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Antitrust law provides some interesting insight into the question IMO. It was established because laissez faire economics failed to prevent monopolies. Instead,
by m0th87 16y ago
Antitrust law provides some interesting insight into the question IMO. It was established because laissez faire economics failed to prevent monopolies. Instead, a carefully crafted regulation supported capitalism.
I think true capitalism can't arise in a vacuum; it needs a regulatory support structure for enforcement.
- mseebach 16y agoIt's well agreed that at least property rights and strong rule of law are prerequisites for capitalism. Most anarcho-capitalist discussions I've heard seems to evolve around how exactly those two properties would come to exist in a state-less society.
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- xenophanes 16y agoYes but that rule of law wouldn't have any anti-trust laws in it, right? So I'm not sure how this is an answer to the claim that capitalism creates monopolies so anti-trust laws are needed. As an anarcho-capitalist, I think we need to convince people that capitalism doesn't cause problematic monopolies, Governments cause those.
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- kiba 16y agoAnd I heard economists saying anti-trust laws are a joke that usually hurt smaller business over large. Who watch the watcher? How those watcher of watchers determine if the watcher in question is doing its job?
- CPops 16y ago"Antitrust law provides some interesting insight into the question IMO. It was established because laissez faire economics failed to prevent monopolies." This is obviously false, both from a logical and historical view. A monopoly cannot exist in a free market as no company, no matter how successful, can actually restrict entry into any given market without the government banning entry into that market. This is accomplished though various legal means including licenses, trade barriers, so-called "intellectual property" protections, and other tactics. Without the barriers for entry into any market provided by government, establishment of a monopoly on any desired service would be impossible. Now, you might cite some historical examples like Standard Oil and the like as examples of why monopoly protections are needed, but this standard example only illustrates my case. The price of a gallon of oil, for example, was around 30 cents in 1870 and fell to around 6 cents at the time of the anti-trust trial. And their market share was continuously dropping despite their supposed monopoly.
- OpieCunningham 16y agoNot sure why you were down voted on that. You're correct in my view that laissez faire economics doesn't promote monopolies. There are other reasons laissez faire economics is a poor economic model, such as safety.
- m_myers 16y agoI would argue that safety regulations are not at odds with the laissez-faire model. Laissez-faire is not the same as anarchy; injuring another person -- including through faulty products or workplace hazards -- should still be punishable.
- fexl 16y agoAlso, on the subject of safety in the free market, think Underwriters Laboratory and Consumer Reports. People don't want coffee makers that burst into flames or cars that roll over.
- krakensden 16y agoUnderwriters Laboratory and Consumer Reports seem like special cases. Don't most private quality control organizations go the way of Yelp, the BBB, the BSA, etc- questionable ratings and bad economic incentives?
- fexl 16y agoI'll go ahead and add Standard and Poor's, Moody's, the SEC, and the FDA to your list of bad examples, since poor quality and bad incentives can arise with either voluntary or coerced funding. But at least with voluntary funding you can take your business elsewhere, or even compete.
- OpieCunningham 16y agoPunishable by what? The slow dissemination of information resulting in markets driving down the viability of a company that produced a faulty product? How many injuries are necessary before that information hits a critical mass? Let's take one specific example, though the principle can be applied to most industries: child car seats. Presently, govt regulations require very specific quality and manufacturing standards and thorough testing before a child safety seat can be sold on the market. Without those regulations in place, how man children need to die before third party organizations can disseminate product failure information wide enough that the responsible company suffers the consequences?
- xenophanes 16y agoYou're rewriting history. Take the railroads. Railroads that were working with the government made transcontinental tracks first. The first private one came after. Laissez faire economics didn't get there first and create a bunch of monopolies, they came by and large from corrupt politicians being bribed to pass laws to support them. (Politicians were really corrupt back then. For example they would commonly threaten to pass nasty laws to mess up railroads just to get bribed to stop. It's amazing how bad it was, and how far we've come that today's politicians aren't so corrupt like that (partly the change is due to technology making it harder to hide what you do)).
- frossie 16y agoI think true capitalism can't arise in a vacuum; it needs a regulatory support structure for enforcement. cf. The Value of Nothing by Raj Patel in which he makes the point that we all agree as a society how trade is conducted, and we can agree to do it one way or another way. For example we now agree humans can't be sold and that land can, but at other times the reverse was the case. Trade does not happen in a social vacuum.