4 ms·

> A free and fair market is not bad per se… Such a market is not obvious to set up. Take the internet for instance. There are several ways to get a free market

> A free and fair market is not bad per se… Such a market is not obvious to set up. Take the internet for instance. There are several ways to get a free markets, some of which lead to healthy competition between many many providers, and some of which lead to near-monopoly. Basically, it all starts at the handling of the last mile. There are many last miles to cover, and it doesn't make technical sense to duplicate them. So, one solution is have the state build the lines, then lease them to providers at regulated rates that allow small providers (10-100 subscribers) to use them at rates no worse than the big boys. That solution tends to lead to the "free and fair" market you seek. Another solution would be to minimise state intervention (because "free market"), and thus let providers build their own last miles —and lease them if they want to. The result? A local monopoly at worst, and an oligopoly at best. Free markets require a proper set-up. That means prior intervention —by the state if need be.

TeMPOraL 11y ago
"Free market" is a really complex idea and as such I think it requires dynamic maintenance, not just a good set up (compare: open and closed systems in control theory). So in this case, solution #2, so it happened that because of people shouting "free market!" we have last-mile lines owned by companies and a bad oligopoly has appeared. The solution should be to adjust - the government should come and say, "thank you for all your service, but the balance of force needs to be restored", take over the line and put everyone in order. Yes, there are (recursive) problems with that particular solution, but still, if we want to implement a perfect theoretical "free market", we need to embrace the constant adjustments that are required to keep it.
lkjhgfd 11y ago
>Another solution would be to minimise state intervention (because "free market"), and thus let providers build their own last miles —and lease them if they want to. The result? A local monopoly at worst, and an oligopoly at best. Is there actually any evidence of this? Here in the US, we often have on cable company providing cable internet, plus another company offering DSL (high speed land phone line) internet, several offering cell mobile internet (4G & HSPA+), plus satellite internet (not great, but it's there).
- loup-vaillant 11y ago
  That is an oligopoly: You only have 2 high bandwidth providers. The wireless offering do not count. Satellite is too slow, and virtually all 4G offering are not even internet connections: they don't give you a public IP. Your very situation is evidence of what I am saying. (Also note that you have one company on the cable, and one company on the DSL. Only one per physical line. Here in France, we at least have 4 big players in the DSL alone, and a number of very small ISPs that nobody knows.)
timtas 11y ago
This oft told story is pretty clearly by now a myth: https://mises.org/library/myth-natural-monopoly https://mises.org/library/myth-natural-monopoly Any day now, Google will knock on my door to install Google Fiber in my house. Funny how for 10 years I had the same Time Warner Cable modem, and they recently sent me a new much faster one. Funny how, AT&T trucks are suddenly appearing around my 'hood to upgrade their plant so they can offer higher speeds. As a result my service will be better, faster and cheaper. This is not supposed to be possible.
- loup-vaillant 11y ago
  > Any day now, Google will knock on my door Yeah, Google. Not a smaller, local company. Sure, it's not a monopoly. But when only big players (like Google) end up servicing you, that's effectively an oligopoly, which is far from ideal. Maybe there is no natural monopoly here. But there is a natural "only huge corporations may ever enter here". That's nearly as bad.
  - timtas 11y ago
    I disagree. I've seen firsthand the huge investment it takes to wire a neighborhood with underground fiber. A small company cannot do it. Okay, so what? Google is offering free internet forever for a one time $300 construction fee which you can pay off over the course of a year. I'm buying gigabit plus premium TV package, 2TB 8-tuner DVR, etc, and my costs will be halved for a massively better product. If this is oligopoly, bring it on. With state created monopolies, prices rise and quality stagnates or falls. I don't know anyone who would dispute that. But these so-called oligopolies constantly innovate and drive prices down and quality up. Apple is part of an oligopoly as are many other darling tech companies. The constantly innovate and drop prices. Even in the days of the so-called robber barons it was so. Standard Oil controlled 90% of the oil market for about 10 years, during which time the price of a barrel of kerosene fell something like 300%. [1] [1] http://tomwoods.com/blog/beware-the-robber-barons-and-more-tales-of-capitalism/ http://tomwoods.com/blog/beware-the-robber-barons-and-more-t...
    - loup-vaillant 11y ago

TeMPOraL 11y ago

"Free market" is a really complex idea and as such I think it requires dynamic maintenance, not just a good set up (compare: open and closed systems in control theory). So in this case, solution #2, so it happened that because of people shouting "free market!" we have last-mile lines owned by companies and a bad oligopoly has appeared. The solution should be to adjust - the government should come and say, "thank you for all your service, but the balance of force needs to be restored", take over the line and put everyone in order. Yes, there are (recursive) problems with that particular solution, but still, if we want to implement a perfect theoretical "free market", we need to embrace the constant adjustments that are required to keep it.

lkjhgfd 11y ago

>Another solution would be to minimise state intervention (because "free market"), and thus let providers build their own last miles —and lease them if they want to. The result? A local monopoly at worst, and an oligopoly at best. Is there actually any evidence of this? Here in the US, we often have on cable company providing cable internet, plus another company offering DSL (high speed land phone line) internet, several offering cell mobile internet (4G & HSPA+), plus satellite internet (not great, but it's there).

loup-vaillant 11y ago
That is an oligopoly: You only have 2 high bandwidth providers. The wireless offering do not count. Satellite is too slow, and virtually all 4G offering are not even internet connections: they don't give you a public IP. Your very situation is evidence of what I am saying. (Also note that you have one company on the cable, and one company on the DSL. Only one per physical line. Here in France, we at least have 4 big players in the DSL alone, and a number of very small ISPs that nobody knows.)

timtas 11y ago

This oft told story is pretty clearly by now a myth: https://mises.org/library/myth-natural-monopoly https://mises.org/library/myth-natural-monopoly Any day now, Google will knock on my door to install Google Fiber in my house. Funny how for 10 years I had the same Time Warner Cable modem, and they recently sent me a new much faster one. Funny how, AT&T trucks are suddenly appearing around my 'hood to upgrade their plant so they can offer higher speeds. As a result my service will be better, faster and cheaper. This is not supposed to be possible.

loup-vaillant 11y ago
> Any day now, Google will knock on my door Yeah, Google. Not a smaller, local company. Sure, it's not a monopoly. But when only big players (like Google) end up servicing you, that's effectively an oligopoly, which is far from ideal. Maybe there is no natural monopoly here. But there is a natural "only huge corporations may ever enter here". That's nearly as bad.
- timtas 11y ago
  I disagree. I've seen firsthand the huge investment it takes to wire a neighborhood with underground fiber. A small company cannot do it. Okay, so what? Google is offering free internet forever for a one time $300 construction fee which you can pay off over the course of a year. I'm buying gigabit plus premium TV package, 2TB 8-tuner DVR, etc, and my costs will be halved for a massively better product. If this is oligopoly, bring it on. With state created monopolies, prices rise and quality stagnates or falls. I don't know anyone who would dispute that. But these so-called oligopolies constantly innovate and drive prices down and quality up. Apple is part of an oligopoly as are many other darling tech companies. The constantly innovate and drop prices. Even in the days of the so-called robber barons it was so. Standard Oil controlled 90% of the oil market for about 10 years, during which time the price of a barrel of kerosene fell something like 300%. [1] [1] http://tomwoods.com/blog/beware-the-robber-barons-and-more-tales-of-capitalism/ http://tomwoods.com/blog/beware-the-robber-barons-and-more-t...
  - loup-vaillant 11y ago