5 ms·

No, governments tend to produce monopolies. Can you find true monopolies in the free market, in the last 100 years, that have lasted for at least 20 years, wit

by Straw 2mo ago

No, governments tend to produce monopolies. Can you find true monopolies in the free market, in the last 100 years, that have lasted for at least 20 years, without some kind of government backing/suppression of competitors? I only know of one. Things only count as monopolies if they have monopoly pricing power; Google is not a monopoly, they cannot even charge 1 cent per search. In practice, despite economies of scale, large companies age and become bloated, inflexible, etc. So there's typically plenty of room for new companies to compete. If a monopolist buys all upstarts, then that creates an even stronger incentive to make competing businesses! You don't even have to succeed in the market, you just have to get bought up! The more they buy out, there stronger incentive there will be to enter the market. No one can do this indefinitely- except with some kind of government support- say a regulation that makes it difficult to enter the market.

vjvjvjvjghv 2mo ago
What you are describing sounds great in theory, but the real world doesn’t work like that. In more and more areas the obstacle to enter a market is not regulations but money.
- Straw 2mo ago
  I'd say exactly the same about antitrust. Can you give an example of a lasting monopoly not backed by some government policy? At any point in the last 150 years?
  - vjvjvjvjghv 2mo ago
    Can you give examples of these government policies?
    - Straw 2mo ago
      Sure. The most straightforward example would be utilities in much of the US. Companies like PG&E are literally granted a monopoly in a region. Another example would be epipens. There is a competitor, but unlike most drugs, if the doctor prescribes you an epipen, the pharmacy can't give you a generic substitute, it must be name brand. Tesla is being heavily protected from Chinese competitors by US auto tariffs. Credit Ratings agencies (in large part responsible for 2008 crash) have direct government granted status. Taxi medallions, Jones act, sugar tariffs. These are the ones that come to mind right away, but there's a whole slew of stuff- any regulation that's easier for a big business to comply with than a small competitor, for example. Even worse if the big business manages to influence the regulation to enhance this effect. Personally I'd guess Boeing is an example of this; yes, aviation does have high capital costs but I suspect that FAA regulation + Boeing cozy relationship makes it much harder for new entrants. Of course, this isn't to say the FAA regulation isn't helpful or doesn't improve air safety, just that it also has this effect.
cogman10 2mo ago
> Can you find true monopolies in the free market Your definition of monopoly isn't what people are commonly talking about when they say "monopoly". Granted, you have the correct definition, just not the colloquial one. What people say "monopoly" what they are really talking about is industries captured by few big players. For example, grocery stores. There's not a true monopoly there but there is damage done by the fact that there's very little competition in that space. Both to consumers and product manufacturers. These big grocery chains use their leverage to get prices smaller chains can't compete with. Further, they have been trying to consolidate (see Kroger Albertsons merger) to further exert anti-trust behaviors. A clear example of the damage done by this sort of hyper consolidation is what's happened to the memory market. Multiple times the 3 big players have been hit with anti-trust lawsuits because of the price fixing they've engaged in. It's true they are not true monopolies, but they exert exactly the problematic behavior of a true monopoly. It's very unlikely that the free market would ever fix this.
- Straw 2mo ago
  Groceries are an excellent example of competition. Profit margins on groceries are razor thin. The large chain leverage results in lower consumer prices. Large grocery chains don't have anomalously high profits, ROI, or really anything that would indicate harm to consumers. Groceries are cheaper than ever compared to median wages. The memory market is international, its not clear what anti trust even means here. Even so, look at the price of memory over time, say the last 20-30 years. Adjust for inflation and its even more extreme. Sure, it is up recently with AI demand, but the general trend is drastically reducing cost and increasing quality. Memory technologies are evolving quickly and it's a capital-intensive business, so its not surprising that there are a few leaders. There's no guarantee of instant competition in free markets. Cartels rarely last long without enforcement. There's such a strong incentive to defect and secretly sell more under the table. Even OPEC could not maintain one. Memory right now is expensive simply because demand outstrips supply and there is significant capital investment and lead time to increasing supply.
  - deleted 2mo ago
    [deleted]

by Straw 2mo ago

vjvjvjvjghv 2mo ago

What you are describing sounds great in theory, but the real world doesn’t work like that. In more and more areas the obstacle to enter a market is not regulations but money.

Straw 2mo ago
I'd say exactly the same about antitrust. Can you give an example of a lasting monopoly not backed by some government policy? At any point in the last 150 years?
- vjvjvjvjghv 2mo ago
  Can you give examples of these government policies?
  - Straw 2mo ago
    Sure. The most straightforward example would be utilities in much of the US. Companies like PG&E are literally granted a monopoly in a region. Another example would be epipens. There is a competitor, but unlike most drugs, if the doctor prescribes you an epipen, the pharmacy can't give you a generic substitute, it must be name brand. Tesla is being heavily protected from Chinese competitors by US auto tariffs. Credit Ratings agencies (in large part responsible for 2008 crash) have direct government granted status. Taxi medallions, Jones act, sugar tariffs. These are the ones that come to mind right away, but there's a whole slew of stuff- any regulation that's easier for a big business to comply with than a small competitor, for example. Even worse if the big business manages to influence the regulation to enhance this effect. Personally I'd guess Boeing is an example of this; yes, aviation does have high capital costs but I suspect that FAA regulation + Boeing cozy relationship makes it much harder for new entrants. Of course, this isn't to say the FAA regulation isn't helpful or doesn't improve air safety, just that it also has this effect.

cogman10 2mo ago

> Can you find true monopolies in the free market Your definition of monopoly isn't what people are commonly talking about when they say "monopoly". Granted, you have the correct definition, just not the colloquial one. What people say "monopoly" what they are really talking about is industries captured by few big players. For example, grocery stores. There's not a true monopoly there but there is damage done by the fact that there's very little competition in that space. Both to consumers and product manufacturers. These big grocery chains use their leverage to get prices smaller chains can't compete with. Further, they have been trying to consolidate (see Kroger Albertsons merger) to further exert anti-trust behaviors. A clear example of the damage done by this sort of hyper consolidation is what's happened to the memory market. Multiple times the 3 big players have been hit with anti-trust lawsuits because of the price fixing they've engaged in. It's true they are not true monopolies, but they exert exactly the problematic behavior of a true monopoly. It's very unlikely that the free market would ever fix this.

Straw 2mo ago
Groceries are an excellent example of competition. Profit margins on groceries are razor thin. The large chain leverage results in lower consumer prices. Large grocery chains don't have anomalously high profits, ROI, or really anything that would indicate harm to consumers. Groceries are cheaper than ever compared to median wages. The memory market is international, its not clear what anti trust even means here. Even so, look at the price of memory over time, say the last 20-30 years. Adjust for inflation and its even more extreme. Sure, it is up recently with AI demand, but the general trend is drastically reducing cost and increasing quality. Memory technologies are evolving quickly and it's a capital-intensive business, so its not surprising that there are a few leaders. There's no guarantee of instant competition in free markets. Cartels rarely last long without enforcement. There's such a strong incentive to defect and secretly sell more under the table. Even OPEC could not maintain one. Memory right now is expensive simply because demand outstrips supply and there is significant capital investment and lead time to increasing supply.
- deleted 2mo ago
  [deleted]