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> ...as long as the market is more or less zero-sum game, one always go in hand with the other. This statement derives from pure propaganda. It has almost nev

> ...as long as the market is more or less zero-sum game, one always go in hand with the other. This statement derives from pure propaganda. It has almost never played out that way in history. What almost always actually happens is that once a business gets large enough, it has the power to force all of its competitors into bankruptcy or buy them out and then it gets monopoly power. Once it has monopoly power, anything goes. There are so many examples of this just in American history up until Teddy Roosevelt busted the trusts. Even after that, there are a ton of examples of businesses being allowed to get way too close before the government got around to breaking them up. If you want to see the clearest example what happens in an entirely unregulated free market -- look at the internet. The internet has, thus far, been almost entirely unregulated and it has the lowest barrier to entry of almost any business ever. It takes almost no capital to start an internet startup -- just the knowledge and some free time. And yet, Google has near monopoly power over search. Facebook has near monopoly power over social media. Amazon is nearing monopoly power over internet retail. In each case, they haven't wielded their enormous power in the marketplace, largely for fear of public backlash leading to regulation. If there was no threat of regulation, you could sure bet they would.

api 9y ago
It's worse than that. There is no such thing as an impenetrable firewall between the public and the private sphere. It's one of the areas where libertarian idealism doesn't quite work in the real world. I can't think of a way to limit the political influence of business without limiting the size and financial leverage of individual businesses. A libertarian society that fails to do this will not remain libertarian for long, since suitably large corporate entities will become the state. Why compete at all when you can just write your own laws and tap the public treasury?
- mdpopescu 9y ago
  The reason why large corporate entities becoming the state is less of a problem than the actual state is because of competition. I called the cops three times in my life (Romania), the first two times I was told "not my job" (public drunkness instances), the third time someone's life was actually in danger. They told me they're going to show up... half an hour later, I had to leave the place; they hadn't showed up. (And they never called me back, so they probably never bothered.) I cannot fire them for that. I cannot tell them "I want to hire another company". That is the problem I have with the state. I actually don't want to bother with defending myself - I am more than willing to pay someone else to do it for me. But if the state claims to do that, I cannot go to the competition when they don't do their job.
  - api 9y ago
    How do you compete with a corporate entity that has become the state? Getting back to net neutrality: you also have the concept of a natural monopoly. A natural monopoly is something where there is an intrinsic barrier to competition. In the case of telecom there is a natural monopoly over last mile connectivity because it makes zero economic sense to create more than one or two redundant last mile connectivity networks. It would also be an eyesore. Imagine huge sprawling bundles of wires or constant digging everywhere. So for telecoms like Cox, Comcast, etc. you have a double whammy: they are natural monopolies and competition is also restricted by a state over which they have achieved regulatory capture. These companies are monopolies, plain and simple, and if they can leverage that monopoly they can effectively shut down the Internet as a venue for entrepreneurship.
    - mdpopescu 9y ago
      If by "become the state" you mean "is supplying state-like services" (like defense), you compete by creating another company supplying the same services. We have dozens of private defense companies in Romania. If you mean "is preventing others from supplying the same services"... if it does that by using force, we're no worse off than now. If it does that by enticing people to sign bad agreements... I can't say I like the idea, but I'm not seeing it as a big deal long-term. > In the case of telecom there is a natural monopoly over last mile connectivity because it makes zero economic sense to create more than one or two redundant last mile connectivity networks And yet, I have one ISP that put up 7 km of fiber optics, that have been stolen several times, in order to get my business. (I live in the country side.) I had another ISP that put up 15 km of regular cable for the same reason. (I no longer use them because at some point I had 3 ISPs and I was trying to cut costs. I honestly regret that now that I'm making a lot more money.)
  - dbingham 9y ago
    I understand why a corporate entity being the state sounds appealing -- the theory that you at least _can_ go to another company seems really appealing on its face. But in reality, there is no difference. What you're missing here is that in a monopoly situation there is no competition. You can't go hire another company. You can tell the monopoly you want to hire another company until you're blue in the face, but they don't care. They know you don't actually have the option, because there is no other company to hire. You can try to start another company, but in a monopoly situation, the monopoly can always out compete you. They can simply drop prices in your small area of competition below you (or to zero) until you go out of business. Even if people hate the monopoly, they often won't be able to afford your higher prices. And if you look at history, when companies achieve monopoly power, they do often essentially usurp the power of the state, up to and including coercive force. Look at the history of unionization attempts in the mining industry, particularly in the Appalachians here in the US. In the late 1800s and early 1900s, union attempts were often suppressed with privately hired military force -- or with the state's military hired out as a private military force. And there's another level, corporate entities as state are worse, in many respects than an inefficient or corrupt democratic state. With a democratic state, it's still, ostensibly, answerable to the people. If you can organize enough of a popular response against it at the polls and in street protests, you can change it. A corporate entity is answerable to its owners and stockholders. It's an oligarchy. When it becomes the state, it becomes the worse kind of dictatorship and your only choice is revolution.
hueving 9y ago
>And yet, Google has near monopoly power over search. Facebook has near monopoly power over social media. Amazon is nearing monopoly power over internet retail Absolute nonsense. These players have large market shares but that is not anything close to a monopoly. Bing, Walmart, and Twitter are just 1 second away. Here is a rule of thumb, if you can change companies in less than 5 minutes without getting dressed, they have nothing close to a monopoly. The reason they haven't "wielded their enormous power" is because people can so easily switch. That's not a problem monopolies or near monopolies have (see Comcast for an example of near monopoly behavior).

api 9y ago

It's worse than that. There is no such thing as an impenetrable firewall between the public and the private sphere. It's one of the areas where libertarian idealism doesn't quite work in the real world. I can't think of a way to limit the political influence of business without limiting the size and financial leverage of individual businesses. A libertarian society that fails to do this will not remain libertarian for long, since suitably large corporate entities will become the state. Why compete at all when you can just write your own laws and tap the public treasury?

mdpopescu 9y ago
The reason why large corporate entities becoming the state is less of a problem than the actual state is because of competition. I called the cops three times in my life (Romania), the first two times I was told "not my job" (public drunkness instances), the third time someone's life was actually in danger. They told me they're going to show up... half an hour later, I had to leave the place; they hadn't showed up. (And they never called me back, so they probably never bothered.) I cannot fire them for that. I cannot tell them "I want to hire another company". That is the problem I have with the state. I actually don't want to bother with defending myself - I am more than willing to pay someone else to do it for me. But if the state claims to do that, I cannot go to the competition when they don't do their job.
- api 9y ago
  How do you compete with a corporate entity that has become the state? Getting back to net neutrality: you also have the concept of a natural monopoly. A natural monopoly is something where there is an intrinsic barrier to competition. In the case of telecom there is a natural monopoly over last mile connectivity because it makes zero economic sense to create more than one or two redundant last mile connectivity networks. It would also be an eyesore. Imagine huge sprawling bundles of wires or constant digging everywhere. So for telecoms like Cox, Comcast, etc. you have a double whammy: they are natural monopolies and competition is also restricted by a state over which they have achieved regulatory capture. These companies are monopolies, plain and simple, and if they can leverage that monopoly they can effectively shut down the Internet as a venue for entrepreneurship.
  - mdpopescu 9y ago
    If by "become the state" you mean "is supplying state-like services" (like defense), you compete by creating another company supplying the same services. We have dozens of private defense companies in Romania. If you mean "is preventing others from supplying the same services"... if it does that by using force, we're no worse off than now. If it does that by enticing people to sign bad agreements... I can't say I like the idea, but I'm not seeing it as a big deal long-term. > In the case of telecom there is a natural monopoly over last mile connectivity because it makes zero economic sense to create more than one or two redundant last mile connectivity networks And yet, I have one ISP that put up 7 km of fiber optics, that have been stolen several times, in order to get my business. (I live in the country side.) I had another ISP that put up 15 km of regular cable for the same reason. (I no longer use them because at some point I had 3 ISPs and I was trying to cut costs. I honestly regret that now that I'm making a lot more money.)
- dbingham 9y ago
  I understand why a corporate entity being the state sounds appealing -- the theory that you at least _can_ go to another company seems really appealing on its face. But in reality, there is no difference. What you're missing here is that in a monopoly situation there is no competition. You can't go hire another company. You can tell the monopoly you want to hire another company until you're blue in the face, but they don't care. They know you don't actually have the option, because there is no other company to hire. You can try to start another company, but in a monopoly situation, the monopoly can always out compete you. They can simply drop prices in your small area of competition below you (or to zero) until you go out of business. Even if people hate the monopoly, they often won't be able to afford your higher prices. And if you look at history, when companies achieve monopoly power, they do often essentially usurp the power of the state, up to and including coercive force. Look at the history of unionization attempts in the mining industry, particularly in the Appalachians here in the US. In the late 1800s and early 1900s, union attempts were often suppressed with privately hired military force -- or with the state's military hired out as a private military force. And there's another level, corporate entities as state are worse, in many respects than an inefficient or corrupt democratic state. With a democratic state, it's still, ostensibly, answerable to the people. If you can organize enough of a popular response against it at the polls and in street protests, you can change it. A corporate entity is answerable to its owners and stockholders. It's an oligarchy. When it becomes the state, it becomes the worse kind of dictatorship and your only choice is revolution.

hueving 9y ago

>And yet, Google has near monopoly power over search. Facebook has near monopoly power over social media. Amazon is nearing monopoly power over internet retail Absolute nonsense. These players have large market shares but that is not anything close to a monopoly. Bing, Walmart, and Twitter are just 1 second away. Here is a rule of thumb, if you can change companies in less than 5 minutes without getting dressed, they have nothing close to a monopoly. The reason they haven't "wielded their enormous power" is because people can so easily switch. That's not a problem monopolies or near monopolies have (see Comcast for an example of near monopoly behavior).