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There are free markets and then there are free markets. There are commodity markets with many producers, many consumers and product uniformity. These can be mo

by netcan 9y ago

There are free markets and then there are free markets. There are commodity markets with many producers, many consumers and product uniformity. These can be modeled very effectively using economic theories. Barley, pork bellies, silver. There are more “normal” markets with many (or at least enough) producers & consumers and nonuniform products with sufficient substitution options. Supermarkets, building supplies, spoons, shoes… These tend to be efficient and broadly explainable via economic theories. Some markets are highly regulated. Some markets are oligopolistic or have an monopolistic component in the “value chain” (e.g. last mile infrastructure). Some are highly financialized (e.g. health insurance markets) or have weird standardisation/compatibility issues. Some have high fixed/marginal cost structures. Lock-in, licensing issues, externalities, inflexible supply side (e.g. housing), property rights aggregation issues (e.g. regional US radio bands), bundling… The ability of a market to be dynamic, efficient, innovative and all the other emergent properties of a free market is limited by all these things. Telcom markets have a lot of these issues. That’s why highly interventionist policies have performed well relative to more “free” market setups.

icebraining 9y ago
Telcom markets have a lot of these issues. That’s why highly interventionist policies have performed well relative to more “free” market setups. Which telcom markets are you thinking about? The ones I'm familiar with are all fairly interventionist.
kabbalf 9y ago
It could be argued that these criteria lead to the opposite conclusion. Many producers: maybe not, but most countries have at least 3 [1]. Not worse than e.g. major grocery store chains or gas stations. Many consumers: definitely Product uniformity: significant--I don't care how my 1 mb of data or 1 min of talk is routed The key anti-free market characteristic is arguably the limited amount of frequency spectrum, which is allocated via centralized auctions. Yet I don't recall hearing similar complaints about the radio or TV industries in Europe. A lot of the arguments in this thread are that the market is inefficient and therefore must be regulated, but is this the right path if the inefficiencies are due to regulation in the first place? [1]: https://en.wikipedia.org/wiki/List_of_mobile_network_operators_of_Europe https://en.wikipedia.org/wiki/List_of_mobile_network_operato...

by netcan 9y ago

icebraining 9y ago

Telcom markets have a lot of these issues. That’s why highly interventionist policies have performed well relative to more “free” market setups. Which telcom markets are you thinking about? The ones I'm familiar with are all fairly interventionist.

kabbalf 9y ago

It could be argued that these criteria lead to the opposite conclusion. Many producers: maybe not, but most countries have at least 3 [1]. Not worse than e.g. major grocery store chains or gas stations. Many consumers: definitely Product uniformity: significant--I don't care how my 1 mb of data or 1 min of talk is routed The key anti-free market characteristic is arguably the limited amount of frequency spectrum, which is allocated via centralized auctions. Yet I don't recall hearing similar complaints about the radio or TV industries in Europe. A lot of the arguments in this thread are that the market is inefficient and therefore must be regulated, but is this the right path if the inefficiencies are due to regulation in the first place? [1]: https://en.wikipedia.org/wiki/List_of_mobile_network_operators_of_Europe https://en.wikipedia.org/wiki/List_of_mobile_network_operato...