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Laissez faire economy
Interesting discussion I got into today
Say we lived in a Laissez faire economy, and all competition was gone due to Walmart taking over and selling literally everything (including oil). Would a company this large be able to afford to exploit and underpay its workers? Would the workers have a way of beating the business economically?
Well, I'm not entirely sure at the moment, but I'm pretty sure that Wal-mart would not be able to start up a monopoly if the people don't like it - they can simply stop buying from them.
Well, I'm not entirely sure at the moment, but I'm pretty sure that Wal-mart would not be able to start up a monopoly if the people don't like it - they can simply stop buying from them.
Better look up what a monopoly is. You can't simply stop buying from a monopoly because they are the sole provider of a good you need.
Everyone knows what a monopoly is. You are right when you can't stop buying from them, but you can always buy less of the product which would damage the company.
You are forgetting the most important essense of a truly growing economy, invention, innovation and productivity.
This argument is always poised as though all of these issues are stagnant. Nothing could be further from the truth.
Someone will have an innovation, idea for improved productivity or invention that they will utimately use against their competitors. That is why a monopoly, unassisted by gov reg (licensing, wage controls, etc) rarely lasts very long. At some point someone will out think them. Until then it is always in the advantage of the overall consumer.
If we lived in a truly Laissez-faire society, I highly doubt Wal-Mart would have no competitors. The people would just stop buying their products. And Wal-Mart would have to abdicate.
Sorry, but that's just dumb. Without government intervention, the biggest company can easily become a monopoly.
Their economy of scale would allow them to price goods at levels others couldn't compete with. They could buy out their rivals. People would be forced to buy from them if there was no one else to buy from.
Just because they have a monopoly doesn't mean we have to buy from them.
If Walmart had a monopoly on food, I can still grow some at home. Also wouldn't the economy of scale benefit the consumer as the goods would be cheaper?
The goods would cost as much as Wal-Mart would want them to cost. Without any competition, they can set the price for anything they sell to anything they want. That'd be one of the problems with a Laissez faire economy. Price fixing, I mean.
I imagine that Wal-Mart could drive their prices down dirt cheap in order to screw over everyone else and then hike them back up once their competition was eliminated.
All the company can do is supply the demand. If there is a huge demand for oil, and Wal-mart has it all, eliminates all competition and then raises the price to ridiculous levels, then people simply won't buy from them. If people don't by from them they will be forced to lower their prices.
The act of not buying would cripple the entire economy, walmart would raise it to the maximum price that doesn't allow for the destroying of the very economy they would feed off of. People would buy from them and pay very high prices, they would have to or suffer lose.
But in a laissez-faire economy competition can arise. Therefore Wal mart would have to slash prices to nip them in the bud, therefore their prices would drop.
But in a laissez-faire economy competition can arise. Therefore Wal mart would have to slash prices to nip them in the bud, therefore their prices would drop.
Economy of scale means that a wall-mart would have a major advantage against any new competitors, through distribution channels, labour, delivery, etc.
Also, in a monopoly you cannot simply stop buying. That's the point. A monopoly controls the trade of a good or service. Let's use oil as an example. Oil is controlled by a handful of wealthy businesses, who fix the price to maximise profit on their end. We cannot simply stop buying from them because everything we use costs in oil.
In a laissez-faire economy it's impossible to get to a coercive monopoly but in this case, you can't stop buying oil completely in order to damage Wal mart.
Grow your own food. Yeah right. Like anybody has time for that. And what happens when there's a drought or hurricane or something? Guess you gotta go crawling back to Wal-Mart then, huh?
The goods would be cheaper initially, but after they eliminated the competition they could charge whatever they wanted.
And when people can't afford them they won't buy them and the price will drop. A monopoly cannot exist forever. Furthermore no monopoly has ever risen up naturally.
Say I've got all the food in the world. Say you're starving. I can charge you $100 for a loaf of bread and you'll find a way to afford it.
Furthermore no monopoly has ever risen up naturally.
Whaaat? Examples abound. US Steel, Standard Oil, Microsoft, etc. Regardless of whether a theoretically perfect monopoly has ever existed, the point is that laissez-fair leads to reduced competition which is bad for everybody.
"The evidence is, in fact, absolutely conclusive that the Standard Oil Company charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor, whose costs are ordinarily somewhat higher."
I can't believe you're seriously arguing that monopolies are good. If you check the debate record I never said that monopolies are good, I was just doubting their abillity to exist for extended periods of time or at all.
Just because it's a Laissez-faire economy that doesn't mean that we would have a monopoly. The only way to start a monopoly is by purchasing a lot of goods from one place and none from another. If the people don't want a monopoly, then they just don't buy from the company that they believe is taking over.
Free markets create broad prosperity. Capitalism creates a rapid and dramatic improvement in the human condition, and the masses are raised out of poverty.
It is no coincidence that the top 3 free economies have average wages that are 1132.55% higher than the bottom 3 least free economies.
