4 ms·

why? it's the ideal state in capitalism for the single market player. it's just the extreme version of unfair market adv and most will anyhow not succeed getti

• calpaterson 11y ago
  The ideal state in capitalism is for businesses to be interchangable and suffer perfect competition in order to maximise the consumer surplus. This is different from the ideal state for capitalists, who obviously want a monopoly.
  • beat 11y ago
    As Peter Thiel observed, in the "ideal state" of capitalism, profit is impossible. Perfect competition drives profits to zero. All profit in capitalist systems results from various forms of friction - imperfections in "perfect competition". Barriers to entry are an imperfection. We're not in the startup world out of an ideological obsession with the perfectly spherical cows of economic fantasy. We're here to make money (among other things). We are trying to build high-growth sustainable business models. That means high profits, much higher than can be achieved in highly competitive industries. Perhaps we shouldn't be saying "monopoly" so much as high demand, low competition, high barrier to entry.
    • omalleyt 11y ago
      It's not that in perfect competition profit is impossible, it's that in perfect competition the rate of return of capital invested would equal the risk free rate + what are you compensated for the risk you are taking on. You wouldn't see the excess returns that come from rent-seeking behaviors
  • andreasklinger 11y ago
    this is only true if the market is fluid and market players have comparable powers/options - but it's not the goal of the players themselves