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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 s

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.
  - majormajor 7y ago
    > 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. What level of suffering is worth preventing instead of waiting for the market to - hopefully, eventually - correct itself? While meanwhile the incumbent is using their considerable wealth and influence to suppress any new competition. I'm positive you have a line, I'm curious where you draw it.
    - josinalvo 7y ago

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.
- majormajor 7y ago
  > 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. What level of suffering is worth preventing instead of waiting for the market to - hopefully, eventually - correct itself? While meanwhile the incumbent is using their considerable wealth and influence to suppress any new competition. I'm positive you have a line, I'm curious where you draw it.
  - josinalvo 7y ago