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In order to make competition flourish, you require a strong government which squishes anti-competitive behavior. Markets, left to their own accord, naturally t
by preg_match 26d ago
In order to make competition flourish, you require a strong government which squishes anti-competitive behavior.
Markets, left to their own accord, naturally tend to monopolies and cooperation. Cooperation just works better than competition. Competition is, really, a zero-sum game, a race to the bottom for companies. Cooperation is optimal, it’s “everybody wins”.
Even if companies didn’t just buy up each other (why wouldn’t they? We need laws against that), they would certainly work together to set prices as high as the market can bear. Which is then, effectively, a monopoly.
I mean, imagine a perfect market with hundreds of thriving competitors. What happens over time? As the industry matures, competitors buy each other up and consolidate capital. Then, newcomers can’t break in, because they don’t have the capital. And any newcomers who have a new innovative process or product, just get bought out before they threaten the market share. Then, eventually, there are only a handful of companies left. It’s trivial for them to move in lock-step and everyone wins… except the consumer.
Look at any domain in the US - they’re all like this. The only exceptions are new domains, like AI. That will change, too, we’ve seen this pattern thousands of times.
There’s two moats here: regulation, and capital. You can eliminate the regulation moat with libertarianism, sure, but not the capital moat. And, you strengthen the capital moat when you remove the regulation. So nothing changes. Best case scenario, the situation is the same. Worst case, it’s accelerated.
- WalterBright 25d ago> Markets, left to their own accord, naturally tend to monopolies and cooperation No, they don't. To become a monopoly, they need the collusion of government to outlaw competition. The poster boy of monopolies, Standard Oil, never had a monopoly. During its rise, it dropped the consumer price of kerosene 70%. Its market share dropped steadily during the years of the anti-trust trial. > It’s trivial for them to move in lock-step and everyone wins… except the consumer. Ever wonder what happened to IBM?
- WalterBright 25d agoYou might want to read "Titan" by Chernow before telling me I am wrong.
- stopping 25d agoAre you saying that it's impossible for a company to become a monopoly purely under its own power?
- WalterBright 25d agoYou can always present a case history of one.
- stopping 25d agoYou said: > To become a monopoly, they need the collusion of government to outlaw competition.
- WalterBright 25d agoYes, I did. And you can prove that wrong with a case history.
- tombert 25d agoAll you did was say that Standard Oil doesn't count as a monopoly because you claim that you need a government intervention to be a monopoly, which is not a definition I have heard and certainly does not fall under colloquial definitions. Your big rebuttle to it, as far as I can tell, appears to be "Nuh uh, now prove me wrong!!!". There are plenty of companies that have gotten to monopolistic or near-monopolistic categories without a government declaring it; Microsoft in the 90's, for example, was famously anti-competitive and actually was briefly declared a monopoly (though that was overturned in higher courts). As far as I'm aware, it wasn't the US government that artificially made Microsoft anticompetitive.
- WalterBright 25d agoPlenty? Let's start with Microsoft. It did not have a monopoly. Apple and Linux computers were available for sale. Any other examples?
- nrr 25d agoHmm. Why should the word monopoly only refer to the legal mechanism by which market exclusivity is enforced rather than referring to the resulting market structure or market power? If I'm not legally prohibited from competing with a firm, but that firm's position nonetheless also makes it unprofitable for me to enter or compete, what is that market structure called?
- WalterBright 25d agoIf it's unprofitable for you, that means the other firm is doing a better job serving customers than you.
- nrr 25d agoDoes it? This is an empirical observation matched with a causal claim. How have you controlled for your confounding variables?
- eadler 21d agoResponding to you generally and not to this comment. I want to thank you for explaining economic principles even if the OP doesn't understand them. As someone who has less econ background then they'd like — your explanations are clear.