6 ms·

> That's the thing though, that is exactly what a late stage "free market" looks like. How would you know? We haven't had anything approaching a free market si

by wyager 10y ago

> That's the thing though, that is exactly what a late stage "free market" looks like. How would you know? We haven't had anything approaching a free market since the early 20th century, even if we ignore government-granted monopolies via restricted land grants and patents.

skummetmaelk 10y ago
At least to me it looks like making the market more "free" by means of deregulation would only exacerbate the problems mentioned above.
- arca_vorago 10y ago
  Free market != deregulation
  - bobwaycott 10y ago
    Sadly, it often does in the realm of public discourse as directed by politicians and the average voter who engages.
- sova 10y ago
  Making the market "monopoly and oligopoly free" by regulation, as a synopsis.
mikeyouse 10y ago
This is exactly the same argument people make in favor of socialism..
- wyager 10y ago
  The thing is, societies that were close to ideal free market capitalism have done extremely well, whereas societies that were close to ideal socialism have generally done very poorly (in the long term). On account of local linearity, I think it's probably OK to use societies that were almost like what is proposed to judge the proposal. The US isn't even close to a free market (although it used to be very close), so I don't think the current performance of the US economy is a reasonable basis on which to judge free markets. Similarly, many people used countries that were barely socialist to judge socialism, which is also a bad idea.
  - michaelmrose 10y ago
    When has a close to ideal free market existed?
socialist_coder 10y ago
How would you know? Just because it's never been truly tested in reality doesn't mean we can't stop and think about the situation. We know what corporations do when they are given a choice (they choose profits over anything else) and we know that consumers will choose low prices over everything else as well. So, it's not hard to draw the conclusion that this will result in consolidation, economies of scale, and eventually monopolies. Exactly what is already happening. In a "free market", what is going to prevent this? Every actor here is acting in their best interest. What could possibly change their behavior other than the government telling them to?
- valuearb 10y ago
  Where has economies of scale hurt? ISPs are a special case because regulations make it difficult or impossible for competitors to run cable. But economies of scale turned cars, PCs, consumer electronics, air travel, etc, from rich peoples play toys into affordable products for the masses. As consolidation hit all those industries their products merely got cheaper and in most cases, far better.
  - arrosenberg 10y ago
    Walmart. Walmart has destroyed thousands of businesses. Now you can argue the consumer got lower prices, but low prices don't matter when no one has money to afford them. Additionally, those economies of scale produced cheap, disposable, polluting goods that have an engineered lifetime so that customers have to keep buying the same appliance (or whatever) over and over. The question isn't when economies of scale hurt, that's a loaded question. The question is "when does consolidation no longer benefit the consumer?". I would argue many, many industries have reached this point, with ISPs being the most obvious one, but there are many examples (like the syringe one given above) where a business you've never heard of silently corners the market through consolidation and trust building.
    - valuearb 10y ago
      Walmart has been a huge boon to the middle class. It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. You can argue that Walmart hurt the standard of living of the Americans (less than 1% of US employees) who actually work for it. But that ignores the fact that the smaller competitors didn't pay much better, and never had a stock option plan, so the pay difference was marginal while the customer benefit was massive. Walmart big advantage wasn't labor costs, it was scale and inventory management from day one. And it's products are as good or better as the competitors. I hate Walmart, hate shopping there, but when I have to I'm always struck by how good the products are and how amazing the prices are.
goatlover 10y ago
There were powerful monopolies in the late 19th and early 20th century like U.S. Steel and Standard Oil that the government broke up.
- valuearb 10y ago
  Always found it interesting that the middle class in the US grew immensely wealthier during the period US Steel and Standard Oil were "monopolies".
  - arrosenberg 10y ago
    How do you figure? Most historians credit the rise of the middle class to the post-war boom in the 50s. Standard Oil and US Steel were broken up during the Roosevelt and Taft administrations in the early 20th century.
    - valuearb 10y ago
      When JD Rockefeller was growing up, the average American rode a horse (if lucky), never traveled more than a few miles from home, few had even been on a train. Sailing ships were the main and dangerous form of sea transport. 95% of Americans worked brutal farm labor jobs. Homes were lit by candle and whale oil, and heated with firewood. By the time Standard Oil was broken up, railroads were everywhere, steel ships ruled the sea, cars roamed the roads. Homes were lit by electricity. Energy consumption had skyrocketed because the costs (esp. the cost of oil) had plummeted. Labor saving devices increased productivity and the standard of living, and were made possible by cheaper steel as well as cheaper energy.
      - antod 10y ago
        And the same thing happened in other countries without Standard Oil and US Steel monopolies.
      - code_duck 10y ago
        That's great, but I don't see why you credit that to those companies being monopolies. There's no reason to think these positive things wouldn't have occurred for consumers just the same if there was more healthy competition in the steel and petroleum market. That just happens to be the technological change that was sweeping the world at the time. It reminds me of Microsoft receiving credit for computers becoming pervasive and useful in everyday life, as if they deserve special recognition, or thanks, for brutally clawing their way to the top of a very profitable industry and ruthlessly suppressing competition, even when it meant scuttling superior technology. Clearly someone else would have made an OS for home and small business computing if Microsoft didn't.
coldtea 10y ago
>How would you know? We haven't had anything approaching a free market since the early 20th century We know exactly because of that. That there's the theoretical free market and the "really existing" one, and the really existing one is exactly what we get in practice if the big players get their way.
tim333 10y ago
>We haven't had anything approaching a free market since the early 20th century Hong Kong is often held up as a fairly free market that has worked well. The government does get involved in health care and the like but commerce is pretty free. http://www.cnbc.com/2016/02/01/hong-kong-is-worlds-freest-economy-us-slips-on-freedom-rank.html http://www.cnbc.com/2016/02/01/hong-kong-is-worlds-freest-ec...

by wyager 10y ago

skummetmaelk 10y ago

At least to me it looks like making the market more "free" by means of deregulation would only exacerbate the problems mentioned above.

arca_vorago 10y ago
Free market != deregulation
- bobwaycott 10y ago
  Sadly, it often does in the realm of public discourse as directed by politicians and the average voter who engages.
sova 10y ago
Making the market "monopoly and oligopoly free" by regulation, as a synopsis.

mikeyouse 10y ago

This is exactly the same argument people make in favor of socialism..

wyager 10y ago
The thing is, societies that were close to ideal free market capitalism have done extremely well, whereas societies that were close to ideal socialism have generally done very poorly (in the long term). On account of local linearity, I think it's probably OK to use societies that were almost like what is proposed to judge the proposal. The US isn't even close to a free market (although it used to be very close), so I don't think the current performance of the US economy is a reasonable basis on which to judge free markets. Similarly, many people used countries that were barely socialist to judge socialism, which is also a bad idea.
- michaelmrose 10y ago
  When has a close to ideal free market existed?

socialist_coder 10y ago

How would you know? Just because it's never been truly tested in reality doesn't mean we can't stop and think about the situation. We know what corporations do when they are given a choice (they choose profits over anything else) and we know that consumers will choose low prices over everything else as well. So, it's not hard to draw the conclusion that this will result in consolidation, economies of scale, and eventually monopolies. Exactly what is already happening. In a "free market", what is going to prevent this? Every actor here is acting in their best interest. What could possibly change their behavior other than the government telling them to?

valuearb 10y ago
Where has economies of scale hurt? ISPs are a special case because regulations make it difficult or impossible for competitors to run cable. But economies of scale turned cars, PCs, consumer electronics, air travel, etc, from rich peoples play toys into affordable products for the masses. As consolidation hit all those industries their products merely got cheaper and in most cases, far better.
- arrosenberg 10y ago
  Walmart. Walmart has destroyed thousands of businesses. Now you can argue the consumer got lower prices, but low prices don't matter when no one has money to afford them. Additionally, those economies of scale produced cheap, disposable, polluting goods that have an engineered lifetime so that customers have to keep buying the same appliance (or whatever) over and over. The question isn't when economies of scale hurt, that's a loaded question. The question is "when does consolidation no longer benefit the consumer?". I would argue many, many industries have reached this point, with ISPs being the most obvious one, but there are many examples (like the syringe one given above) where a business you've never heard of silently corners the market through consolidation and trust building.
  - valuearb 10y ago
    Walmart has been a huge boon to the middle class. It's inarguable that consumers got lower prices, substantially lower prices. That's increased their standard of living. You can argue that Walmart hurt the standard of living of the Americans (less than 1% of US employees) who actually work for it. But that ignores the fact that the smaller competitors didn't pay much better, and never had a stock option plan, so the pay difference was marginal while the customer benefit was massive. Walmart big advantage wasn't labor costs, it was scale and inventory management from day one. And it's products are as good or better as the competitors. I hate Walmart, hate shopping there, but when I have to I'm always struck by how good the products are and how amazing the prices are.

goatlover 10y ago

There were powerful monopolies in the late 19th and early 20th century like U.S. Steel and Standard Oil that the government broke up.

valuearb 10y ago
Always found it interesting that the middle class in the US grew immensely wealthier during the period US Steel and Standard Oil were "monopolies".
- arrosenberg 10y ago
  How do you figure? Most historians credit the rise of the middle class to the post-war boom in the 50s. Standard Oil and US Steel were broken up during the Roosevelt and Taft administrations in the early 20th century.
  - valuearb 10y ago
    When JD Rockefeller was growing up, the average American rode a horse (if lucky), never traveled more than a few miles from home, few had even been on a train. Sailing ships were the main and dangerous form of sea transport. 95% of Americans worked brutal farm labor jobs. Homes were lit by candle and whale oil, and heated with firewood. By the time Standard Oil was broken up, railroads were everywhere, steel ships ruled the sea, cars roamed the roads. Homes were lit by electricity. Energy consumption had skyrocketed because the costs (esp. the cost of oil) had plummeted. Labor saving devices increased productivity and the standard of living, and were made possible by cheaper steel as well as cheaper energy.
    - antod 10y ago
      And the same thing happened in other countries without Standard Oil and US Steel monopolies.
    - code_duck 10y ago
      That's great, but I don't see why you credit that to those companies being monopolies. There's no reason to think these positive things wouldn't have occurred for consumers just the same if there was more healthy competition in the steel and petroleum market. That just happens to be the technological change that was sweeping the world at the time. It reminds me of Microsoft receiving credit for computers becoming pervasive and useful in everyday life, as if they deserve special recognition, or thanks, for brutally clawing their way to the top of a very profitable industry and ruthlessly suppressing competition, even when it meant scuttling superior technology. Clearly someone else would have made an OS for home and small business computing if Microsoft didn't.

coldtea 10y ago

>How would you know? We haven't had anything approaching a free market since the early 20th century We know exactly because of that. That there's the theoretical free market and the "really existing" one, and the really existing one is exactly what we get in practice if the big players get their way.

tim333 10y ago

>We haven't had anything approaching a free market since the early 20th century Hong Kong is often held up as a fairly free market that has worked well. The government does get involved in health care and the like but commerce is pretty free. http://www.cnbc.com/2016/02/01/hong-kong-is-worlds-freest-economy-us-slips-on-freedom-rank.html http://www.cnbc.com/2016/02/01/hong-kong-is-worlds-freest-ec...