patent barriers respect an individuals right to their own discovery for a certain amount of years, but after that, there is one significant natural barrier, like I said, startup costs.
