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1. There was no convenient "just-so" story to push onto consumers to justify the prices. Now there suddenly was (COVID + Supply bottlenecks, which media gladly

1. There was no convenient "just-so" story to push onto consumers to justify the prices. Now there suddenly was (COVID + Supply bottlenecks, which media gladly regurgitated every week for 3 years) 2. Barriers to entry, high startup capital costs (due to high prices of everything), having to compete against implicitly colluding incumbent market players. 3. Under capitalism, ALL industries have conditions that favor monopoly. It arises from regulatory capture and economies of scale naturally. It is the end state of any industry. 4. They aren't. More & smaller firms are a market with perfect competition, but perfect competition also means there's no profit, because revenue = costs. Under this scenario, there will be very little innovation. All these questions are trivially answered by any Econ undergrad who was actually paying attention during lectures.

s1artibartfast 3y ago
Im going to ignore your unnecessary snark and engage with your points. 1) I think your answer for 1 seems most supported and I dont disagree. 2) If incumbents have sufficiently high margins, eventually there will be enough incentive to overcome startup costs, and compete against collusion. 3) I agree that reg capture and economies of scale favor large incumbents. 4) I think this is the interesting part. are you agreeing that consumer prices are lowest under a monopoly with high margins, but not high enough to enable competition from firms at lower scale ( setting aside issues regulatory capture)? Do you think this is the scenario we are living in? I'm pretty skeptical myself, because in my experience, many industries also have inverse efficiencies of scale that kick in. This means small firms can compete on the margin, and are often bought out by larger but less efficient firms. I don't think that perfect no-profit competition is realistic model for the world because markets arent static and competition doesn't adjust instantly. That said, you seem to think that perfect competition has little innovation. Are you implying that monopolized markets have more innovation?
gottorf 3y ago
> Under capitalism, ALL industries have conditions that favor monopoly. It arises from regulatory capture and economies of scale naturally. It is the end state of any industry. Regulatory capture is orthogonal to capitalism. In fact, many of the loudest cheerleaders for capitalism also advocate for fewer regulations, in large part to avoid that exact problem. Diseconomies of scale are real. There's no evidence to suggest that the terminal state of any industry is a monopoly.

s1artibartfast 3y ago

Im going to ignore your unnecessary snark and engage with your points. 1) I think your answer for 1 seems most supported and I dont disagree. 2) If incumbents have sufficiently high margins, eventually there will be enough incentive to overcome startup costs, and compete against collusion. 3) I agree that reg capture and economies of scale favor large incumbents. 4) I think this is the interesting part. are you agreeing that consumer prices are lowest under a monopoly with high margins, but not high enough to enable competition from firms at lower scale ( setting aside issues regulatory capture)? Do you think this is the scenario we are living in? I'm pretty skeptical myself, because in my experience, many industries also have inverse efficiencies of scale that kick in. This means small firms can compete on the margin, and are often bought out by larger but less efficient firms. I don't think that perfect no-profit competition is realistic model for the world because markets arent static and competition doesn't adjust instantly. That said, you seem to think that perfect competition has little innovation. Are you implying that monopolized markets have more innovation?

gottorf 3y ago

> Under capitalism, ALL industries have conditions that favor monopoly. It arises from regulatory capture and economies of scale naturally. It is the end state of any industry. Regulatory capture is orthogonal to capitalism. In fact, many of the loudest cheerleaders for capitalism also advocate for fewer regulations, in large part to avoid that exact problem. Diseconomies of scale are real. There's no evidence to suggest that the terminal state of any industry is a monopoly.