3 ms·

Can you give an example of a monopoly that has been brought about and maintained by capitalism - i.e. not maintained by organized crime or the power of the gove

by injb 7y ago

Can you give an example of a monopoly that has been brought about and maintained by capitalism - i.e. not maintained by organized crime or the power of the government, but by the principles of free market capitalism alone?

karatestomp 7y ago
Got any examples of capitalism that aren't maintained by a government? [EDIT] OK that was a bit glib. My point is things are a lot more complicated than "capitalism does this, government does that" and the two are essentially inseparable. Further this entire thread is full of "markets = capitalism" which is missing the mark—tendencies toward free market policies are a defining feature of capitalism, but free markets per se aren't identical to capitalism.
- hfdh434535 7y ago
  Good point, and we need to recognize that every so-called free market still relies on governments to enforce the rules (to enforce contracts, to issue currency, to protect against fraud, etc). If governments disappeared tomorrow, we would not have a free market utopia spring up in it's place. Instead we'd have a no-rules situation where the powerful could take advantage of the weak. Some other system, potentially worse than what we already have, would fill the power vacuum.
  - injb 7y ago
    Well I agree that governments can do some beneficial things. But there's a few problems with what you're saying here (and I hope I'm not taking you too literally): firstly, all the rules you list can be handled with alternatives. Secondly, the fact that the sudden disappearance of government would not lead to a utopia doesn't mean that governments are fundamentally needed (although they might be). As an analogy: if crude oil disappeared tomorrow, we would not have a renewable energy utopia - we'd have a disaster. Does that mean that there's no alternative to crude oil? Of course not. Finally, a "situation where the powerful could take advantage of the weak" is really just the situation that we have now, and must always have. It's really a tautology.
    - hfdh434535 7y ago
      I apologize for not being clear enough, and I think I misread your intentions. There are people on HN who believe the government could be abolished tomorrow and replaced with private services, including a private military force, and that this would make everyone more free, since the invisible hand of the market would do the job of protecting the rights of the ordinary people. I mistook you for one of those people. Governments aren't fundamentally needed per se to create a free market. But rules are needed. And whatever system we have to enforce those rules would resemble a defacto government. How that governments power is distributed, who's interests it represents, and how far it goes in regulating the market may vary. Without someone enforcing rules to keep monopolies in check, I think those monopolies would become defacto governments. And they wouldn't be democratic. This is what I mean (but did not carefully express) when I said that some government intervention in the markets are needed to prevent the powerful from take advantage of the weak. (And it can go the other way too... governments tilting the scale in favor of existing powerful interests.)
hfdh434535 7y ago
Natural monopolies, by definition, arise from natural market forces, and thus do not rely on government intervention or unfair business practices to suppress competition. (That doesn't mean natural monopolies always compete fairly or never engage in regulatory capture. Only that these are not necessary for them to become monopolies.) Railroads are a commonly cited example. Today, the network effects of digital platforms are thought to give rise to monopolies (or at least high market concentration). People who usually ask "give me an example of a monopoly not maintained by the government" are usually not asking in good faith. Many laissez faire capitalists explain away natural monopolies, or pretend they don't exist. So perhaps you expected this answer, and are already prepared to dismiss it.
allemagne 7y ago
Do you consider Microsoft's monopoly in the 90s to be maintained by the power of the government? Would that be different from the way that governments normally maintain a regulatory environment for businesses to expand? Can free market capitalism even exist without the property enforcement that what we'd consider as organized crime or governments provide?
- injb 7y ago
  Well my first response to this is that I understand "monopoly" to mean a single supplier. That is not the same thing as having a massive share of the market just because a huge majority of people prefer your product to the competition. I believe MS's main products in the 90s were Windows and Office. All these had alternatives (Mac OS or whatever it was called then, StarOffice etc, Lotus Notes etc.) Microsoft products were simply more popular. So what exactly did they have a monopoly on? My second point would be: monopoly or not, it's not clear that they would have maintained the advantage they had. Of course we know that the government intervened, and some people will say that's what broke MS's alleged monopoly, whlile others will say it made no difference, and still others will say that they couldn't have maintained it for long in a free market anyway. We'll never know, since it happened the way it happened, but personally I don't see how the government's actions made the success of Linux, Apple and Google products possible where they weren't before; therefore I find the last argument more convincing - that is, that Microsoft had the jump on everyone, but it was never going to last. A free market doesn't guarantee that there won't be a clear front runner in any given competition.
throwaway43283 7y ago
Would-be monopolists don't particularly enjoy playing by the rules of the game. To crib a quote, it becomes the art of saying "good free market" while you look for a stick. If there's a state, it's natural to try to corrupt it to use its political power. If there is no state or that option looks unappealing, the alternative is to get some political power of the sort that grows out of the barrel of a gun, i.e. to be organized crime. The implication of the question, that the state is necessary to produce a monopoly, fails to give the full picture. It's not as much that the state is necessary, that economic power can eventually be translated into enough force to subvert the rules. In the absence of a state, that force just takes the shape of an authoritarian proto-state, itself.
n4r9 7y ago
I wonder if the Varsity Brand's hold on the cheerleading industry satisfies this? Like all big corporations they use legal means as leverage to suppress competition but other than that it seems like a classic case of one business using dirty tactics to completely take over. https://mattstoller.substack.com/p/this-is-not-a-democracy-its-a-cheerocracy https://mattstoller.substack.com/p/this-is-not-a-democracy-i...
yogthos 7y ago
Amazon today is another example seeing how they account for 90% of online shopping.

by injb 7y ago

karatestomp 7y ago

Got any examples of capitalism that aren't maintained by a government? [EDIT] OK that was a bit glib. My point is things are a lot more complicated than "capitalism does this, government does that" and the two are essentially inseparable. Further this entire thread is full of "markets = capitalism" which is missing the mark—tendencies toward free market policies are a defining feature of capitalism, but free markets per se aren't identical to capitalism.

hfdh434535 7y ago
Good point, and we need to recognize that every so-called free market still relies on governments to enforce the rules (to enforce contracts, to issue currency, to protect against fraud, etc). If governments disappeared tomorrow, we would not have a free market utopia spring up in it's place. Instead we'd have a no-rules situation where the powerful could take advantage of the weak. Some other system, potentially worse than what we already have, would fill the power vacuum.
- injb 7y ago
  Well I agree that governments can do some beneficial things. But there's a few problems with what you're saying here (and I hope I'm not taking you too literally): firstly, all the rules you list can be handled with alternatives. Secondly, the fact that the sudden disappearance of government would not lead to a utopia doesn't mean that governments are fundamentally needed (although they might be). As an analogy: if crude oil disappeared tomorrow, we would not have a renewable energy utopia - we'd have a disaster. Does that mean that there's no alternative to crude oil? Of course not. Finally, a "situation where the powerful could take advantage of the weak" is really just the situation that we have now, and must always have. It's really a tautology.
  - hfdh434535 7y ago
    I apologize for not being clear enough, and I think I misread your intentions. There are people on HN who believe the government could be abolished tomorrow and replaced with private services, including a private military force, and that this would make everyone more free, since the invisible hand of the market would do the job of protecting the rights of the ordinary people. I mistook you for one of those people. Governments aren't fundamentally needed per se to create a free market. But rules are needed. And whatever system we have to enforce those rules would resemble a defacto government. How that governments power is distributed, who's interests it represents, and how far it goes in regulating the market may vary. Without someone enforcing rules to keep monopolies in check, I think those monopolies would become defacto governments. And they wouldn't be democratic. This is what I mean (but did not carefully express) when I said that some government intervention in the markets are needed to prevent the powerful from take advantage of the weak. (And it can go the other way too... governments tilting the scale in favor of existing powerful interests.)

hfdh434535 7y ago

Natural monopolies, by definition, arise from natural market forces, and thus do not rely on government intervention or unfair business practices to suppress competition. (That doesn't mean natural monopolies always compete fairly or never engage in regulatory capture. Only that these are not necessary for them to become monopolies.) Railroads are a commonly cited example. Today, the network effects of digital platforms are thought to give rise to monopolies (or at least high market concentration). People who usually ask "give me an example of a monopoly not maintained by the government" are usually not asking in good faith. Many laissez faire capitalists explain away natural monopolies, or pretend they don't exist. So perhaps you expected this answer, and are already prepared to dismiss it.

allemagne 7y ago

Do you consider Microsoft's monopoly in the 90s to be maintained by the power of the government? Would that be different from the way that governments normally maintain a regulatory environment for businesses to expand? Can free market capitalism even exist without the property enforcement that what we'd consider as organized crime or governments provide?

injb 7y ago
Well my first response to this is that I understand "monopoly" to mean a single supplier. That is not the same thing as having a massive share of the market just because a huge majority of people prefer your product to the competition. I believe MS's main products in the 90s were Windows and Office. All these had alternatives (Mac OS or whatever it was called then, StarOffice etc, Lotus Notes etc.) Microsoft products were simply more popular. So what exactly did they have a monopoly on? My second point would be: monopoly or not, it's not clear that they would have maintained the advantage they had. Of course we know that the government intervened, and some people will say that's what broke MS's alleged monopoly, whlile others will say it made no difference, and still others will say that they couldn't have maintained it for long in a free market anyway. We'll never know, since it happened the way it happened, but personally I don't see how the government's actions made the success of Linux, Apple and Google products possible where they weren't before; therefore I find the last argument more convincing - that is, that Microsoft had the jump on everyone, but it was never going to last. A free market doesn't guarantee that there won't be a clear front runner in any given competition.

throwaway43283 7y ago

Would-be monopolists don't particularly enjoy playing by the rules of the game. To crib a quote, it becomes the art of saying "good free market" while you look for a stick. If there's a state, it's natural to try to corrupt it to use its political power. If there is no state or that option looks unappealing, the alternative is to get some political power of the sort that grows out of the barrel of a gun, i.e. to be organized crime. The implication of the question, that the state is necessary to produce a monopoly, fails to give the full picture. It's not as much that the state is necessary, that economic power can eventually be translated into enough force to subvert the rules. In the absence of a state, that force just takes the shape of an authoritarian proto-state, itself.

n4r9 7y ago

I wonder if the Varsity Brand's hold on the cheerleading industry satisfies this? Like all big corporations they use legal means as leverage to suppress competition but other than that it seems like a classic case of one business using dirty tactics to completely take over. https://mattstoller.substack.com/p/this-is-not-a-democracy-its-a-cheerocracy https://mattstoller.substack.com/p/this-is-not-a-democracy-i...

yogthos 7y ago

Amazon today is another example seeing how they account for 90% of online shopping.