4 ms·

Consider the fact that if you refuse to do business with a private-sector monopoly the worst that'll happen is that you'll get a slightly less-effective alterna

Consider the fact that if you refuse to do business with a private-sector monopoly the worst that'll happen is that you'll get a slightly less-effective alternative or in the worst case go without the good. If you refuse to participate in a government-mandated monopoly you can face civil and criminal charges. Also, a private-sector monopoly, no matter how seemingly entrenched, is always vulnerable to disruption (when was the last time you used a PC manufactured by IBM? Or were forced to use IE against your will, for that matter? And yet those were both at one time monopolies that came very close to being broken up by the justice department because people claimed the free market could never topple them). That's why that "distopian future scenario" the OP referenced didn't come about in most of the world. Other browsers came about that users liked better and despite the big advantage IE gets from being bundled with most PCs others have had success in the market. Contrast that with the difficulty in breaking a government-enforced monopoly like the one referenced in the article.

revscat 13y ago
> Consider the fact that if you refuse to do business with a private-sector monopoly the worst that'll happen is that you'll get a slightly less-effective alternative or in the worst case go without the good. That can be pretty bad if the "good" you are going without is food, shelter, a necessary medical procedure, or some other fundamental requirement.
- kcorbitt 13y ago
  That's true, of course. But while I'm no history buff the main examples I can think of regarding monopolies of these commodities have always been government-induced (war-time rations, communist food lines, etc.). Am I missing examples of when a private company in a functional capitalist system forced the population at large to buy their food from them? There might be examples with crony capitalism, but in the end that's a breed of "capitalism" in quotes that's effectively government-enforced anyway.
  - jessaustin 13y ago
    I think I agree with the main thrust of your arguments, but can you point at an existing capitalist system that is not in many respects "crony" capitalism? (Switzerland, maybe? I've heard good things about them.) I suspect we need a new term for what we want. "Capitalism" is too sullied by use.
    - alexeisadeski3 13y ago
      The Scandinavian nations are pretty solid non crony cap states, as are the old standbys of Singapore and Hong Kong. No nation is pure, of course. But we can look at examples of crony policies within otherwise capitalist-ish nations and compare to less crony-ish policies within those same nations. It all gets a bit muddy real quick, but I guess we have to do the best with what we've got.
      - seanmcdirmid 13y ago
        > as are the old standbys of Singapore and Hong Kong. You don't know Singapore or HK very well. They are very good at being a transparent government, but guanxi is still needed to get things done.
        alexeisadeski3 13y ago
        I really don't, you are correct.
      - jessaustin 13y ago
        I can't speak to practices in Scandinavia or Hong Kong, but I've lived in Singapore, and while it has plenty of good points, and lots of things just work, it also exhibits much of what I consider to be crony capitalism. First, there is a great deal of overlap among the leadership of government, the military, education, and business. As in, the same dude is CEO of a large company and a Colonel in the army and last year he was minister for something-or-another. When he gets tired of this company he'll teach at NUS for a bit. If you're on track to slide into that top echelon when you're still in your twenties, you're golden, otherwise your prospects are more limited. To a seemingly greater extent than is true even in USA, the government is involved in everything. Fortunately, the bureaucrats seem to make generally good decisions, but they're still making decisions. The genuinely competitive industries are export-focused, which I guess is OK for a small nation for which exports are so important. Everyone has heard about the fairly severe punishments Singapore has for various crimes, but perhaps not how much enforcement varies based on the identity of the criminal. Even before you get to the punishment stage, law enforcement and related surveillance pervades society, and affects different classes of people in wildly different ways. This isn't an economic effect per se, but the choices people make as a reaction to this have economic consequences. Also, I can't get over the fact that for 34 of its 48 years, Singapore's PM has been LKY or his son.
acdha 13y ago
You need to read more history – that naive dismissal doesn't work well for anything important. If someone corners the market on, say, oil, cargo transportation, etc. your choice is either to pay the monopoly tax or accept a significant loss. Do you really think “oh, it's just slightly less effective” is why the Sherman Antitrust Act (https://en.wikipedia.org/wiki/Sherman_Antitrust_Act https://en.wikipedia.org/wiki/Sherman_Antitrust_Act) was seen as widely needed by basically everyone other than Standard Oil? Similar stories apply to anyone who tried to make a living when the railroads had significant regional control – it wasn't a slight hit, it was “do you want to sell your goods outside of your town or not?” (All of these are well known, well documented examples a little over a century old. For a more modern alternative, consider the many people who have a single provider for internet access – they can either pay or give up on significant participation in the modern economy.) > Also, a private-sector monopoly, no matter how seemingly entrenched, is always vulnerable to disruption (when was the last time you used a PC manufactured by IBM? Or were forced to use IE against your will, for that matter? Amusingly, both of your examples are cases where the monopoly was disrupted under the treat of government action. The reason those other browsers had a chance is that Microsoft couldn't lock down the PC market as much as they wanted to while the DOJ was investigating. Similarly, look at IBM's history – do you think the PC market would be as open if they hadn't had to worry about a replay of the 1969 antitrust settlement?
- uiri 13y ago
  If you actually look at the history of Standard Oil (including the exposé by Ida Tarbell which arguably depicts the strongest case for the existence of a monopoly), you will notice that Standard Oil's market share was already on the decline by the time that the US Supreme Court ruled that Standard Oil had to be broken up. The break up wasn't even very effective in Standard Oil's case; the modern ExxonMobil is the result of mergers of some of the largest of the daughter companies.
  - leot 13y ago
    So the fact that the monopoly failed "eventually" means that the incredible toll it took from the economy was ok?
drabiega 13y ago
This is only true because of government action to break up the most egregious of monopolies, however. Furthermore, -all- monopolies are vulnerable to disruption regardless of public/private status so this characteristic of private monopolies isn't relevant.

revscat 13y ago

> Consider the fact that if you refuse to do business with a private-sector monopoly the worst that'll happen is that you'll get a slightly less-effective alternative or in the worst case go without the good. That can be pretty bad if the "good" you are going without is food, shelter, a necessary medical procedure, or some other fundamental requirement.

kcorbitt 13y ago
That's true, of course. But while I'm no history buff the main examples I can think of regarding monopolies of these commodities have always been government-induced (war-time rations, communist food lines, etc.). Am I missing examples of when a private company in a functional capitalist system forced the population at large to buy their food from them? There might be examples with crony capitalism, but in the end that's a breed of "capitalism" in quotes that's effectively government-enforced anyway.
- jessaustin 13y ago
  I think I agree with the main thrust of your arguments, but can you point at an existing capitalist system that is not in many respects "crony" capitalism? (Switzerland, maybe? I've heard good things about them.) I suspect we need a new term for what we want. "Capitalism" is too sullied by use.
  - alexeisadeski3 13y ago
    The Scandinavian nations are pretty solid non crony cap states, as are the old standbys of Singapore and Hong Kong. No nation is pure, of course. But we can look at examples of crony policies within otherwise capitalist-ish nations and compare to less crony-ish policies within those same nations. It all gets a bit muddy real quick, but I guess we have to do the best with what we've got.
    - seanmcdirmid 13y ago
      > as are the old standbys of Singapore and Hong Kong. You don't know Singapore or HK very well. They are very good at being a transparent government, but guanxi is still needed to get things done.
      - alexeisadeski3 13y ago
        I really don't, you are correct.
    - jessaustin 13y ago
      I can't speak to practices in Scandinavia or Hong Kong, but I've lived in Singapore, and while it has plenty of good points, and lots of things just work, it also exhibits much of what I consider to be crony capitalism. First, there is a great deal of overlap among the leadership of government, the military, education, and business. As in, the same dude is CEO of a large company and a Colonel in the army and last year he was minister for something-or-another. When he gets tired of this company he'll teach at NUS for a bit. If you're on track to slide into that top echelon when you're still in your twenties, you're golden, otherwise your prospects are more limited. To a seemingly greater extent than is true even in USA, the government is involved in everything. Fortunately, the bureaucrats seem to make generally good decisions, but they're still making decisions. The genuinely competitive industries are export-focused, which I guess is OK for a small nation for which exports are so important. Everyone has heard about the fairly severe punishments Singapore has for various crimes, but perhaps not how much enforcement varies based on the identity of the criminal. Even before you get to the punishment stage, law enforcement and related surveillance pervades society, and affects different classes of people in wildly different ways. This isn't an economic effect per se, but the choices people make as a reaction to this have economic consequences. Also, I can't get over the fact that for 34 of its 48 years, Singapore's PM has been LKY or his son.

acdha 13y ago

You need to read more history – that naive dismissal doesn't work well for anything important. If someone corners the market on, say, oil, cargo transportation, etc. your choice is either to pay the monopoly tax or accept a significant loss. Do you really think “oh, it's just slightly less effective” is why the Sherman Antitrust Act (https://en.wikipedia.org/wiki/Sherman_Antitrust_Act https://en.wikipedia.org/wiki/Sherman_Antitrust_Act) was seen as widely needed by basically everyone other than Standard Oil? Similar stories apply to anyone who tried to make a living when the railroads had significant regional control – it wasn't a slight hit, it was “do you want to sell your goods outside of your town or not?” (All of these are well known, well documented examples a little over a century old. For a more modern alternative, consider the many people who have a single provider for internet access – they can either pay or give up on significant participation in the modern economy.) > Also, a private-sector monopoly, no matter how seemingly entrenched, is always vulnerable to disruption (when was the last time you used a PC manufactured by IBM? Or were forced to use IE against your will, for that matter? Amusingly, both of your examples are cases where the monopoly was disrupted under the treat of government action. The reason those other browsers had a chance is that Microsoft couldn't lock down the PC market as much as they wanted to while the DOJ was investigating. Similarly, look at IBM's history – do you think the PC market would be as open if they hadn't had to worry about a replay of the 1969 antitrust settlement?

uiri 13y ago
If you actually look at the history of Standard Oil (including the exposé by Ida Tarbell which arguably depicts the strongest case for the existence of a monopoly), you will notice that Standard Oil's market share was already on the decline by the time that the US Supreme Court ruled that Standard Oil had to be broken up. The break up wasn't even very effective in Standard Oil's case; the modern ExxonMobil is the result of mergers of some of the largest of the daughter companies.
- leot 13y ago
  So the fact that the monopoly failed "eventually" means that the incredible toll it took from the economy was ok?

drabiega 13y ago

This is only true because of government action to break up the most egregious of monopolies, however. Furthermore, -all- monopolies are vulnerable to disruption regardless of public/private status so this characteristic of private monopolies isn't relevant.