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2) Is a monopoly or a perfectly competitive business better for societal progress? In theory, a monopoloy would be because you can make more profit and constan
by aty268 7y ago
2) Is a monopoly or a perfectly competitive business better for societal progress?
In theory, a monopoloy would be because you can make more profit and constantly reinvest more than any competitor into making better products and holding your monopoly.
Unfortunately, that doesn't happen in practice, because monopolies tend to buy competitors in order to stifle competition rather than reinvesting and building a better product.
So I think acquiring competitors tends to inhibit progress because you are wasting money that you could be reinvesting into building a better product for society.
- gradys 7y agoThe flip side is that if companies are making less profit, there might be more consumer surplus, leading to more savings (which can also be reinvested in the economy) or a higher standard of living.
- aty268 7y agoYes, but the average person with savings isn't going to create wealth in any way that a business can with that money. Most especially if that money is "saved" in stocks or bonds. This might be better for people in the short term, but we are talking about sociatal progress not short term benefits. But there's the obviously counterexamples of companies hoarding billions and not paying dividends because they don't know what to do with it.