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People keep arguing that free markets create monopolies. If you actually look at this history you see almost no monopolies rise from the market, but government

by nickik 9y ago

People keep arguing that free markets create monopolies. If you actually look at this history you see almost no monopolies rise from the market, but government created monopolies and cartels are all over the place. If this is such a huge problem please give me some examples where a company established a monopoly AND actually raised prices for consumer higher.

pjc50 9y ago
Standard Oil is the usual one. AT&T highly relevant as well.
- nickik 9y ago
  Standard Oil massively LOWERED oil prices and improved both Oil quality and transport. If that's a monopoly then we should have more of them. If you actually apply Modern Anti-Trust law rather then Progressive Politicians who engaged in 'Trust Busting' as political program, you will see that it would not be possible to convict Standard Oil. The people who brought Anti-Trust against Standard Oil were competitors. In fact, the hole history of Anti-Trust is basically the history of weak and failing business to bring in the government against their more dynamic competition. Butcher were at the forefront of that, Anti-Trust was a way to defeat the evil refrigerated train and centralised slaughterhouses who were making monopolies. You know the kind of monopolies were you massively lower prices for consumers. I'm not as familiar with AT&T but I'm pretty sure there is a significant government involvement and providing it with monopoly power. You are kind of proving my point. People all believe capitalism leads to monopoly, but its almost impossible to find a good case. I do think that there are some cases, but the general theory that free markets always lead to monopoly is totally false. Even when markets create monopolies most of the time these monopolies can't (or want) do monopoly prices. Also think about it like this. There are very few cases where government somehow helped to break a monopoly bought I could easily point you to lots and lots of cases where government created monopolies. Overall governments involvement in the idea to regulate competition in markets is a absolute failure that has only lead to lots of corruption.
  - jamespo 9y ago
    Please point us to these lots of cases
    - nickik 9y ago
      The US post office. Unit Banking Regulation. The New Deal had a ton of cartelization policies (read any book on the new deal). US policy created and enforced Rail road cartels. Government monopoly or government protect monopoly for alcohol or gambling is very common in many states. There are tons of monopolies granted to telecommunications companies. Other forms of local infrastructure monopolies are also often granted. There is literally huge list, history of economic is full of it. Its very hard to find real market monopoly that had high prices, but government enforcement of monopoly or cartel are common. You can go back to Britain when parliament established itself, one of their action was to take away the Kings privilege to sell monopolies. Granting of monopoly rights and enforcing cartels is a extremely common government activity.
      - jamespo 9y ago
        Ignoring prices, what do you think about when a company uses a dominant market position in one area to establish one in another, eg Microsoft in 90s/early 00s?
        nickik 9y ago
        That can happen but it also makes the company more venerable. They tie the success of all product to the same revenue stream. Its a legit strategy but I don't think it wins in the long run. Microsoft is a perfect example where they no longer bundle many products. Its annoying for individual fans of the fields but it can is also is very, very unlikely to actually lead to market centralisation in the Marxist sense. Specially if you are looking at long run dynamics.
  - Faark 9y ago
    > Overall governments involvement in the idea to regulate competition in markets is a absolute failure that has only lead to lots of corruption. Aren't nearly all markets regulated by Governments thanks to stuff like Laws? Like "don't murder your competitors workforce", "honor contracts", "don't poison the air", "don't lie about foods ingredients", "don't operate cell jammer to boost your wired cable business", "make sure people can learn about medicines side effects" and so on. To me all of that seems to be on a scale and arguing what point on that we should target is fine. But I can't take those arguing for one of its ends seriously. As for the "no regulation", I can't imagine a working system like that. In such a case humans would probably voluntarily form communities with rules&regulations that would probably look the same as communities/countries that currently exist. I'm not saying we already hit the sweet spot on the scale. And even once we do we'll probably only ever recognize it in retrospect. > free markets always lead to monopoly is totally false That seems to be a very simplified/unfavorable view on that argument. I'd say unregulated markets incentivize preventing competition. Far too often even by pushing for bad regulation. Preventing competition seems more easily possible in cases of huge power imbalances, something unregulated capitalism seems to boost. The only way to confine these effects seems to be putting in place good regulation actually securing competition. And yes, we'll have to keep arguing about the "good vs bad" for each and every law. That's why I really don't get "there should be no law"-guys.
rectang 9y ago
There is no such thing as an unregulated marketplace. Companies that become monopolies do not achieve that status in a vacuum -- of course they will seek all possible advantages including regulatory capture. > government created monopolies and cartels are all over the place. When government officials are bought off, somebody has to do the buying.
- nickik 9y ago
  > When government officials are bought off, somebody has to do the buying. That is false. Many progressives and other did id based on ideology and ignorance not because they were bought off.
yorwba 9y ago
https://en.wikipedia.org/wiki/Pyrimethamine#Availability_and_price https://en.wikipedia.org/wiki/Pyrimethamine#Availability_and...

by nickik 9y ago

pjc50 9y ago

Standard Oil is the usual one. AT&T highly relevant as well.

nickik 9y ago
Standard Oil massively LOWERED oil prices and improved both Oil quality and transport. If that's a monopoly then we should have more of them. If you actually apply Modern Anti-Trust law rather then Progressive Politicians who engaged in 'Trust Busting' as political program, you will see that it would not be possible to convict Standard Oil. The people who brought Anti-Trust against Standard Oil were competitors. In fact, the hole history of Anti-Trust is basically the history of weak and failing business to bring in the government against their more dynamic competition. Butcher were at the forefront of that, Anti-Trust was a way to defeat the evil refrigerated train and centralised slaughterhouses who were making monopolies. You know the kind of monopolies were you massively lower prices for consumers. I'm not as familiar with AT&T but I'm pretty sure there is a significant government involvement and providing it with monopoly power. You are kind of proving my point. People all believe capitalism leads to monopoly, but its almost impossible to find a good case. I do think that there are some cases, but the general theory that free markets always lead to monopoly is totally false. Even when markets create monopolies most of the time these monopolies can't (or want) do monopoly prices. Also think about it like this. There are very few cases where government somehow helped to break a monopoly bought I could easily point you to lots and lots of cases where government created monopolies. Overall governments involvement in the idea to regulate competition in markets is a absolute failure that has only lead to lots of corruption.
- jamespo 9y ago
  Please point us to these lots of cases
  - nickik 9y ago
    The US post office. Unit Banking Regulation. The New Deal had a ton of cartelization policies (read any book on the new deal). US policy created and enforced Rail road cartels. Government monopoly or government protect monopoly for alcohol or gambling is very common in many states. There are tons of monopolies granted to telecommunications companies. Other forms of local infrastructure monopolies are also often granted. There is literally huge list, history of economic is full of it. Its very hard to find real market monopoly that had high prices, but government enforcement of monopoly or cartel are common. You can go back to Britain when parliament established itself, one of their action was to take away the Kings privilege to sell monopolies. Granting of monopoly rights and enforcing cartels is a extremely common government activity.
    - jamespo 9y ago
      Ignoring prices, what do you think about when a company uses a dominant market position in one area to establish one in another, eg Microsoft in 90s/early 00s?
      - nickik 9y ago
        That can happen but it also makes the company more venerable. They tie the success of all product to the same revenue stream. Its a legit strategy but I don't think it wins in the long run. Microsoft is a perfect example where they no longer bundle many products. Its annoying for individual fans of the fields but it can is also is very, very unlikely to actually lead to market centralisation in the Marxist sense. Specially if you are looking at long run dynamics.
- Faark 9y ago
  > Overall governments involvement in the idea to regulate competition in markets is a absolute failure that has only lead to lots of corruption. Aren't nearly all markets regulated by Governments thanks to stuff like Laws? Like "don't murder your competitors workforce", "honor contracts", "don't poison the air", "don't lie about foods ingredients", "don't operate cell jammer to boost your wired cable business", "make sure people can learn about medicines side effects" and so on. To me all of that seems to be on a scale and arguing what point on that we should target is fine. But I can't take those arguing for one of its ends seriously. As for the "no regulation", I can't imagine a working system like that. In such a case humans would probably voluntarily form communities with rules&regulations that would probably look the same as communities/countries that currently exist. I'm not saying we already hit the sweet spot on the scale. And even once we do we'll probably only ever recognize it in retrospect. > free markets always lead to monopoly is totally false That seems to be a very simplified/unfavorable view on that argument. I'd say unregulated markets incentivize preventing competition. Far too often even by pushing for bad regulation. Preventing competition seems more easily possible in cases of huge power imbalances, something unregulated capitalism seems to boost. The only way to confine these effects seems to be putting in place good regulation actually securing competition. And yes, we'll have to keep arguing about the "good vs bad" for each and every law. That's why I really don't get "there should be no law"-guys.

rectang 9y ago

There is no such thing as an unregulated marketplace. Companies that become monopolies do not achieve that status in a vacuum -- of course they will seek all possible advantages including regulatory capture. > government created monopolies and cartels are all over the place. When government officials are bought off, somebody has to do the buying.

nickik 9y ago
> When government officials are bought off, somebody has to do the buying. That is false. Many progressives and other did id based on ideology and ignorance not because they were bought off.

yorwba 9y ago

https://en.wikipedia.org/wiki/Pyrimethamine#Availability_and_price https://en.wikipedia.org/wiki/Pyrimethamine#Availability_and...