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>There is an inevitable conflict between the concepts of "freedom of property" and "competition". There is no such thing. All the american monopolies are due t

>There is an inevitable conflict between the concepts of "freedom of property" and "competition". There is no such thing. All the american monopolies are due to protection policies defending them from the competition, i.e. due to the government's interventions. FCC, FDA, FAA are all run by corps' shills. US is a one big blatant example of regulatory capture and crony capitalism at its worse.

andrekandre 7y ago
so does that mean that googles search monopoly, or amazons almost soon-to-be monopoly are cause by the govt? what about classic monopolies like standard oil or northern securities company? isn’t it more like monopolies that are allowed to survive do so by the ‘protection policies’ of the govt? so while i do agree fcc, fda, faa are run by corporate shills, back in the days of near zero regulations huge monopolies continued to walk the earth until broken up... and breaking up monopolies is part of regulation
- ernst_klim 7y ago
  A company could achieve quite a big market share, but it's nearly impossible to hold it for a longer period of time without a government's protection. It's a simple common sense: either you continue to provide the best service, and gain nothing from your market share, or you start to milk the consumers to squeeze more profits. The greed would simply mandate the latter strategy, hence monopolies don't last. >what about classic monopolies like standard oil or northern securities company? The former wasn't a monopoly at the time of anti-trust case. >Standard Oil’s share of the market had declined from close to 90 percent in the late 1800s to about 65 percent at the time of the court’s ruling The latter was operational for how long, less than a year? >so does that mean that googles search monopoly, or amazons almost soon-to-be monopoly are cause by the govt? https://www.bloomberg.com/news/articles/2019-01-22/google-set-2018-lobbying-record-as-washington-techlash-expands https://www.bloomberg.com/news/articles/2019-01-22/google-se... >isn’t it more like monopolies that are allowed to survive do so by the ‘protection policies’ of the govt? No, it's the monopolies which actively exploit the government, especially amazon. >back in the days of near zero regulations huge monopolies continued to walk the earth Examples? For example before the deregulation, there were only 6 breweries in the whole US. After deregulation their number grew. https://www.youtube.com/watch?v=2E3bPU0g8SA https://www.youtube.com/watch?v=2E3bPU0g8SA Regulations are burden: they increase the entering threshold leading to monopolization. You also need a regulatory agency, which is either run by bureaucrats who don't understand much in the industry (hence not adequate laws) or the industry people (hence regulatory capture). And anti-trust is no different here, the standard oil history is a great example of how it punished a non-monopoly.
  - andrekandre 7y ago
    what do you feel is the best way to prevent monopolies forming? the way i see it, access to capital is a huge barrier for many potential competitors and it may take many decades for a natural monopoly to fade, all the while the population suffers.... (just to be clear, i’m not necessarily for burdensome regulation, but things like environmental degradation, predatory financial speculation (see post glass-steagal deregulation and 2007) and natural barriers to competition such as capital, land etc make it difficult for me to believe in complete laissez-faire)
    - ernst_klim 7y ago
      > what do you feel is the best way to prevent monopolies forming? You don't need to prevent them. If a company provides an outstanding quality of service, it would have a big market share for some time, and that's fine. What's bad is when people are suffering due to monopoly. But in this case laissez-faire is enough, because suffering causes the demand, the demand causes the supply, provided by competitors. > the way i see it, access to capital is a huge barrier for many potential competitors Most barriers in the west are inflated by the industry and government. Take the big pharma as an example, the barrier is due to the regulations and patents (and FDA), purely. Russian and Indian companies could produce and sometimes even develop drugs for a tiny fraction of costs that are usual in US. Now I do understand that patents may incentivize investments in R&D, but they also incentivize monopolies and oligopolies being the monopoly right. >it may take many decades for a natural monopoly to fade If the population suffers, it create the supply for the better service. If such a supply exists, what prevents a demand? It couldn't be any financial barrier, because it's not a rocket science to attract investments when so much of a demand exists. >and natural barriers to competition such as capital, land Capital is not a barrier, especially in US, where investment climate is so good. Land is not an important resource for a vast majority of contemporary production, we are not living in agricultural society. I don't think that nowadays there exist many natural limiters like the lack of land or resources. Most of the industries in the west are based on IP, and labor is moved to the third world. So I doubt it's true in the US. Your costs are due to patents and other such things rather than due to the lack of land.
kyralis 7y ago
And yet not a single one of those covers the industries discussed in the article. Regulatory capture can absolutely lead to monopolies, but to claim that "all American monopolies are due to protection policies" is incorrect. Monopolies arise naturally in quite a number of sectors where there are natural barriers to entry. Those barriers can be initial startup costs (ie, wired communications), limited customer bases for niche products such that only one company can be economically supported, or other purely economic reasons.
- ernst_klim 7y ago
  >Those barriers can be initial startup costs (ie, wired communications), limited customer bases for niche products such that only one company can be economically supported, or other purely economic reasons. Yeah, that's why the number of "natural monopolies" is a tiny fraction of all monopolies exist. Could you list at least 10 american natural monopolies?
  - mrep 7y ago
    All social networks tend to be natural monopolies in their niche. Utilities tend to also be ones. What monopolies are you thinking of that aren't natural monopolies. I cannot think of any products/goods/services off the top of my head in which there is only one company offering a version of said product/good/service.
  - AnthonyMouse 7y ago
    > Yeah, that's why the number of "natural monopolies" is a tiny fraction of all monopolies exist. Natural monopolies are also not as tough as the incumbents want you to think they are. If you have a sufficiently crappy water company (i.e. prices are more than double the cost of an efficient operator), it's not totally infeasible that someone else could put in a competing water main, do a better job and take half their customers. Then both companies would have to charge twice as much per customer as an efficient monopolist would to cover costs, but that still may be less than what an inefficient monopolist (i.e. the incumbent) would charge. So there's an upper bound for how bad they can get in an unregulated environment. But having a competitor show up is a catastrophe for the incumbent. If an efficient monopolist can provide service for $50,000/street but their mismanagement causes their costs to be $150,000/street, a new competitor that shows up with costs of $50,000/street can match the incumbent's price, take half their customers and still turn a tidy profit. But losing half their customers would bankrupt the inefficient incumbent due to their higher costs -- and that creates even more incentive for someone to do it, because then they can expect to ultimately gain 100% of the customers. The result is that the incumbents lobby hard for rules that either establish a statutory monopoly or otherwise make it as difficult as possible for anyone to challenge them. Because the barriers to entry are higher than in most other industries, but so is the cost to the incumbent of anyone clearing them, so they rely even more than other industries on the government to impair competition.
cmurf 7y ago
For me to have 100% freedom of my property, it must be legal for me to bribe government officials, foreign and domestic, in order to gain an advantage. That's certainly anti-competitive behavior. Competition law, consumer protection law, absolutely limits freedom of property. You don't get to say anything you want about the merits of your product. You don't get to artificially create scarcity in order to drive up prices. To have 100% freedom using my property however I want, I can commit fraud. Clearly anti-fraud laws are in conflict with that. The world and the US had monopolies well before there were strong regulatory regimes. Businesses variably ask for regulation to give them more legitimacy when they've betrayed trust, and they ask for regulation to create barriers to market entry by competitors, and so on. I disagree all of the problems are new or that they exist only because of government regulation. The pure free market nonsense is exactly that, nonsense.
- ernst_klim 7y ago
  >For me to have 100% freedom of my property, it must be legal for me to bribe government officials, foreign and domestic, in order to gain an advantage. So for you to have 100% freedom of your property mean to let the government to do whatever it wants with your property if somebody bribed it? >well before there were strong regulatory regimes. When, exactly, were times before there were strong regulatory regimes? You know that monarchies of the past were significantly more invasive than the contemporary liberal democracies, right?
  - cmurf 7y ago
    No, I mean to say the notion of having 100% freedom of one's property is delusional. It's socially unworkable. You don't even have to go into the distant past to find an example of an unregulated industry. Payday lenders. https://www.responsiblelending.org/research-publication/map-us-payday-interest-rates https://www.responsiblelending.org/research-publication/map-...
  - sandworm101 7y ago
    >> You know that monarchies of the past were significantly more invasive than the contemporary liberal democracies, right? "By 1775, the British government was consuming one-fifth of its citizens’ GDP, while New Englanders were only paying between 1 and 2 percent of their income in taxes." https://foreignpolicy.com/2012/07/03/tea-taxes-and-the-revolution/ https://foreignpolicy.com/2012/07/03/tea-taxes-and-the-revol... The level of invasion is hard to equate given the centuries, but safe to say that pre-revolution Americans paid far far less in tax. And there weren't police officers like today. I'd say, for the common man in america, the pre-revolution monarchy was much less invasive than our government today.
sandworm101 7y ago
>> All the american monopolies are due to protection policies defending them from the competition, i.e. due to the government's interventions. Monopolies were a thing long before the united states was a thing. They have existed in all ares of human endeavor, under every form of government. It is unfair to say that "all" of them come from current government policies.
- ernst_klim 7y ago
  >Monopolies were a thing long before the united states was a thing. Before the united states was a thing an average government was significantly more invasive than the contemporary one. A few hundred years ago a huge bunch of big biz were simply patronized by a king, sure the were monopolies. Back in the days a monopoly right was a norm rather than an exception.
  - throwaway2048 7y ago
    The power of the US state in terms of direct impact on citizen's lives is vastly higher than any king ever was. Kings at best held power in large towns, which were controlled by their vassals (with their own agenda and autonomy), to the average person and their wares, who was king, or whatever his polices were made next to no difference.
    - ernst_klim 7y ago
      >The power of the US state in terms of direct impact on citizen's lives is vastly higher than any king ever was. Yeah, no. The kings could simply deprive you from your busyness without any trial. They could simply prohibit you to do busyness without any law, since their word was the law. They granted monopoly rights to close and loyal people, so that the whole industry could be subjugated to a single person because he was granted a monopoly right. https://en.wikipedia.org/wiki/History_of_copyright_law#Early.. https://en.wikipedia.org/wiki/History_of_copyright_law#Early.... >Early copyright privileges were called "monopolies," particularly during the reign of Queen Elizabeth, who frequently gave grants of monopolies in articles of common use, such as salt, leather, coal, soap, cards, beer, and wine. The practice was continued until the Statute of Monopolies was enacted in 1623, ending most monopolies, with certain exceptions, such as patents; after 1623, grants of Letters patent to publishers became common. It's ridiculous to compare a contemporary liberal democracy to a monarchy in terms of interventionism.

andrekandre 7y ago

so does that mean that googles search monopoly, or amazons almost soon-to-be monopoly are cause by the govt? what about classic monopolies like standard oil or northern securities company? isn’t it more like monopolies that are allowed to survive do so by the ‘protection policies’ of the govt? so while i do agree fcc, fda, faa are run by corporate shills, back in the days of near zero regulations huge monopolies continued to walk the earth until broken up... and breaking up monopolies is part of regulation

ernst_klim 7y ago
A company could achieve quite a big market share, but it's nearly impossible to hold it for a longer period of time without a government's protection. It's a simple common sense: either you continue to provide the best service, and gain nothing from your market share, or you start to milk the consumers to squeeze more profits. The greed would simply mandate the latter strategy, hence monopolies don't last. >what about classic monopolies like standard oil or northern securities company? The former wasn't a monopoly at the time of anti-trust case. >Standard Oil’s share of the market had declined from close to 90 percent in the late 1800s to about 65 percent at the time of the court’s ruling The latter was operational for how long, less than a year? >so does that mean that googles search monopoly, or amazons almost soon-to-be monopoly are cause by the govt? https://www.bloomberg.com/news/articles/2019-01-22/google-set-2018-lobbying-record-as-washington-techlash-expands https://www.bloomberg.com/news/articles/2019-01-22/google-se... >isn’t it more like monopolies that are allowed to survive do so by the ‘protection policies’ of the govt? No, it's the monopolies which actively exploit the government, especially amazon. >back in the days of near zero regulations huge monopolies continued to walk the earth Examples? For example before the deregulation, there were only 6 breweries in the whole US. After deregulation their number grew. https://www.youtube.com/watch?v=2E3bPU0g8SA https://www.youtube.com/watch?v=2E3bPU0g8SA Regulations are burden: they increase the entering threshold leading to monopolization. You also need a regulatory agency, which is either run by bureaucrats who don't understand much in the industry (hence not adequate laws) or the industry people (hence regulatory capture). And anti-trust is no different here, the standard oil history is a great example of how it punished a non-monopoly.
- andrekandre 7y ago
  what do you feel is the best way to prevent monopolies forming? the way i see it, access to capital is a huge barrier for many potential competitors and it may take many decades for a natural monopoly to fade, all the while the population suffers.... (just to be clear, i’m not necessarily for burdensome regulation, but things like environmental degradation, predatory financial speculation (see post glass-steagal deregulation and 2007) and natural barriers to competition such as capital, land etc make it difficult for me to believe in complete laissez-faire)
  - ernst_klim 7y ago
    > what do you feel is the best way to prevent monopolies forming? You don't need to prevent them. If a company provides an outstanding quality of service, it would have a big market share for some time, and that's fine. What's bad is when people are suffering due to monopoly. But in this case laissez-faire is enough, because suffering causes the demand, the demand causes the supply, provided by competitors. > the way i see it, access to capital is a huge barrier for many potential competitors Most barriers in the west are inflated by the industry and government. Take the big pharma as an example, the barrier is due to the regulations and patents (and FDA), purely. Russian and Indian companies could produce and sometimes even develop drugs for a tiny fraction of costs that are usual in US. Now I do understand that patents may incentivize investments in R&D, but they also incentivize monopolies and oligopolies being the monopoly right. >it may take many decades for a natural monopoly to fade If the population suffers, it create the supply for the better service. If such a supply exists, what prevents a demand? It couldn't be any financial barrier, because it's not a rocket science to attract investments when so much of a demand exists. >and natural barriers to competition such as capital, land Capital is not a barrier, especially in US, where investment climate is so good. Land is not an important resource for a vast majority of contemporary production, we are not living in agricultural society. I don't think that nowadays there exist many natural limiters like the lack of land or resources. Most of the industries in the west are based on IP, and labor is moved to the third world. So I doubt it's true in the US. Your costs are due to patents and other such things rather than due to the lack of land.

kyralis 7y ago

And yet not a single one of those covers the industries discussed in the article. Regulatory capture can absolutely lead to monopolies, but to claim that "all American monopolies are due to protection policies" is incorrect. Monopolies arise naturally in quite a number of sectors where there are natural barriers to entry. Those barriers can be initial startup costs (ie, wired communications), limited customer bases for niche products such that only one company can be economically supported, or other purely economic reasons.

ernst_klim 7y ago
>Those barriers can be initial startup costs (ie, wired communications), limited customer bases for niche products such that only one company can be economically supported, or other purely economic reasons. Yeah, that's why the number of "natural monopolies" is a tiny fraction of all monopolies exist. Could you list at least 10 american natural monopolies?
- mrep 7y ago
  All social networks tend to be natural monopolies in their niche. Utilities tend to also be ones. What monopolies are you thinking of that aren't natural monopolies. I cannot think of any products/goods/services off the top of my head in which there is only one company offering a version of said product/good/service.
- AnthonyMouse 7y ago
  > Yeah, that's why the number of "natural monopolies" is a tiny fraction of all monopolies exist. Natural monopolies are also not as tough as the incumbents want you to think they are. If you have a sufficiently crappy water company (i.e. prices are more than double the cost of an efficient operator), it's not totally infeasible that someone else could put in a competing water main, do a better job and take half their customers. Then both companies would have to charge twice as much per customer as an efficient monopolist would to cover costs, but that still may be less than what an inefficient monopolist (i.e. the incumbent) would charge. So there's an upper bound for how bad they can get in an unregulated environment. But having a competitor show up is a catastrophe for the incumbent. If an efficient monopolist can provide service for $50,000/street but their mismanagement causes their costs to be $150,000/street, a new competitor that shows up with costs of $50,000/street can match the incumbent's price, take half their customers and still turn a tidy profit. But losing half their customers would bankrupt the inefficient incumbent due to their higher costs -- and that creates even more incentive for someone to do it, because then they can expect to ultimately gain 100% of the customers. The result is that the incumbents lobby hard for rules that either establish a statutory monopoly or otherwise make it as difficult as possible for anyone to challenge them. Because the barriers to entry are higher than in most other industries, but so is the cost to the incumbent of anyone clearing them, so they rely even more than other industries on the government to impair competition.

cmurf 7y ago

For me to have 100% freedom of my property, it must be legal for me to bribe government officials, foreign and domestic, in order to gain an advantage. That's certainly anti-competitive behavior. Competition law, consumer protection law, absolutely limits freedom of property. You don't get to say anything you want about the merits of your product. You don't get to artificially create scarcity in order to drive up prices. To have 100% freedom using my property however I want, I can commit fraud. Clearly anti-fraud laws are in conflict with that. The world and the US had monopolies well before there were strong regulatory regimes. Businesses variably ask for regulation to give them more legitimacy when they've betrayed trust, and they ask for regulation to create barriers to market entry by competitors, and so on. I disagree all of the problems are new or that they exist only because of government regulation. The pure free market nonsense is exactly that, nonsense.

ernst_klim 7y ago
>For me to have 100% freedom of my property, it must be legal for me to bribe government officials, foreign and domestic, in order to gain an advantage. So for you to have 100% freedom of your property mean to let the government to do whatever it wants with your property if somebody bribed it? >well before there were strong regulatory regimes. When, exactly, were times before there were strong regulatory regimes? You know that monarchies of the past were significantly more invasive than the contemporary liberal democracies, right?
- cmurf 7y ago
  No, I mean to say the notion of having 100% freedom of one's property is delusional. It's socially unworkable. You don't even have to go into the distant past to find an example of an unregulated industry. Payday lenders. https://www.responsiblelending.org/research-publication/map-us-payday-interest-rates https://www.responsiblelending.org/research-publication/map-...
- sandworm101 7y ago
  >> You know that monarchies of the past were significantly more invasive than the contemporary liberal democracies, right? "By 1775, the British government was consuming one-fifth of its citizens’ GDP, while New Englanders were only paying between 1 and 2 percent of their income in taxes." https://foreignpolicy.com/2012/07/03/tea-taxes-and-the-revolution/ https://foreignpolicy.com/2012/07/03/tea-taxes-and-the-revol... The level of invasion is hard to equate given the centuries, but safe to say that pre-revolution Americans paid far far less in tax. And there weren't police officers like today. I'd say, for the common man in america, the pre-revolution monarchy was much less invasive than our government today.

sandworm101 7y ago

>> All the american monopolies are due to protection policies defending them from the competition, i.e. due to the government's interventions. Monopolies were a thing long before the united states was a thing. They have existed in all ares of human endeavor, under every form of government. It is unfair to say that "all" of them come from current government policies.

ernst_klim 7y ago
>Monopolies were a thing long before the united states was a thing. Before the united states was a thing an average government was significantly more invasive than the contemporary one. A few hundred years ago a huge bunch of big biz were simply patronized by a king, sure the were monopolies. Back in the days a monopoly right was a norm rather than an exception.
- throwaway2048 7y ago
  The power of the US state in terms of direct impact on citizen's lives is vastly higher than any king ever was. Kings at best held power in large towns, which were controlled by their vassals (with their own agenda and autonomy), to the average person and their wares, who was king, or whatever his polices were made next to no difference.
  - ernst_klim 7y ago
    >The power of the US state in terms of direct impact on citizen's lives is vastly higher than any king ever was. Yeah, no. The kings could simply deprive you from your busyness without any trial. They could simply prohibit you to do busyness without any law, since their word was the law. They granted monopoly rights to close and loyal people, so that the whole industry could be subjugated to a single person because he was granted a monopoly right. https://en.wikipedia.org/wiki/History_of_copyright_law#Early.. https://en.wikipedia.org/wiki/History_of_copyright_law#Early.... >Early copyright privileges were called "monopolies," particularly during the reign of Queen Elizabeth, who frequently gave grants of monopolies in articles of common use, such as salt, leather, coal, soap, cards, beer, and wine. The practice was continued until the Statute of Monopolies was enacted in 1623, ending most monopolies, with certain exceptions, such as patents; after 1623, grants of Letters patent to publishers became common. It's ridiculous to compare a contemporary liberal democracy to a monarchy in terms of interventionism.