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I think you're far too focused on corruption here. As I've pointed out, contracts are friction. And, since profit without friction is impossible (scarcity is j

by beat 8y ago

I think you're far too focused on corruption here. As I've pointed out, contracts are friction. And, since profit without friction is impossible (scarcity is just one form of friction), contracts are a Good Thing, a thing that makes capitalism viable. Illegal monopoly behavior is just a pathological corner case of contract law, and it's silly to focus on it. Consider an alternative - you contract me for a service, and I reduce my costs and increase my profit by simply not providing that service. This isn't exotic. This is common as dirt, happens every day.

AnthonyMouse 8y ago
> I think you're far too focused on corruption here. Because that's what we're talking about -- the thing that prevents an ordinary person from collecting trash for $1 and taking it to the dump in a way that doesn't involve externalizing costs or doing anything nefarious, yet is still prohibited. There are approximately zero people who think it should be legal to dump trash in the river. > As I've pointed out, contracts are friction. Except that contracts are anti-friction. If you have someone collecting trash for $2 even though it costs $1 because they're the only one with a truck (so scarcity), someone else might be willing to buy a truck and do it for $1 but only if they're guaranteed the business for a period of time sufficient to pay off the cost of the truck. So the contract reduces friction by $1. Your claim is that it then prevents it from being reduced by another $.10 when the first guy offers to do it for $.90 to try to regain the business, but the only reason that would happen is that the contract allowed the second guy to enter the market. And you can do all of this negotiating before signing with anyone -- go to the first guy and demand $.90 or you'll sign with the second guy for $1. Then the existence of contracts gets you to $.90 when otherwise you would be stuck at $2. You may not even need to actually enter into the contract for the existence of contracts to reduce friction, because each provider knows you could enter a contract with the other and at least one would prefer to provide you service at a low price with no contract than have you sign with the other guy. > And, since profit without friction is impossible (scarcity is just one form of friction), contracts are a Good Thing, a thing that makes capitalism viable. Unless you're just defining friction to mean scarcity, I'm curious what these other forms of friction are that can produce profit without scarcity. For example, adding any amount of friction to the process of producing table salt by chemical reaction isn't going to make table salt more expensive because there is so much in the ground that even a hard prohibition on manufacturing it chemically wouldn't materially affect the market price. And the fact that profit comes from scarcity still doesn't mean you ever want more scarcity on net as a society -- there is plenty of "real" (no known way to avoid) scarcity to profit from without wastefully creating more on purpose. > Illegal monopoly behavior is just a pathological corner case of contract law, and it's silly to focus on it. Consider an alternative - you contract me for a service, and I reduce my costs and increase my profit by simply not providing that service. This isn't exotic. This is common as dirt, happens every day. And then you get sued for breach of contract, the judge orders you to make good and now you have that expense plus the legal expense. How is that supposed to increase your profit? Unless you mean breaking the law and getting away with it, but in that case what's even more profitable is bank robbery, right? The reason these things are all illegal is that they're a form of conduct that increases rather than reduces friction, which is why they're against the law. Because friction is bad.

by beat 8y ago

AnthonyMouse 8y ago

> I think you're far too focused on corruption here. Because that's what we're talking about -- the thing that prevents an ordinary person from collecting trash for $1 and taking it to the dump in a way that doesn't involve externalizing costs or doing anything nefarious, yet is still prohibited. There are approximately zero people who think it should be legal to dump trash in the river. > As I've pointed out, contracts are friction. Except that contracts are anti-friction. If you have someone collecting trash for $2 even though it costs $1 because they're the only one with a truck (so scarcity), someone else might be willing to buy a truck and do it for $1 but only if they're guaranteed the business for a period of time sufficient to pay off the cost of the truck. So the contract reduces friction by $1. Your claim is that it then prevents it from being reduced by another $.10 when the first guy offers to do it for $.90 to try to regain the business, but the only reason that would happen is that the contract allowed the second guy to enter the market. And you can do all of this negotiating before signing with anyone -- go to the first guy and demand $.90 or you'll sign with the second guy for $1. Then the existence of contracts gets you to $.90 when otherwise you would be stuck at $2. You may not even need to actually enter into the contract for the existence of contracts to reduce friction, because each provider knows you could enter a contract with the other and at least one would prefer to provide you service at a low price with no contract than have you sign with the other guy. > And, since profit without friction is impossible (scarcity is just one form of friction), contracts are a Good Thing, a thing that makes capitalism viable. Unless you're just defining friction to mean scarcity, I'm curious what these other forms of friction are that can produce profit without scarcity. For example, adding any amount of friction to the process of producing table salt by chemical reaction isn't going to make table salt more expensive because there is so much in the ground that even a hard prohibition on manufacturing it chemically wouldn't materially affect the market price. And the fact that profit comes from scarcity still doesn't mean you ever want more scarcity on net as a society -- there is plenty of "real" (no known way to avoid) scarcity to profit from without wastefully creating more on purpose. > Illegal monopoly behavior is just a pathological corner case of contract law, and it's silly to focus on it. Consider an alternative - you contract me for a service, and I reduce my costs and increase my profit by simply not providing that service. This isn't exotic. This is common as dirt, happens every day. And then you get sued for breach of contract, the judge orders you to make good and now you have that expense plus the legal expense. How is that supposed to increase your profit? Unless you mean breaking the law and getting away with it, but in that case what's even more profitable is bank robbery, right? The reason these things are all illegal is that they're a form of conduct that increases rather than reduces friction, which is why they're against the law. Because friction is bad.