6 ms·

Why would the incentive structure of competition suddenly disappear when applied to utilities? Food and housing are equally inelastic and have high barriers of

by pitaj 8y ago

Why would the incentive structure of competition suddenly disappear when applied to utilities? Food and housing are equally inelastic and have high barriers of entry, but we see competition there. The water example you gave is an example of the government proactively monopolizing such utilities. It's exactly what I was talking about. Never have I seen evidence of water, power, etc naturally monopolizing and being hostile to consumers. Firms just can't keep out competition without state intervention.

hristov 8y ago
Ok then give me an example. In the entire world there are places with weak governments and with laissez faire governments. Is there any place where I can buy a house with five different independent water delivery and sewage removal systems attached to it? If there isn't then you would have to rethink your theories don't you. The fact of the matter is that there is such a thing as a natural monopoly and just a cursory examination of the facts on the ground and the history of the last 150 years or so will prove it.
- pitaj 8y ago
  > there are places ... with laissez faire governments Not really > Is there any place where I can buy a house with five different independent water delivery and sewage removal systems attached to it? I never claimed that it exists. I claimed it was possible. A thing doesn't need to exist to be possible. > The fact of the matter is that there is such a thing as a natural monopoly Name some, then. Show me the evidence of all these natural monopolies which cropped up on their own, taking advantage of consumers, and resulting in the necessity of making them state utilities.
  - dannyobrien 8y ago
    I’m not sure it directly helps anyone’s argument here, but 5 minute’s searching gave this study of water service in Nigeria, with a mixture of public and private services competing to provide potable water using different strategies. http://file.scirp.org/pdf/JWARP20120700002_74310948.pdf http://file.scirp.org/pdf/JWARP20120700002_74310948.pdf I think two responses to this would be a) that sounds like terrible public and private provision, and b) the competing water providers don’t all use pipes — they use boreholes, tankers, and rainwater collection, so they don’t count. But that’s probably how competition against an apparent natural monopoly would work: what might undermine Comcast, say, isn’t another cable company digging up the road, but a wireless broadband provider, or some technological alternative that circumvent the apparent advantages of the monopolist.
AnimalMuppet 8y ago
Because digging pipes to every house is expensive. The first company to do so does so in the expectation of serving every house. The second company would do so only in the expectation of getting business from every other house. Pretty soon - well before there are five companies serving each house - it doesn't make economic sense to dig trenches and install pipes in order to be the fifth company offering service to each house. And you ignored hristov's challenge. He wanted evidence (though phrased in a way that implied presenting it was impossible), and you responded with argument. Produce the evidence: Where in the world are there no government regulations on water companies, and it resulted in five companies offering service to each house? Where? Show us the data. Without that, you have argument, but the real world contradicts you...
- pitaj 8y ago
  I wasn't claiming that it existed somewhere in the world. I was arguing against the idea that a natural monopoly which is harmful to consumers can exist or has existed. He didn't give any evidence that one has. All he gave was a status quo fallacy. Just because water utility competition doesn't exist, doesn't mean it can't exist, or wouldn't exist in a free market. I don't need to give evidence. I'm not the one advocating for government action, I support inaction.
  - Retric 8y ago
    You argued that consumer hostile monopoly’s don’t exist without government. When presented with direct evidence that they do exist you when back to theory. Look, theory that does not apply in the real world is meaningless. And in the real world monopoly’s exist without government backing, making your argument invalid. That’s perfectly ok, but now it’s time for you to realize you made a false argument and think of some new idea of how things operate.
    - pitaj 8y ago
      > when presented with direct evidence that they do exist you when back to theory When was that? He never named a bunch of natural monopolies which exploited consumers. > in the real world monopoly’s exist without government backing Where is the evidence of this. My original comment clearly stated that I hadn't seen any evidence of consumer-hostile monopolies occurring without government backing. And in this thread, I've yet to see any lists of monopolies period, let alone ones people claimed to be natural.
will_brown 8y ago
>Never have I seen evidence of water, power, etc naturally monopolizing and being hostile to consumers. Come to Florida and checkout FPL post hurricane. They are pretty notorious for restoring power to wealthy neighborhoods first. That’s pretty hostile. Otherwise I think most agree they have a difficult job and seemingly continue to get better in terms of preparedness and restoration in these events. Going to the state intervention and water pipes as an example, even if the state said anyone can join in and compete whenever they want, it begs the question of how that would be possible without the state being involved. At any given point tom, dick or Harry want to start a water company the publi roads get ripped up yet again to lay pipe. Do Tom, dick and Harry all get to rip up my yard and connect to my home without my consent? If connections aren’t done all at once, do public roads get ripped up for every home that wants water connection from a new supplier? The NFL May be such an example of a monopoly (according to the courts) that doesn’t rely on state intervention, but good luck building your own stadium or contracting to use theirs any given Sunday. Are the hostile to consumers? I suppose that question is debatable based on your definition, in the case of my local team they price out consumers and have record low attendance and didn’t allow competitors to use their stadiums (USFL) to the detriment of football fans who wanted alternative leagues.
- pitaj 8y ago
  > Come to Florida and checkout FPL post hurricane. It looks to me like FPL is a utility heavily regulated in its rates and operation by the Florida state government. Seems like a lot of government involvement to me. > Going to the state intervention and water pipes as an example, even if the state said anyone can join in and compete whenever they want, it begs the question of how that would be possible without the state being involved. The roads could be built to facilitate expansion and competition. Roads could be avoided altogether through technology like directional drilling or tunneling. Competitors could get started by servicing new development first, then expanding into existing areas. As it stands, existing cities were designed with centralized utilities in mind. It makes it hard to monkey patch competition on top. > Do Tom, dick and Harry all get to rip up my yard and connect to my home without my consent? They shouldn't, but utilities use eminent domain all the time. > public roads get ripped up for every home that wants water connection from a new supplier? I don't think roads should be public either, but that's for another discussion. > The NFL May be such an example of a monopoly Talk about a bad example. The NFL gets all sorts of subsidies including cities building their stadiums for them! The military uses the NFL as a main medium for advertising.

by pitaj 8y ago

hristov 8y ago

Ok then give me an example. In the entire world there are places with weak governments and with laissez faire governments. Is there any place where I can buy a house with five different independent water delivery and sewage removal systems attached to it? If there isn't then you would have to rethink your theories don't you. The fact of the matter is that there is such a thing as a natural monopoly and just a cursory examination of the facts on the ground and the history of the last 150 years or so will prove it.

pitaj 8y ago
> there are places ... with laissez faire governments Not really > Is there any place where I can buy a house with five different independent water delivery and sewage removal systems attached to it? I never claimed that it exists. I claimed it was possible. A thing doesn't need to exist to be possible. > The fact of the matter is that there is such a thing as a natural monopoly Name some, then. Show me the evidence of all these natural monopolies which cropped up on their own, taking advantage of consumers, and resulting in the necessity of making them state utilities.
- dannyobrien 8y ago
  I’m not sure it directly helps anyone’s argument here, but 5 minute’s searching gave this study of water service in Nigeria, with a mixture of public and private services competing to provide potable water using different strategies. http://file.scirp.org/pdf/JWARP20120700002_74310948.pdf http://file.scirp.org/pdf/JWARP20120700002_74310948.pdf I think two responses to this would be a) that sounds like terrible public and private provision, and b) the competing water providers don’t all use pipes — they use boreholes, tankers, and rainwater collection, so they don’t count. But that’s probably how competition against an apparent natural monopoly would work: what might undermine Comcast, say, isn’t another cable company digging up the road, but a wireless broadband provider, or some technological alternative that circumvent the apparent advantages of the monopolist.

AnimalMuppet 8y ago

Because digging pipes to every house is expensive. The first company to do so does so in the expectation of serving every house. The second company would do so only in the expectation of getting business from every other house. Pretty soon - well before there are five companies serving each house - it doesn't make economic sense to dig trenches and install pipes in order to be the fifth company offering service to each house. And you ignored hristov's challenge. He wanted evidence (though phrased in a way that implied presenting it was impossible), and you responded with argument. Produce the evidence: Where in the world are there no government regulations on water companies, and it resulted in five companies offering service to each house? Where? Show us the data. Without that, you have argument, but the real world contradicts you...

pitaj 8y ago
I wasn't claiming that it existed somewhere in the world. I was arguing against the idea that a natural monopoly which is harmful to consumers can exist or has existed. He didn't give any evidence that one has. All he gave was a status quo fallacy. Just because water utility competition doesn't exist, doesn't mean it can't exist, or wouldn't exist in a free market. I don't need to give evidence. I'm not the one advocating for government action, I support inaction.
- Retric 8y ago
  You argued that consumer hostile monopoly’s don’t exist without government. When presented with direct evidence that they do exist you when back to theory. Look, theory that does not apply in the real world is meaningless. And in the real world monopoly’s exist without government backing, making your argument invalid. That’s perfectly ok, but now it’s time for you to realize you made a false argument and think of some new idea of how things operate.
  - pitaj 8y ago
    > when presented with direct evidence that they do exist you when back to theory When was that? He never named a bunch of natural monopolies which exploited consumers. > in the real world monopoly’s exist without government backing Where is the evidence of this. My original comment clearly stated that I hadn't seen any evidence of consumer-hostile monopolies occurring without government backing. And in this thread, I've yet to see any lists of monopolies period, let alone ones people claimed to be natural.

will_brown 8y ago

>Never have I seen evidence of water, power, etc naturally monopolizing and being hostile to consumers. Come to Florida and checkout FPL post hurricane. They are pretty notorious for restoring power to wealthy neighborhoods first. That’s pretty hostile. Otherwise I think most agree they have a difficult job and seemingly continue to get better in terms of preparedness and restoration in these events. Going to the state intervention and water pipes as an example, even if the state said anyone can join in and compete whenever they want, it begs the question of how that would be possible without the state being involved. At any given point tom, dick or Harry want to start a water company the publi roads get ripped up yet again to lay pipe. Do Tom, dick and Harry all get to rip up my yard and connect to my home without my consent? If connections aren’t done all at once, do public roads get ripped up for every home that wants water connection from a new supplier? The NFL May be such an example of a monopoly (according to the courts) that doesn’t rely on state intervention, but good luck building your own stadium or contracting to use theirs any given Sunday. Are the hostile to consumers? I suppose that question is debatable based on your definition, in the case of my local team they price out consumers and have record low attendance and didn’t allow competitors to use their stadiums (USFL) to the detriment of football fans who wanted alternative leagues.

pitaj 8y ago
> Come to Florida and checkout FPL post hurricane. It looks to me like FPL is a utility heavily regulated in its rates and operation by the Florida state government. Seems like a lot of government involvement to me. > Going to the state intervention and water pipes as an example, even if the state said anyone can join in and compete whenever they want, it begs the question of how that would be possible without the state being involved. The roads could be built to facilitate expansion and competition. Roads could be avoided altogether through technology like directional drilling or tunneling. Competitors could get started by servicing new development first, then expanding into existing areas. As it stands, existing cities were designed with centralized utilities in mind. It makes it hard to monkey patch competition on top. > Do Tom, dick and Harry all get to rip up my yard and connect to my home without my consent? They shouldn't, but utilities use eminent domain all the time. > public roads get ripped up for every home that wants water connection from a new supplier? I don't think roads should be public either, but that's for another discussion. > The NFL May be such an example of a monopoly Talk about a bad example. The NFL gets all sorts of subsidies including cities building their stadiums for them! The military uses the NFL as a main medium for advertising.