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> 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

by 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.

nickik 9y ago
> Aren't nearly all markets regulated by Governments thanks to stuff like Laws? In general you are of course right. However in economics we usually use 'regulation' as a short hand for laws that are not general laws but more specific. In this discussion we were talking specifically about the regulation of competition. Specifically the believe that market automatically centralize and that the government is the only way to stop this. I'm not trying to make a statement about anything else. > That seems to be a very simplified/unfavorable view on that argument. I'd say unregulated markets incentivize preventing competition. I'm not sure what it means to 'prevent competition' in a free market? How would a company go about doing that? Buying all the places the competition wants to buy? Or what are you talking about. The problem is that you think to prevent this you put into place 'good regulations'. The reality however it that its exactly these regulation that companies will then use to actually prevent competition. Preventing competition is only successful if the government is carrying the cost. > 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. Again, I'm not against law. Not at all. I absolutely love the Common Law. Contracts and property rights enforcement are essential functions of governments in a capitalist system. What I object to is destructive top down regulations that companies can use and manipulate to their benefit. Anti-Trust regulation is one such top down regulation. It has most of the time been used to restrict completion and go after efficient business in the of the losers of the competition. It the exact kind of thing that is so problematic with this top-down management approach. Companies no longer compete in the market for costumers but rather fight zero sum battles in court of to influence the regulatory agency.
- vertex-four 9y ago
  One mechanism of preventing competition: You develop a portfolio of goods. For example, every medical tool a hospital would ever need. Over time, you develop economies of scale. Now you go to your client hospitals and say "hey, I'll give you a 10% discount if you sign this agreement to buy all your tools from us, and none from our competitors". Now you have successfully locked out anyone who can't provide an equivalent entire range of products. Someone comes up with a better/cheaper scalpel? Nope, can't compete, because if they bought the scalpel, the prices of everything else they buy would rise.
  - nickik 9y ago
    There is no lack of ways to limit competition on certain items of course, the possibilities are endless. This is however not the same as limiting competition in a broader sense. What you describe just moves competition to a different level. Instead of competing on individual items you compete on a broader model of how to supply somebody if they need many goods. There are many different models possible (and many that we see in the real world) and these different models compete as much or more then competition for any individual items. Considering competition in your example, why should anybody sign a long run contract with these people if their are better offers for the majority of products or other companies who have a similar model. People are not stupid, they understand the potential of abuse when they sign such a contract and they will only do so if they benefit. If it is better to buy individually or from some company that bundles goods is always a important question for any business. How to make such compromises is what managers go to school for. Business that do such evaluation well will be more successful (as will the company who they selected). > Over time, you develop economies of scale. Basically you assumed away the hardest problem. How will they reach this massive scale for all these products? You basically said 'assume the problem is solved' and then 'see its not actually a problem'. There are tons of games companies play with bundling unbundling and a million other models that are in use in markets today. Not one of these model actually leads to significant centralisation if both parties are free to conduct business by switching to different models. Prices will not be significantly over equilibrium for a long time whatever models companies try to use. Competition is about hole systems of relations superiority over other system of relations. That how we find efficient large scale solutions, this is how Capitalism is able to find ways to improve efficiency even in already optimised system of production. Consider how many different ways there are for franchising, no one model has succeeded yet.

by Faark 9y ago

nickik 9y ago

> Aren't nearly all markets regulated by Governments thanks to stuff like Laws? In general you are of course right. However in economics we usually use 'regulation' as a short hand for laws that are not general laws but more specific. In this discussion we were talking specifically about the regulation of competition. Specifically the believe that market automatically centralize and that the government is the only way to stop this. I'm not trying to make a statement about anything else. > That seems to be a very simplified/unfavorable view on that argument. I'd say unregulated markets incentivize preventing competition. I'm not sure what it means to 'prevent competition' in a free market? How would a company go about doing that? Buying all the places the competition wants to buy? Or what are you talking about. The problem is that you think to prevent this you put into place 'good regulations'. The reality however it that its exactly these regulation that companies will then use to actually prevent competition. Preventing competition is only successful if the government is carrying the cost. > 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. Again, I'm not against law. Not at all. I absolutely love the Common Law. Contracts and property rights enforcement are essential functions of governments in a capitalist system. What I object to is destructive top down regulations that companies can use and manipulate to their benefit. Anti-Trust regulation is one such top down regulation. It has most of the time been used to restrict completion and go after efficient business in the of the losers of the competition. It the exact kind of thing that is so problematic with this top-down management approach. Companies no longer compete in the market for costumers but rather fight zero sum battles in court of to influence the regulatory agency.

vertex-four 9y ago
One mechanism of preventing competition: You develop a portfolio of goods. For example, every medical tool a hospital would ever need. Over time, you develop economies of scale. Now you go to your client hospitals and say "hey, I'll give you a 10% discount if you sign this agreement to buy all your tools from us, and none from our competitors". Now you have successfully locked out anyone who can't provide an equivalent entire range of products. Someone comes up with a better/cheaper scalpel? Nope, can't compete, because if they bought the scalpel, the prices of everything else they buy would rise.
- nickik 9y ago
  There is no lack of ways to limit competition on certain items of course, the possibilities are endless. This is however not the same as limiting competition in a broader sense. What you describe just moves competition to a different level. Instead of competing on individual items you compete on a broader model of how to supply somebody if they need many goods. There are many different models possible (and many that we see in the real world) and these different models compete as much or more then competition for any individual items. Considering competition in your example, why should anybody sign a long run contract with these people if their are better offers for the majority of products or other companies who have a similar model. People are not stupid, they understand the potential of abuse when they sign such a contract and they will only do so if they benefit. If it is better to buy individually or from some company that bundles goods is always a important question for any business. How to make such compromises is what managers go to school for. Business that do such evaluation well will be more successful (as will the company who they selected). > Over time, you develop economies of scale. Basically you assumed away the hardest problem. How will they reach this massive scale for all these products? You basically said 'assume the problem is solved' and then 'see its not actually a problem'. There are tons of games companies play with bundling unbundling and a million other models that are in use in markets today. Not one of these model actually leads to significant centralisation if both parties are free to conduct business by switching to different models. Prices will not be significantly over equilibrium for a long time whatever models companies try to use. Competition is about hole systems of relations superiority over other system of relations. That how we find efficient large scale solutions, this is how Capitalism is able to find ways to improve efficiency even in already optimised system of production. Consider how many different ways there are for franchising, no one model has succeeded yet.