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>When a market is defined by mutually beneficial trade between consenting individuals coupled with free competition, how can exploitation arise in liquid market

>When a market is defined by mutually beneficial trade between consenting individuals coupled with free competition, how can exploitation arise in liquid markets? Because as soon as there is a power imbalance, such as one person owning a factory and another's primary skill being working in such a factory, the mutually beneficial arrangements will nonetheless tend to benefit the one with power more than the one without. And over time these imbalances can amplify such that the wealthy capture more and more of the wealth they create. >A large part of libertarian theory is that monopolies arise due to state intervention in the market Some do, but I think natural monopolies can also exist, due to inherent barriers to entry in some industries. Things like natural resources, incumbent infrastructure, and network effects.

beaconstudios 10y ago
> the mutually beneficial arrangements will nonetheless tend to benefit the one with power more than the one without. I've seen this argued before, primarily in the Marxist analysis of the relationship between employer and employee (or capitalist and worker). I can see how this relationship could be exploitative given one employer, but in a liquid market where companies are competing for employees in the job market, the capitalist perspective would be that companies that offer a more enticing employment package (better benefits, wage etc) would naturally have an easier time hiring and would thus be able to grow faster, out-competing companies with poor offerings. I've not seen a good counter-argument to this. Also, the idea of wealth capture going to the capitalist kind of makes sense in that part of the implicit exchange between employee and employer is one of income stability: the employer agrees to pay a set rate no matter how much value the employee is generating, and in exchange they absorb risks around market fluctuation, unemployment (which is a real risk for higher-value-capture individuals like contractors) and devaluation. At-will employment seems to mess with that arrangement in the US but here in the UK it seems like a fair trade. If one wants to capture a larger share of their value then one must go freelance/contract (or start a business) and accept the risks that come with those types of work arrangement. > Some do, but I think natural monopolies can also exist, due to inherent barriers to entry in some industries. Things like natural resources, incumbent infrastructure, and network effects. Natural resource monopolies don't seem to really exist (all natural resources are heavily competitive and end up being commoditised) and infrastructure such as water can be competed on (both directly as in a second water plant, and indirectly as in building home water tanks). As for network effects, there comes a point where pain from monopolistic exploitation outweighs the marginal utility of the product. If facebook started charging money, for example, people would leave in droves. Government doesn't really solve any of these issues itself and instead acts as one big monopoly that increases prices not through profiteering but through inefficiency, politics and bureaucracy. Libertarianism certainly has its faults but when weighed up against statism it doesn't seem any worse even in its failings.
- deleted 10y ago
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- aninhumer 10y ago
  >the capitalist perspective would be that companies that offer a more enticing employment package would naturally have an easier time hiring This assumes that hiring costs are significant relative to wages, which is rarely the case. >At-will employment seems to mess with that arrangement in the US but here in the UK it seems like a fair trade. The notable difference being the state regulation in the UK which requires employers to provide that stability. And even that is eroding with the rise of zero-hour contracts. >infrastructure such as water can be competed on (both directly as in a second water plant, and indirectly as in building home water tanks) A second water plant isn't competition for the infrastructure, just the purification process. The water still has to get to your house, and the company which has already built a pipe is at a huge advantage compared to one that hasn't. >As for network effects, there comes a point where pain from monopolistic exploitation outweighs the marginal utility of the product. It's certainly possible for monopolists to push things too far and end up vulnerable to a market entrant, but the result of this is a brief period of competition followed by the winner returning to monopolistic behaviour. And the entry cost of this kind of disruption is sufficient that it happens very infrequently.

beaconstudios 10y ago

> the mutually beneficial arrangements will nonetheless tend to benefit the one with power more than the one without. I've seen this argued before, primarily in the Marxist analysis of the relationship between employer and employee (or capitalist and worker). I can see how this relationship could be exploitative given one employer, but in a liquid market where companies are competing for employees in the job market, the capitalist perspective would be that companies that offer a more enticing employment package (better benefits, wage etc) would naturally have an easier time hiring and would thus be able to grow faster, out-competing companies with poor offerings. I've not seen a good counter-argument to this. Also, the idea of wealth capture going to the capitalist kind of makes sense in that part of the implicit exchange between employee and employer is one of income stability: the employer agrees to pay a set rate no matter how much value the employee is generating, and in exchange they absorb risks around market fluctuation, unemployment (which is a real risk for higher-value-capture individuals like contractors) and devaluation. At-will employment seems to mess with that arrangement in the US but here in the UK it seems like a fair trade. If one wants to capture a larger share of their value then one must go freelance/contract (or start a business) and accept the risks that come with those types of work arrangement. > Some do, but I think natural monopolies can also exist, due to inherent barriers to entry in some industries. Things like natural resources, incumbent infrastructure, and network effects. Natural resource monopolies don't seem to really exist (all natural resources are heavily competitive and end up being commoditised) and infrastructure such as water can be competed on (both directly as in a second water plant, and indirectly as in building home water tanks). As for network effects, there comes a point where pain from monopolistic exploitation outweighs the marginal utility of the product. If facebook started charging money, for example, people would leave in droves. Government doesn't really solve any of these issues itself and instead acts as one big monopoly that increases prices not through profiteering but through inefficiency, politics and bureaucracy. Libertarianism certainly has its faults but when weighed up against statism it doesn't seem any worse even in its failings.

deleted 10y ago
[deleted]
aninhumer 10y ago
>the capitalist perspective would be that companies that offer a more enticing employment package would naturally have an easier time hiring This assumes that hiring costs are significant relative to wages, which is rarely the case. >At-will employment seems to mess with that arrangement in the US but here in the UK it seems like a fair trade. The notable difference being the state regulation in the UK which requires employers to provide that stability. And even that is eroding with the rise of zero-hour contracts. >infrastructure such as water can be competed on (both directly as in a second water plant, and indirectly as in building home water tanks) A second water plant isn't competition for the infrastructure, just the purification process. The water still has to get to your house, and the company which has already built a pipe is at a huge advantage compared to one that hasn't. >As for network effects, there comes a point where pain from monopolistic exploitation outweighs the marginal utility of the product. It's certainly possible for monopolists to push things too far and end up vulnerable to a market entrant, but the result of this is a brief period of competition followed by the winner returning to monopolistic behaviour. And the entry cost of this kind of disruption is sufficient that it happens very infrequently.