4 ms·

The natural order of the free market is towards monopolies or cartels. Why compete when you can merge or buy the startup before they get big enough to bother y

The natural order of the free market is towards monopolies or cartels. Why compete when you can merge or buy the startup before they get big enough to bother you? If you are the only one offering what they need then they have no choice, do they? Have you figured out the answer to that?

pdonis 3y ago
> The natural order of the free market is towards monopolies or cartels. I don't know where you're getting that from. Monopolies are almost always created by governments; indeed, the original meaning of the word "monopoly" was an exclusive privilege granted by the king to sell a particular product. Cartels in free markets don't last because there is a strong incentive for cartel members to defect, since they can increase their profits by doing so; it takes governmental agreements (such as the Middle Eastern oil cartel upheld by the governments of the countries involved) to prevent such defection. > Why compete when you can merge or buy the startup before they get big enough to bother you? If the startup is a real competitor, in a free market its owners will be able to realize more upside by competing with you than by being bought by you. > If you are the only one offering what they need then they have no choice, do they? In a free market this won't happen: if there is enough demand, it is always in someone's interest to start a competing producer. > Have you figured out the answer to that? Historically, the reason the obvious free market things I describe don't always happen is that governments mess with markets, making them not free. So the obvious answer is to not do that.
- defrost 3y ago
  The US Government created Microsoft Corporation as the first company to hold a pure monopoly position on personal computer operating systems? And then prosecuted them under US antitrust legislation? Standard Oil Company and the American Tobacco Company were also US Government monopolies? That sound a little off. Perhaps your use of "almost always" needs to be dialed back a notch .. or a lot.
  - scarface_74 3y ago
    And the antitrust lawsuit had absolutely no effect on MS’s desktop market share. It was the free market that allowed Apple and Google to usurp Microsoft’s influence via mobile and the web.
    - deleted 3y ago
      [deleted]
    - defrost 3y ago
      Your comment has little to do with the nonsense being spouted about monopolies almost always being due to government. "Free market" isn't a particularly well defined concept given the broad range of its interpretation and use, eg: Churchill's "Land is the mother of all monopoly" comment wrt land ownership dragging down a truly 'free' market., etc.
      - scarface_74 3y ago
        Your quote also has little to do with Google. There is no lack of real estate on the internet.
  - pdonis 3y ago
    Microsoft didn't have a monopoly on PC operating systems. They did get gifted a huge market share by IBM making not one, but two bonehead moves, first giving MS the license to DOS and then dawdling on OS/2 long enough for Bill Gates to lose patience and ship Windows 3. But MS never had a monopoly. Apple shipped PCs with their own OS. IBM had their own version of DOS and shipped PCs with it. There were even still CP/M machines around for a while. And there was Atari and Commodore, each of which shipped their own PCs with their own OSes. Then Unix variants began to be available for PCs. Standard Oil wasn't a monopoly either. There were other oil companies in the business. But Standard Oil was selling oil, at a profit, at lower prices and in greater quantities than any of its competitors. The competitors didn't like that and got the government to break up Standard Oil under antitrust law. Which, as I've said, made things worse for customers. In other words, if the competition simply doesn't compete very well, or makes bonehead decisions, a company can get a large market share, yes. But "large market share" is not the same as "monopoly". If you want a better example of government created monopoly, look at ISPs in many areas of the US, where for many years state and local governments gave one company exclusive rights to sell Internet access in particular areas. With the expected result that Internet access sucked as compared to areas where there was competition. Much of that has gone away now, and Internet access as a result is much improved in those areas.
- Eisenstein 3y ago
  These are fantasies. > Historically, the reason the obvious free market things I describe don't always happen is that governments mess with markets, making them not free. So the obvious answer is to not do that. We tried that in the 1800s. Have you read any history?
  - scarface_74 3y ago
    Yes because absolutely nothing has changed since the 1800s.
  - pdonis 3y ago
    > We tried that in the 1800s. Really? Governments did nothing to interfere with markets in the 1800s? Have you read any history?
    - Eisenstein 3y ago
      It must be nice having such a great escape hatch you can use whenever your ideology is questioned ("government did it") and when confronted you can just use it again. Unfortunately the world isn't so simple. I am not sure how you reconcile reality with your dogma, as you can literally see monopolies forming in real time, but I guess throwing the government boogie man in works well enough for you that no attempt at reason will break through it.
      - pdonis 3y ago
        It must be nice not having to actually address the substance of what you are responding to.
        Eisenstein 3y ago
        How do you address the substance of a fantasy? You are ideologically opposed to government and have a quasi religious faith in the free market fixing all problems without intervention. If the market cannot be intervened with then it is doing its work as a 'force' and might as well be The Holy Spirit. You state demonstrably false things or split definitions down to a hair (yes -- the only REAL monopolies have been government mandated, because by definition the only way to force all competitors from competing is to make it illegal) but I don't think people care about technically correct when they are working in company towns for scrip and their kids fall into coal crushers while working because their are no laws protecting people, just business. Fun fact: the first tactical bombing from an airplane was on striking mine workers in the USA.

pdonis 3y ago

> The natural order of the free market is towards monopolies or cartels. I don't know where you're getting that from. Monopolies are almost always created by governments; indeed, the original meaning of the word "monopoly" was an exclusive privilege granted by the king to sell a particular product. Cartels in free markets don't last because there is a strong incentive for cartel members to defect, since they can increase their profits by doing so; it takes governmental agreements (such as the Middle Eastern oil cartel upheld by the governments of the countries involved) to prevent such defection. > Why compete when you can merge or buy the startup before they get big enough to bother you? If the startup is a real competitor, in a free market its owners will be able to realize more upside by competing with you than by being bought by you. > If you are the only one offering what they need then they have no choice, do they? In a free market this won't happen: if there is enough demand, it is always in someone's interest to start a competing producer. > Have you figured out the answer to that? Historically, the reason the obvious free market things I describe don't always happen is that governments mess with markets, making them not free. So the obvious answer is to not do that.

defrost 3y ago
The US Government created Microsoft Corporation as the first company to hold a pure monopoly position on personal computer operating systems? And then prosecuted them under US antitrust legislation? Standard Oil Company and the American Tobacco Company were also US Government monopolies? That sound a little off. Perhaps your use of "almost always" needs to be dialed back a notch .. or a lot.
- scarface_74 3y ago
  And the antitrust lawsuit had absolutely no effect on MS’s desktop market share. It was the free market that allowed Apple and Google to usurp Microsoft’s influence via mobile and the web.
  - deleted 3y ago
    [deleted]
  - defrost 3y ago
    Your comment has little to do with the nonsense being spouted about monopolies almost always being due to government. "Free market" isn't a particularly well defined concept given the broad range of its interpretation and use, eg: Churchill's "Land is the mother of all monopoly" comment wrt land ownership dragging down a truly 'free' market., etc.
    - scarface_74 3y ago
      Your quote also has little to do with Google. There is no lack of real estate on the internet.
- pdonis 3y ago
  Microsoft didn't have a monopoly on PC operating systems. They did get gifted a huge market share by IBM making not one, but two bonehead moves, first giving MS the license to DOS and then dawdling on OS/2 long enough for Bill Gates to lose patience and ship Windows 3. But MS never had a monopoly. Apple shipped PCs with their own OS. IBM had their own version of DOS and shipped PCs with it. There were even still CP/M machines around for a while. And there was Atari and Commodore, each of which shipped their own PCs with their own OSes. Then Unix variants began to be available for PCs. Standard Oil wasn't a monopoly either. There were other oil companies in the business. But Standard Oil was selling oil, at a profit, at lower prices and in greater quantities than any of its competitors. The competitors didn't like that and got the government to break up Standard Oil under antitrust law. Which, as I've said, made things worse for customers. In other words, if the competition simply doesn't compete very well, or makes bonehead decisions, a company can get a large market share, yes. But "large market share" is not the same as "monopoly". If you want a better example of government created monopoly, look at ISPs in many areas of the US, where for many years state and local governments gave one company exclusive rights to sell Internet access in particular areas. With the expected result that Internet access sucked as compared to areas where there was competition. Much of that has gone away now, and Internet access as a result is much improved in those areas.
Eisenstein 3y ago
These are fantasies. > Historically, the reason the obvious free market things I describe don't always happen is that governments mess with markets, making them not free. So the obvious answer is to not do that. We tried that in the 1800s. Have you read any history?
- scarface_74 3y ago
  Yes because absolutely nothing has changed since the 1800s.
- pdonis 3y ago
  > We tried that in the 1800s. Really? Governments did nothing to interfere with markets in the 1800s? Have you read any history?
  - Eisenstein 3y ago
    It must be nice having such a great escape hatch you can use whenever your ideology is questioned ("government did it") and when confronted you can just use it again. Unfortunately the world isn't so simple. I am not sure how you reconcile reality with your dogma, as you can literally see monopolies forming in real time, but I guess throwing the government boogie man in works well enough for you that no attempt at reason will break through it.
    - pdonis 3y ago
      It must be nice not having to actually address the substance of what you are responding to.
      - Eisenstein 3y ago
        How do you address the substance of a fantasy? You are ideologically opposed to government and have a quasi religious faith in the free market fixing all problems without intervention. If the market cannot be intervened with then it is doing its work as a 'force' and might as well be The Holy Spirit. You state demonstrably false things or split definitions down to a hair (yes -- the only REAL monopolies have been government mandated, because by definition the only way to force all competitors from competing is to make it illegal) but I don't think people care about technically correct when they are working in company towns for scrip and their kids fall into coal crushers while working because their are no laws protecting people, just business. Fun fact: the first tactical bombing from an airplane was on striking mine workers in the USA.