[ame=http://www.youtube.com/watch?v=eO8ZU7TeKPw&videos=1BhHnBPfT5k]YouTube - Evil Monopolies Are Fairy Tales In Free Markets[/ame]
[ame=http://www.youtube.com/watch?v=eO8ZU7TeKPw&videos=1BhHnBPfT5k]YouTube - Evil Monopolies Are Fairy Tales In Free Markets[/ame]
The problem is not the existence of monopolies, but the fact that the actions of their owners, with regards to what they do with their power, cannot be controlled, and that they will default to wringing every cent they can out of consumers, which is just bad for the greater populace. What if we let companies run wild, and one of them gets a monopoly on, say, water or electrical infrastructure? Everybody will always pay, and an unregulated monopoly will run people into the ground because they know their product is needed.
And yes, their are localized monopolies on such things today, but fortunately government is there to back us up to prevent them from abusing us completely. What would happen if they were allowed to run rampant? Simple fact of nature: predators eat their prey.
But, for a certainty, back then,
We loved so many, yet hated so much,
We hurt others and were hurt ourselves...
Yet even then, we ran like the wind,
Whilst our laughter echoed,
Under cerulean skies...
Did you watch the video? It explains how competition makes it impossible for monopolies to do what you're saying.
The kinds of monopolies you're talking about are called natural monopolies, and they only exist because government grants monopoly rights to cable companies, for example, under the mistaken belief that prices are cheaper in such industries under monopolistic conditions.And yes, their are localized monopolies on such things today, but fortunately government is there to back us up to prevent them from abusing us completely. What would happen if they were allowed to run rampant? Simple fact of nature: predators eat their prey.
Where in the video does it talk about that?
But, for a certainty, back then,
We loved so many, yet hated so much,
We hurt others and were hurt ourselves...
Yet even then, we ran like the wind,
Whilst our laughter echoed,
Under cerulean skies...
* The power grid and the railroads are natural monopolies*
Myths about Monopoly (board game):
-It has an end
-Normal people love it
-It enhances friendships
-It's funny
ILE "Searcher"
Socionics: ENTp
DCNH: Dominant --> perhaps Normalizing
Enneagram: 7w6 "Enthusiast"
MBTI: ENTJ "Field Marshall" or ENTP "Inventor"
Astrological sign: Aquarius
To learn, read. To know, write. To master, teach.
@ 4:15: yes, hopefully more responsible people would take over. Wishful fucking thinking. The stockholders will want to make money, so why wouldn't they invest in a company that is going to be raking in shitloads of money? Because we have faith in them to do the right thing? Get lost.
@ 8:10: it CAN happen without government assistance, if it's not a resource but rather a service.
But, for a certainty, back then,
We loved so many, yet hated so much,
We hurt others and were hurt ourselves...
Yet even then, we ran like the wind,
Whilst our laughter echoed,
Under cerulean skies...
The reason stock prices will plummet is because the monopoly's actions would create hugely negative publicity and people would stop buying for fear that the price would drop, which of course would be the cause of the resulting drop in price. Look at the stock for BP, which dropped after the oil leak but bounced when they got closer to plugging it.@ 4:15: yes, hopefully more responsible people would take over. Wishful fucking thinking. The stockholders will want to make money, so why wouldn't they invest in a company that is going to be raking in shitloads of money? Because we have faith in them to do the right thing? Get lost.
When has it happened?@ 8:10: it CAN happen without government assistance, if it's not a resource but rather a service.
People aren't going to stop buying electricity and water, or addictive drugs. Care to take a look at where the pharmaceutical industry is headed?
When has there ever been a completely free market? Of course there are no examples; the conditions have not been properly tested. Government deters such things, right now. But given humanity's natural tendencies, placing them under those circumstances is only asking for one thing; what are you relying on to stop greed from ruling people who devised government in the first place as a method of protecting themselves from others, and from each other? Honestly, people just aren't ready for that; we are not, as a society, in America or anywhere else in the world, socially conditioned thoroughly enough for such a society to function without risking exploitation on a grand scale.When has it happened?
How long does it take before a billionaire with control issues buys up all the power lines, all the grain silos, all the fiberoptic infrastructure? That's what I'm curious about.
But, for a certainty, back then,
We loved so many, yet hated so much,
We hurt others and were hurt ourselves...
Yet even then, we ran like the wind,
Whilst our laughter echoed,
Under cerulean skies...
People don't need to stop buying them for the stock prices to drop. All it takes is enough negative publicity.
That industry is heavily regulated by the government and is not a valid example.Care to take a look at where the pharmaceutical industry is headed?
Ok, I'm not really sure how any of that follows from the video or from what I've been saying. To answer your general point, the issue is not about finding some perfect policy in which there is no downside. It is about finding the policy (i.e. the free market) that maximizes societal net gains while minimizing societal net loses so that there is the greatest net gain. This is why the free market is always preferable to regulated economies even when you consider the theoretical--and largely negligible--risk of massive monopolistic greed.When has there ever been a completely free market? Of course there are no examples; the conditions have not been properly tested. Government deters such things, right now. But given humanity's natural tendencies, placing them under those circumstances is only asking for one thing; what are you relying on to stop greed from ruling people who devised government in the first place as a method of protecting themselves from others, and from each other? Honestly, people just aren't ready for that; we are not, as a society, in America or anywhere else in the world, socially conditioned thoroughly enough for such a society to function without risking exploitation on a grand scale.
When has anything like this ever happened and resulted in long-term societal loss?How long does it take before a billionaire with control issues buys up all the power lines, all the grain silos, all the fiberoptic infrastructure? That's what I'm curious about.
Last edited by discojoe; 07-27-2010 at 06:59 PM.
That video makes some really good points. But it's a little biased. He's ignoring some important history.
[ame=http://en.wikipedia.org/wiki/Sherman_Antitrust_Act]Sherman Antitrust Act - Wikipedia, the free encyclopedia[/ame]
From Wikipedia
I assume you're aware, but for those who don't have a knowledge of US history, companies had control of basic resources and made agreements with each other so that they all could raise prices for things that people needed. And the people weren't in a position to act against them with their own resources or financial backing. They had little choice but to buy from these companies.The law attempts to prevent the artificial raising of prices by restriction of trade or supply.[5] In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not. Put another way, it has sometimes been said that the purpose of the Sherman Act is not to protect competitors, but rather to protect competition and the competitive landscape. As explained by the U.S. Supreme Court in Spectrum Sports, Inc. v. McQuillan:
"The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself." [6]
Of course, you might argue that that means people should have boycotted or armed themselves and gone against the government(s) and businesses, but in this case they didn't and this was an attempt to help give society what it wants/needs and keep the current government and economy intact in the process. What is your stance on what role a government should have in a society, Discojoe? Assuming you believe in the idea of having a government to better society to begin with. I would like to hear your philosophy out of harmless curiousity, if you don't mind.
So there can only be monopolies if the monopolies also have good PR. What if the evil monopoly paid off the evil liberal media? I mean, evil liberal media, evil monopoly, makes sense...
Not a rule, just a trend.
IEI. Probably Fe subtype. Pretty sure I'm E4, sexual instinctual type, fairly confident that I'm a 3 wing now, so: IEI-Fe E4w3 sx/so. Considering 3w4 now, but pretty sure that 4 fits the best.
Yes 'a ma'am that's pretty music...
I am grateful for the mystery of the soul, because without it, there could be no contemplation, except of the mysteries of divinity, which are far more dangerous to get wrong.
You're saying that the Sherman Act was necessary to keep these supposedly malicious companies from colluding to raise prices. However, this clashes with my own understanding of the law, which is that it was put into place to raise prices so that smaller, less efficient industries could compete, which is actually counter-intuitive to free competition.
From the Cato Handbook for Congress Antitrust:
Raising prices so that less efficient companies can afford to compete amounts to redistribution of wealth, since you're effectively taking money that private consumers would be saving or spending on something else and giving it to people who had been producing goods at prices that consumers opted not to pay.Monopolies supposedly restrict output and raise prices. But the trusts that were accused of monopolizing their industries in the late 1880s had been, in fact, increasing their output several times faster than the overall economy had been growing during the decade preceding the passage of the Sherman Act. Also, during that deflationary period, those industries had been dropping their prices faster than the general price level had been dropping. That behavior is contrary to any definition of monopoly.
Members of Congress at that time clearly recognized those facts, but they wanted to pass a law that would protect less efficient and higher priced businesses. "Trusts have made products cheaper, have reduced prices,'' complained Rep. William Mason during the House debates over the Sherman Act. Low prices, he said, "would not right the wrong done to the people of this country by the `trusts' which have destroyed legitimate competition and driven honest men from legitimate business enterprises.''
So the Sherman Act wasn't actually necessary, since there were no actual evil monopolies to begin with.
How would the monopoly bribe the liberal media, Fox News, and every blogger in the world? What you're saying just isn't realistic.
The guy makes some pretty interesting points, but I have one question -- isn't the government basically a monopoly? Only it stamped out its only competition during the Revolutionary and Civil wars.
Why not just use a competition model to make it lose some of its monopolistic features?
I'm not saying it necessarily is realistic. But to be fair, they wouldn't have to bribe every single blogger by any means. You just said it had to cause a big enough stir to drop stock prices. I don't think you can create a big enough stir to drop stock prices in the blogosphere alone. Also, if people keep causing a big stink, and stock prices keep dropping, but revenue stays constant, aren't people eventually going to realize that the big stink isn't affecting the company's profitability?
That video was okay, but it really wasn't terribly well-argued. It never proved its central assertion, which the guy returned to over and over again, which is that as soon as the company raises prices, competition is going to come in and people will start buying from the cheaper guy. This is another version of the central assertion of economics "people behave rationally." But people don't behave rationally. In fact, the whole point of the multibillion dollar marketing industry is to get people to behave irrationally.
I've always said that regulation vs. free market comes down to who you trust more, the government or businesses. Businesses can be short-sighted or insulate themselves from risk (i.e., banks make money as long as money continues changing hands, regardless of whether the people they gave the money to made any money with that money, lol). Government officials can be bribed or simply be lazy precisely because they don't have competition. But that doesn't mean that every company is going to be short-sighted. AND it doesn't mean that every government official is going to be corrupt or lazy because of their lack of competition (in place of competition, a sense of public service a la George Washington serves as a nice motivator). I don't know which one I trust more, but I'm not a humongous fan of either. In theory, I have more control over the government, insofar as I have a vote, but really, when you think about it, having one vote is a lot like owning one share in a company as far as how much influence you have on government decisions. But at least there's (theoretical) socioeconomic parity when it comes to votes, whereas there is not when it comes to stocks, obviously.
Not a rule, just a trend.
IEI. Probably Fe subtype. Pretty sure I'm E4, sexual instinctual type, fairly confident that I'm a 3 wing now, so: IEI-Fe E4w3 sx/so. Considering 3w4 now, but pretty sure that 4 fits the best.
Yes 'a ma'am that's pretty music...
I am grateful for the mystery of the soul, because without it, there could be no contemplation, except of the mysteries of divinity, which are far more dangerous to get wrong.
Thanks, that's interesting. I'll have to look into that further out of curiosity.
Publicity won't do shit to their stocks if their product is irreplaceable.
Not a valid example because it's regulated by the government? That's my point, ditzyjoe. If it WEREN'T regulated by the government, they would wind up doing all sorts of ridiculous things to their drugs, making them addictive, all sorts of additives, ridiculously manipulative marketing campaigns, etc etc, just to get them sold. I'm sorry, but letting the chains loose on people who are only in it to make money is simply not a good idea, given the amount of power they stand to wield. I agree that the government should interfere less, but it's a necessary evil.That industry is heavily regulated by the government and is not a valid example.
How is it theoretical when we have laws designed as the result of attempts to embody it? How is it negligible when the stakes are as high as they are? You are an idealist.Ok, I'm not really sure how any of that follows from the video or from what I've been saying. To answer your general point, the issue is not about finding some perfect policy in which there is no downside. It is about finding the policy (i.e. the free market) that maximizes societal net gains while minimizing societal net loses so that there is the greatest net gain. This is why the free market is always preferable to regulated economies even when you consider the theoretical--and largely negligible--risk of massive monopolistic greed.
Maximizing generation of capital is great, but it shouldn't be the highest priority of society, the standard by which its efficacy is judged. The highest priority of society, is ensuring the continued existence of society and its moral structure that allows people to live together in relative safety (that being the evolutionary origin and projected goal of the concept of a society).
Do I have to repeat myself? It hasn't happened, because as long as there have been corporations with the potential to do such a thing, there has been government to stop them.When has anything like this ever happened and resulted in long-term societal loss?
But, for a certainty, back then,
We loved so many, yet hated so much,
We hurt others and were hurt ourselves...
Yet even then, we ran like the wind,
Whilst our laughter echoed,
Under cerulean skies...
But history shows that only the government can make a product irreplaceable. Monopolies only exist as a result of government action, so yes, when backed by the law, companies can charge whatever they want. Even in utilities markets, competition DOES take place, and lots of it at that. These monopolies you're talking about only exist because politicians bring in revenue from companies in exchange for monopoly rights.
Why wouldn't a competitor step in and reveal all the shady details about one particular medicine in order to win over the market? That's EXACTLY what would happen.Not a valid example because it's regulated by the government? That's my point, ditzyjoe. If it WEREN'T regulated by the government, they would wind up doing all sorts of ridiculous things to their drugs, making them addictive, all sorts of additives, ridiculously manipulative marketing campaigns, etc etc, just to get them sold. I'm sorry, but letting the chains loose on people who are only in it to make money is simply not a good idea, given the amount of power they stand to wield. I agree that the government should interfere less, but it's a necessary evil.
Also, the FDA, which you claim saves lives, actually kills far more people than it saves.
List one single example of companies successfully creating and sustaining monopolies without the help of government.How is it theoretical when we have laws designed as the result of attempts to embody it? How is it negligible when the stakes are as high as they are? You are an idealist.
The free market does this better. Maximizing capital output measurably leads to happier, healthier, safer citizenry. There is no evidence whatsoever that the government is needed to regulate economic behavior.Maximizing generation of capital is great, but it shouldn't be the highest priority of society, the standard by which its efficacy is judged. The highest priority of society, is ensuring the continued existence of society and its moral structure that allows people to live together in relative safety (that being the evolutionary origin and projected goal of the concept of a society).
Have some Ti: It is fundamentally illogical to say that measures you are taking are preventing something from occurring that has never been observed or proved.Do I have to repeat myself? It hasn't happened, because as long as there have been corporations with the potential to do such a thing, there has been government to stop them.
Discojoe, I think some of your points are based on the premise of a free and independent press that is capable of revealing facts and spreading negative publicity. From my experience in Eastern Europe I would say that it is not too difficult for press to be controlled by government and/or big business. Even in a relatively "free" society such as the USA, mass media cannot be relied upon to provide an accurate picture of reality, since they are guided by a money motive: whatever sells. Sometimes it's the truth that sells, sometimes it's half-truths and paranoia, sometimes patting people on the back and making them feel good.
You ask:
"Why wouldn't a competitor step in and reveal all the shady details about one particular medicine in order to win over the market? That's EXACTLY what would happen."
A competitor could just as easily step in and create an even more addictive product. Or, the first company could create a retaliatory smear campaign about the competitor who is attempting to reveal the shady details. Consumers who are unhealthy and addicted may not be inclined to pay much attention to facts and reason, anyways.
I agree that if there is an objective (i.e. scientific) and highly influential information network that has the resources to investigate everything happening in society, then your scenario works. However, many people are prone to superstitions and wishful thinking and can't distinguish an expert opinion from disinformation. Looking at U.S. mass media, of course it is better than Ukraine and some other countries, but I don't think it is facts-based enough and independent enough of big business to fulfill the role it needs to.
It is easier for the eye of a camel to pass through a rich man than for a needle to enter the kingdom of heaven.
Well, creating an addictive product is very probably illegal. So, it's not a question of "who would win the market" whenever there's an illegal practice at play, because the rules of the game called "competition" aren't being respected (namely, one specific rule: transparency). So, even if a given person thinks that bad monopolies will be automatically ruled out by competition, he doesn't need to find a justification as to why such a behavior might persist: it's simply "against the rules".
Obsequium amicos, veritas odium parit
I think technology, and technological progress are addictive products, to the social organism itself. Increased standards of living and improved mode of production has a irrevocable effect on the psychology of the following generations.
Competition is very important to society as it allows for stagnate areas of society to be identified and culled. Socialist and capitalistic thought are both competitive ideologies and I think the existence of that competition is more important then the ideology themselves.
There are a few ways to improve society.
One is continuous improvement of the mode of production and distribution of those products.
I actually have no problem with smaller government or reducing some regulations on economic activity, but often the advocacy of the these forms of rhetoric leads to government subsidized robber barons.
Thins like lower taxes on the rich, elimination of the estate tax for a year, and general benefits to the owning class has been the result of the small government movement.
Big companies and the wealthy have a lot easier time dealing with complex regulation with their army of lawyers and accountants. Unfortunately some poor deluded people don't even realize that the party they support for smaller government have no interest or competence in creating smaller government, and others simply back fringe candidates running with cynicism and ressentiment towards various groups on personal dislike, such as immigrants, differing races, gays, muslims, etc.
Increasing disparity of wealth is the original form of anti-competitive stagnation.
There are complaints about high taxes on the rich will only result in more expensive goods for the consumers. The point isn't pricing, but to keep money moving, money has to move, exchange has to occur, debt has to be paid, otherwise you have fiscal paralysis.
I'm not a economist or anything, but this is what I see happening in the US right now.
But rules immediately imply some level of government intervention. If we're just asking "can you create a monopoly" this is irrelevant, but if we're addressing the question of free market vs. regulation in general, that's worth noting. But I still don't have a solid opinion on the subject.
Not a rule, just a trend.
IEI. Probably Fe subtype. Pretty sure I'm E4, sexual instinctual type, fairly confident that I'm a 3 wing now, so: IEI-Fe E4w3 sx/so. Considering 3w4 now, but pretty sure that 4 fits the best.
Yes 'a ma'am that's pretty music...
I am grateful for the mystery of the soul, because without it, there could be no contemplation, except of the mysteries of divinity, which are far more dangerous to get wrong.
This is a problem with the government having a monopoly on the use of force.I actually have no problem with smaller government or reducing some regulations on economic activity, but often the advocacy of the these forms of rhetoric leads to government subsidized robber barons.
Thins like lower taxes on the rich, elimination of the estate tax for a year, and general benefits to the owning class has been the result of the small government movement.
Big companies and the wealthy have a lot easier time dealing with complex regulation with their army of lawyers and accountants. Unfortunately some poor deluded people don't even realize that the party they support for smaller government have no interest or competence in creating smaller government, and others simply back fringe candidates running with cynicism and ressentiment towards various groups on personal dislike, such as immigrants, differing races, gays, muslims, etc.
I have never heard a small government advocate say that the government should permit companies to lie in advertisements.A competitor could just as easily step in and create an even more addictive product. Or, the first company could create a retaliatory smear campaign about the competitor who is attempting to reveal the shady details. Consumers who are unhealthy and addicted may not be inclined to pay much attention to facts and reason, anyways.
I have heard several free marketers express that there are 3 things that should not be run on a capitalistic model, military, prisons, and the press.I agree that if there is an objective (i.e. scientific) and highly influential information network that has the resources to investigate everything happening in society, then your scenario works. However, many people are prone to superstitions and wishful thinking and can't distinguish an expert opinion from disinformation. Looking at U.S. mass media, of course it is better than Ukraine and some other countries, but I don't think it is facts-based enough and independent enough of big business to fulfill the role it needs to.
Products are only irreplaceable if humans need it to live, the government mandates it, or it is addictive.Publicity won't do shit to their stocks if their product is irreplaceable.
As long as it has not bought the government.Do I have to repeat myself? It hasn't happened, because as long as there have been corporations with the potential to do such a thing, there has been government to stop them.
We did have this in the US prior to the passage of the 17th Amendment.Why not just use a competition model to make it lose some of its monopolistic features?
It has a monopoly on the use of force. This gives it the ability to break into your house drag you out of it in the middle of the night, throw you in prison and keep you there for as long as it so chooses without breaking the law, because the government itself determines the law.The guy makes some pretty interesting points, but I have one question -- isn't the government basically a monopoly? Only it stamped out its only competition during the Revolutionary and Civil wars.
How long does it take for a revolutionary with control issues to takeover a government and then take over the grain silos to feed an army that will beat the populace into submission?How long does it take before a billionaire with control issues buys up all the power lines, all the grain silos, all the fiberoptic infrastructure? That's what I'm curious about.
Last edited by smilodon; 08-02-2010 at 10:11 PM.
LIE-Ni, i think, but maybe ILI
Representative governments today have a monopoly on the legitimate use of force.
Private companies and individuals also can use force, but they must be legitimized by the government.
A government without a monopoly on the user of force is non-functioning, because then there is a revolution going on.
I have no problem of revolution, it's pretty much inevitable, I just think most people fail at it due to incompetence.
Please, tell me exactly what you mean by "accurate picture of reality" and how the government can provide an "accurate picture of reality" that the free press cannot.
Why would a company risk devastating media exposure by responding to competitors with further corruption when they could simply expose the competition and take their share of the market?You ask:
"Why wouldn't a competitor step in and reveal all the shady details about one particular medicine in order to win over the market? That's EXACTLY what would happen."
A competitor could just as easily step in and create an even more addictive product. Or, the first company could create a retaliatory smear campaign about the competitor who is attempting to reveal the shady details. Consumers who are unhealthy and addicted may not be inclined to pay much attention to facts and reason, anyways.
Right, so it's better to have a big bureaucratic monopoly control everyone's lives.I agree that if there is an objective (i.e. scientific) and highly influential information network that has the resources to investigate everything happening in society, then your scenario works. However, many people are prone to superstitions and wishful thinking and can't distinguish an expert opinion from disinformation. Looking at U.S. mass media, of course it is better than Ukraine and some other countries, but I don't think it is facts-based enough and independent enough of big business to fulfill the role it needs to.
Lumping me into the "big government liberal crowd" again?
"Accurate picture of reality" = reasonably close to scientifically provable fact.
The government, IMO, is probably even less likely to provide an "accurate picture of reality" than the free press. They have more to lose than the press.
Science does not equal government. Science as an institution is the best institutional source of scientifically provable facts available, regardless of the political system of the country you are in. For instance, even in a totalitarian regime such as the Soviet Union, there was a lot more scientifically provable fact in the scientific community than in society at large. Same goes for the U.S., even though scientists receive government grants. For instance, elected politicians in the U.S. for the most part ignore environmental threats described clearly by scientists, even as government bodies fund the research that produces the results the politicians ignore. It's one of the many paradoxes of government.
Because if there is no free press in place, telling the truth doesn't work. There are hundreds of dirty secrets out there that aren't getting the press they should either because press outlets aren't interested in printing it, people don't care to hear it, or because there is no free press to publish it in the first place.
Who do you think I am, a communist? I am just pointing out that your arguments are based on the presumption of an independent, objective press and that this presumption is naive.
It is easier for the eye of a camel to pass through a rich man than for a needle to enter the kingdom of heaven.
this is what is great about the internet!
"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
--Theodore Roosevelt
"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
-- Mark Twain
"Man who stand on hill with mouth open will wait long time for roast duck to drop in."
-- Confucius