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You might get something out of this article: http://www.americanteeth.org/2015/06/21/why-i-m-a-capitalist-and-what-does-that-mean/ http://www.americanteeth.org/

You might get something out of this article: http://www.americanteeth.org/2015/06/21/why-i-m-a-capitalist-and-what-does-that-mean/ http://www.americanteeth.org/2015/06/21/why-i-m-a-capitalist... If "Capitalism in America means as close to monopolization and price gouging as possible." is your definition of capitalism, then you're off. (And I think that may be why you're being disagreed/downvoted on.) If you think that monopolization and price gouging is an emergent property of capitalism in America-- well, then, I wanna see some citations. My (radical, libertarian) view that a free market would only leads to monopolies when they're _market monopolies_-- meaning they've already providing the best service, and will continue to do so. The really damaging monopolies only ever come from government-granted powers. https://www.youtube.com/watch?v=4Vw6uF2LdZw https://www.youtube.com/watch?v=4Vw6uF2LdZw

erikpukinskis 9y ago
> My [...] view [is] that a free market [...] only leads to monopolies when they're already providing the best service Where does this belief come from? Is it just an article of faith for you? I've never seen any science to that effect, and there would appear to be no shortage of counterexamples. What would be the incentive to offer the best service once you are a market leader? It seems obvious to me that in many cases it is cheaper to interfere with competitors than it is to match their level of service. I see no reason why that would cease to be true even in a world without government (although government is certainly a frequent collaborator in such interference.) And I'm not talking about heinous interference, like bombing your competitor's factory. Even misleading advertising can often do the trick. Would you make statements in advertising subject to civil claims? If I can show you made technically factual but misleading statements to the public about the differences between our products I am entitled to recover lost sales from you?
- BoiledCabbage 9y ago
  I've always wondered this as well, and it seems to me that most just take it as an accepted article of faith. Even (In my opinion) contrary to current evidence.
- civilian 9y ago
  I don't want to believe that it's an article of faith for me :) I've heard convincing arguments for it, and the arguments against market monopolies haven't ever been satisfying. But, I also haven't taken a survey of all monopolies or wannabe-monopolies in history. Yeah, my view on monopolies comes from the base assumption that: "It's never cost-effective to try to interfere with the competition by either buying them out or by a price war." The awesome American example of it is from Dow Chemical vs. Bromkonvention (short description: http://www.investopedia.com/ask/answers/09/dow-chemical-bromine-monopoly.asp http://www.investopedia.com/ask/answers/09/dow-chemical-brom... ) and this is a longwinded account in favor of Standard Oil (and to be honest, I'm jumping around in the article as I'm reading it): https://www.theobjectivestandard.com/issues/2008-summer/standard-oil-company/ https://www.theobjectivestandard.com/issues/2008-summer/stan... For "buying out the competition", the idea is that: If company A with market dominance wants to maintain market dominance by buying out the competition, it'll always come at a bad deal. People who are starting new companies that do the same thing will be able to hold out for a price that makes selling worth it, which probably means that it's a bad deal for company A. At the same time, the person running the upstart company B can stay in business if they're willing to take fewer profits. Company A should be making lots of profits, if they have economies of scale. But if Company A takes any more profit than the difference in the benefit of having an economy of scale, then there is an opening to a competitor. If we start with Profit=Revenue-Cost / P = R - C, then if (Pa - Pb) > CostReductionFromHavingAnEconomyOfScale, then there is space for a small competitor to come in and make some profit. Sorry for going on that tangent--- I know that wasn't your main objection, but I wanted to back up my assumptions. The "misleading advertising" is a new angle I haven't thought of too much, but I would hope that consumers and organizations like Consumer Reports would be able to cut through the bullshit and get the product that's actually the best value. And I feel like, with the pervasiveness of aggressive advertising/marketing, most people, especially people who guide purchasing decisions in households & businesses, are able to look at it with a sharper eye. Not always an accurate eye, but sharp enough to be somewhat guided towards the direction of better value. The way that this applies to the recent election is that I think the effect of "fake news" is pretty overblown.
  - int_19h 9y ago
    I think that a lot of it is based on the general premise that market actors are nearly perfectly rational (which is the general premise in a lot of libertarian economic analysis, and, more broadly speaking, the Austrian school), which just doesn't hold up to practical observations.
- brewdad 9y ago
  Unless a market has low barriers to entry (startup costs, materials availability, skills availability) it will trend towards monopoly or oligopoly. The economies of scale gained as a market leader grows ensures this.
alasdair_ 9y ago
>The really damaging monopolies only ever come from government-granted powers. All private property in the Western world (and much of the rest of the world) is government-granted. Unless you happen to be a local warlord with your own private army, it's likely anything you think of as "yours" right now is only so because a government exists to either grant you the rights to it or to protect you from its theft. (Of course, Proudhoun would argue that all property is theft. I would too, but only after a couple of beers.).
Animats 9y ago
What we tend to see in modern capitalism is convergence on duopoly. AT&T and Comcast. Google and Facebook. It seems to take about four competitors before there's real price competition. EU antitrust policy recognizes this, but the US does not. There's a theory of duopolies.[1][2] Both parties don't have to form a cartel. Each party's optimal strategy is not full competition. It's a variation on the prisoner's dilemma. [1] https://books.google.com/books?id=3ojsWuqmorEC&pg=PA346 https://books.google.com/books?id=3ojsWuqmorEC&pg=PA346 [2] http://eml.berkeley.edu/~webfac/card/e101a_s05/101duopolytheory.pdf http://eml.berkeley.edu/~webfac/card/e101a_s05/101duopolythe...

erikpukinskis 9y ago

> My [...] view [is] that a free market [...] only leads to monopolies when they're already providing the best service Where does this belief come from? Is it just an article of faith for you? I've never seen any science to that effect, and there would appear to be no shortage of counterexamples. What would be the incentive to offer the best service once you are a market leader? It seems obvious to me that in many cases it is cheaper to interfere with competitors than it is to match their level of service. I see no reason why that would cease to be true even in a world without government (although government is certainly a frequent collaborator in such interference.) And I'm not talking about heinous interference, like bombing your competitor's factory. Even misleading advertising can often do the trick. Would you make statements in advertising subject to civil claims? If I can show you made technically factual but misleading statements to the public about the differences between our products I am entitled to recover lost sales from you?

BoiledCabbage 9y ago
I've always wondered this as well, and it seems to me that most just take it as an accepted article of faith. Even (In my opinion) contrary to current evidence.
civilian 9y ago
I don't want to believe that it's an article of faith for me :) I've heard convincing arguments for it, and the arguments against market monopolies haven't ever been satisfying. But, I also haven't taken a survey of all monopolies or wannabe-monopolies in history. Yeah, my view on monopolies comes from the base assumption that: "It's never cost-effective to try to interfere with the competition by either buying them out or by a price war." The awesome American example of it is from Dow Chemical vs. Bromkonvention (short description: http://www.investopedia.com/ask/answers/09/dow-chemical-bromine-monopoly.asp http://www.investopedia.com/ask/answers/09/dow-chemical-brom... ) and this is a longwinded account in favor of Standard Oil (and to be honest, I'm jumping around in the article as I'm reading it): https://www.theobjectivestandard.com/issues/2008-summer/standard-oil-company/ https://www.theobjectivestandard.com/issues/2008-summer/stan... For "buying out the competition", the idea is that: If company A with market dominance wants to maintain market dominance by buying out the competition, it'll always come at a bad deal. People who are starting new companies that do the same thing will be able to hold out for a price that makes selling worth it, which probably means that it's a bad deal for company A. At the same time, the person running the upstart company B can stay in business if they're willing to take fewer profits. Company A should be making lots of profits, if they have economies of scale. But if Company A takes any more profit than the difference in the benefit of having an economy of scale, then there is an opening to a competitor. If we start with Profit=Revenue-Cost / P = R - C, then if (Pa - Pb) > CostReductionFromHavingAnEconomyOfScale, then there is space for a small competitor to come in and make some profit. Sorry for going on that tangent--- I know that wasn't your main objection, but I wanted to back up my assumptions. The "misleading advertising" is a new angle I haven't thought of too much, but I would hope that consumers and organizations like Consumer Reports would be able to cut through the bullshit and get the product that's actually the best value. And I feel like, with the pervasiveness of aggressive advertising/marketing, most people, especially people who guide purchasing decisions in households & businesses, are able to look at it with a sharper eye. Not always an accurate eye, but sharp enough to be somewhat guided towards the direction of better value. The way that this applies to the recent election is that I think the effect of "fake news" is pretty overblown.
- int_19h 9y ago
  I think that a lot of it is based on the general premise that market actors are nearly perfectly rational (which is the general premise in a lot of libertarian economic analysis, and, more broadly speaking, the Austrian school), which just doesn't hold up to practical observations.
brewdad 9y ago
Unless a market has low barriers to entry (startup costs, materials availability, skills availability) it will trend towards monopoly or oligopoly. The economies of scale gained as a market leader grows ensures this.

alasdair_ 9y ago

>The really damaging monopolies only ever come from government-granted powers. All private property in the Western world (and much of the rest of the world) is government-granted. Unless you happen to be a local warlord with your own private army, it's likely anything you think of as "yours" right now is only so because a government exists to either grant you the rights to it or to protect you from its theft. (Of course, Proudhoun would argue that all property is theft. I would too, but only after a couple of beers.).

Animats 9y ago

What we tend to see in modern capitalism is convergence on duopoly. AT&T and Comcast. Google and Facebook. It seems to take about four competitors before there's real price competition. EU antitrust policy recognizes this, but the US does not. There's a theory of duopolies.[1][2] Both parties don't have to form a cartel. Each party's optimal strategy is not full competition. It's a variation on the prisoner's dilemma. [1] https://books.google.com/books?id=3ojsWuqmorEC&pg=PA346 https://books.google.com/books?id=3ojsWuqmorEC&pg=PA346 [2] http://eml.berkeley.edu/~webfac/card/e101a_s05/101duopolytheory.pdf http://eml.berkeley.edu/~webfac/card/e101a_s05/101duopolythe...