7 ms·

To quote Rand: "There is no way to legislate competition; there are no standards by which one could define who should compete with whom, how many competitors s

To quote Rand: "There is no way to legislate competition; there are no standards by which one could define who should compete with whom, how many competitors should exist in any given field, what should be their relative strength or their so-called “relevant markets,” what prices they should charge, what methods of competition are “fair” or “unfair.” None of these can be answered, because these precisely are the questions that can be answered only by the mechanism of a free market."

sschueller 12y ago
A truly free market is not ethical. A certain amount of regulation is required to protect people from each other.
- nhstanley 12y ago
  Yup. In a truly free market, murder is totally fine. Kill your competition, literally! There's a reason we don't live in Randian fantasy worlds.
  - jasonisalive 12y ago
    No, that's not true. Free != permissive of nonconsensual interactions. For a free market to work, there must be common respect for individual autonomy. People must enter into contracts of their own free will.
    - pgeorgi 12y ago
      > People must enter into contracts of their own free will. That requires a degree of abundance (so people can refuse to enter contracts) that makes competition obsolete. As is, people are required to enter into contracts else they perish.
    - aikah 12y ago
      > For a free market to work, there must be common respect for individual autonomy. That's why that utopia cannot work. Because individuals will always use the shortest and quickest way to get what they want at the expense of others. Anarchism and Communism have/had the same problem as for their simplistic understanding of human nature which can only lead to wrong the conclusions,and the wrong ideas,even though the thought that led to these conclusion might be genuine. If a precondition states that ,in order for a system to work, people should "naturaly" respect this or that rule, well your system is broken at first place. Mankind is about order and chaos,and balance between them.People cant regulate themself.Sometimes they accept order because it suits their interests and see the benefits,but during most of human history chaos "ruled".And there is no guarantee most of the order that led the "western civilization" will last. > People must enter into contracts of their own free will. Define free will. If someone cant understand all the consequences of his actions before taking a decision, that's not free will. And noone can get the entire picture, or that person would be god himself. And who will enforce contractual obligations ? These 2 preconditions in order for your system to work are metaphysical at best,I would consider them a lie,because they cannot be fufilled.
claudius 12y ago
Thankfully, this is not intended to legislate competition but the safety of passengers and other users of the tax-financed public roads. Your point being?
holri 12y ago
The court says they are violating laws. What has this to do with a free market? Is a free market one without laws? Is anarchy free market?
- aianus 12y ago
  Other than maintaining liability insurance like any other driver, I don't see the need for any of these added protections. IMO consumers do not want to pay the cost of these protections and they should be able to make their own well-informed choices instead of being forced to buy them by the state. The cynic in me thinks this is less about consumer protection and more about well-funded taxi lobbies which benefit from the regulatory capture.
  - holri 12y ago
    Well, than the Germans have to vote for a more liberal government. But they did the opposite, the liberals just lost their parliament seats.
    - aianus 12y ago
      Just because the government is elected democratically doesn't mean individual laws are just or reflect the will of the constituents. There's no incentive for the government to side with the consumers on this issue since politicians profit through taxi medallions, political contributions from taxi companies, etc and it's not a big enough issue for anyone to change their votes.
      - Xylakant 12y ago
        I doubt that there's a lot of political contributions from taxi companies. The market is very different from the US - in Berlin the 7000 Taxis are mostly owned by companies having anywhere between 1 and a handful of cars. A medallion costs the administration fee and can be freely obtained, they're more or less unlimited. Certainly, the cab owners are somewhat organized and have some influence, but the degree is much lower than that. Uber alone has more lobbying power.
malka 12y ago
> There is no way to legislate competition Reality checking in.
pgeorgi 12y ago
It's not about legislating competition. It's about Uber avoiding regulations (that the taxi coops already implement): insurance for passengers, insurance for commercial car use, car checkups every year instead of every second (like for private cars), yearly health check for the driver. That's essentially it, and as soon as Uber follows the rules, they can operate freely. They can organize it themselves (with employed drivers) or require their freelance drivers to do so. If their business model doesn't allow for that, their business model is flawed, and the German society has no obligation to bear Uber's costs just so they can feel "disruptive". [edit: it's somewhat more involved given that the court refers to PBefG, which as a whole needs some creative interpretation to allow for Uber to work, eg. running things as "car rental with driver" (which requires that customers don't state where they want to drive to beforehand). Still, Uber tries to work around any and all regulations, and it's no surprise that this won't be tolerated, and for good reason.]
- yoodenvranx 12y ago
  There is also the thing that cabs in Germany always _have_ to provide service, regardless of vacation, weather and so on. A private might decide to operate only at those times of the day with a lot of potential customers but that is not possible for official cab companies. The same goes for heavy rain and snow and so on.
  - _pmf_ 12y ago
    > There is also the thing that cabs in Germany always _have_ to provide service, regardless of vacation, weather and so on. A private might decide to operate only at those times of the day with a lot of potential customers but that is not possible for official cab companies. In my experience as a German waiting for a taxi after midnight in a suburban area (but with a major road going through), this is a merely theoretical construct. I've called 3 taxi providers in the rough area; the result was a brisk 1.5 hour walk home because they did not seem all to interested in dispatching a driver to that location at that time. I might have a theoretical legal handle on this behavior, but I doubt this has ever been successfully challenged in court (since the providers can always weasel out by claiming the did not have and free drivers at this moment).
_pmf_ 12y ago
> "None of these can be answered, because these precisely are the questions that can be answered only by the mechanism of a free market." By that logic, we should happily accept monopolies, cartels and huge conglomerates. The notion that the free market is beneficial to society as a whole was a cute idea, but the slave workers of Foxconn are probably not quite in agreement.
- simonh 12y ago
  The workers in south china queue round the block for hours to apply for jobs at Foxxcon and other high tech manufacturers. They're some of the best paying manufacturing jobs in the area and are lifting hundreds of thousands of families out of rural poverty.Some become team leaders, get involved in negotiating wages and working conditions, or take classes and move up to secretarial and administrative positions. Many of these workers are women and are returning to the countryside with experience, training and even line workers often have the capital to start their own businesses. As a result it's also leading to a sea change in the position of women in rural society. http://www.cnn.com/2012/09/30/opinion/chang-chinese-factory-workers/ http://www.cnn.com/2012/09/30/opinion/chang-chinese-factory-...
cousin_it 12y ago
In the past few months I've been trying to find strong arguments against free-market beliefs. Here's what I have so far: 1) Saying that some businesses ought to disappear due to the invisible hand of the market, is just like saying that things ought to stay down due to the invisible hand of gravity. The market is a powerful force, but that doesn't mean its outcome is always what we want. 2) It's a feature of the free market that firms go out of business all the time. But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane. It looks like (1) proves that we need some restrictions on competition, and (2) proves that we need some redistribution. We may quibble about how much, but taking a Strong Principled Stance against these things seems wrong.
- Padding 12y ago
  > But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane. You're conflating issues here. Something (or someone) that's not adding any value to an economy has no place (and no reason to participate) in it. That being said, letting people starve is obviously inhumane. However, the answer to this isn't opening up bullshit positions in the economy, by introducing artificial inefficiencies, in order to accomodate those otherwise "useless" people. Regulations (ideally) are there to keep the markets efficient (in the long term) by maintaining "fairness". Not to ensure that individual humans don't starve. Keeping people, that are unable to support themselves, alive and well is a welfare issue, and is not otherwise adressed by markets (directly).
  - deleted 12y ago
    [deleted]
  - cousin_it 12y ago
    Hmm. I guess many free market proponents also conflate these issues, when they claim that free markets and wealth redistribution are opposed to each other. That said, I have sympathy for the idea that markets and welfare can work well together. I've long suspected that "the welfare state is a libertarian's wet dream", e.g. a system of universal basic income would allow more people to become entrepreneurs because the risk would be lower. Not sure how Ayn Rand missed that point.
legulere 12y ago
There are several real world examples where regulation was needed for a market (in contrast to a monopoly) to be created.
adamnemecek 12y ago
How do you know that you can completely ignore someone's opinion? They quote Ayn Rand.
thu 12y ago
Free market can destroy itself, for instance by the creation of a monopoly. How to apply the mechanism of the free market, as good as it can be, if it disappears ? Anyway here, it's not about competition (that's what they want you to believe it is), it's about regulations (e.g. ensure some safety rules).
- icebraining 12y ago
  Free market can destroy itself, for instance by the creation of a monopoly. Can it? Are there any good examples of a market with a significant size (with enough profits to support multiple suppliers) devolving into a monopoly without any "help" from outside the market?
  - gambiting 12y ago
    US and Comcast situation? The market is huge(pretty much everyone needs Internet), the profits are huge as well, yet in a lot of places Comcast has dominated the market.
    - aianus 12y ago
      That's a government granted monopoly, not a natural one.
    - icebraining 12y ago
      Comcast hasn't dominated the market through market forces, it bought it from AT&T in 2001. Comcast has now ~21M customers - AT&T Broadcast, which they bought, had 22M. AT&T, has one should know, was a legal monopoly; hardly a free market participant.
      - rhino369 12y ago
        Acquisition is a free market tool.
        deleted 12y ago
        [deleted]
digitalengineer 12y ago
Careful now. It's daytime in Europe, so the more Laisser faire (US-free-market-style) arguments have a higher change of getting down voted. This will correct a bit in about 6 hours when the East Coast wakes up. I'm not judging it, it's just the way us europeans are 'wired'. The taxi market is one ripe thats ripe for disruption. There's lots of demand and low, all-the-same companies offering a low quality/high cost service. It's also one thats build a lot of rules around it, some for the clients protection and a lot to prevent competition. Large established companies always prefer more rules because it absolutely kills new companies trying to enter a market.
- jacquesm 12y ago
  The taxi market is absolutely ripe for disruption. But GP did not provide any reasons why Uber should be the way to do it. Taxi companies are regulated for a variety of reasons, not just to keep out the competition and as far as I know nothing stops Uber drivers from getting the same certifications as regular taxis. If they do that and they are still blocked or if they are denied certification then you have a genuine case of unfair competition. Until then Uber is tilting the playing field in their direction by offering a product that competes unfairly with the regulated drivers. Maybe this is the only way in which such a regulation effort can be challenged but I'm not convinced of that. As for the 'careful now' and so on bits, anybody quoting Ayn Rand verbatim without adding much to the conversation is probably going to get downvoted, it's not as if she's an authority in the field of economics, and most of her writing displays a shockingly bad understanding of the field.
  - digitalengineer 12y ago
    Thank you for the insights. A quick reply: >Taxi companies are regulated for a variety of reasons Correct. But mostly because they made a mess of their nr1 job: transporting people Today we have new and far better ways t regulate a driver's behavior. Payment in advance, navigation to check the route and a easy way to judge the driver afterwards. That takes care of most of the complaints.
    - 12y ago

sschueller 12y ago

A truly free market is not ethical. A certain amount of regulation is required to protect people from each other.

nhstanley 12y ago
Yup. In a truly free market, murder is totally fine. Kill your competition, literally! There's a reason we don't live in Randian fantasy worlds.
- jasonisalive 12y ago
  No, that's not true. Free != permissive of nonconsensual interactions. For a free market to work, there must be common respect for individual autonomy. People must enter into contracts of their own free will.
  - pgeorgi 12y ago
    > People must enter into contracts of their own free will. That requires a degree of abundance (so people can refuse to enter contracts) that makes competition obsolete. As is, people are required to enter into contracts else they perish.
  - aikah 12y ago
    > For a free market to work, there must be common respect for individual autonomy. That's why that utopia cannot work. Because individuals will always use the shortest and quickest way to get what they want at the expense of others. Anarchism and Communism have/had the same problem as for their simplistic understanding of human nature which can only lead to wrong the conclusions,and the wrong ideas,even though the thought that led to these conclusion might be genuine. If a precondition states that ,in order for a system to work, people should "naturaly" respect this or that rule, well your system is broken at first place. Mankind is about order and chaos,and balance between them.People cant regulate themself.Sometimes they accept order because it suits their interests and see the benefits,but during most of human history chaos "ruled".And there is no guarantee most of the order that led the "western civilization" will last. > People must enter into contracts of their own free will. Define free will. If someone cant understand all the consequences of his actions before taking a decision, that's not free will. And noone can get the entire picture, or that person would be god himself. And who will enforce contractual obligations ? These 2 preconditions in order for your system to work are metaphysical at best,I would consider them a lie,because they cannot be fufilled.

claudius 12y ago

Thankfully, this is not intended to legislate competition but the safety of passengers and other users of the tax-financed public roads. Your point being?

holri 12y ago

The court says they are violating laws. What has this to do with a free market? Is a free market one without laws? Is anarchy free market?

aianus 12y ago
Other than maintaining liability insurance like any other driver, I don't see the need for any of these added protections. IMO consumers do not want to pay the cost of these protections and they should be able to make their own well-informed choices instead of being forced to buy them by the state. The cynic in me thinks this is less about consumer protection and more about well-funded taxi lobbies which benefit from the regulatory capture.
- holri 12y ago
  Well, than the Germans have to vote for a more liberal government. But they did the opposite, the liberals just lost their parliament seats.
  - aianus 12y ago
    Just because the government is elected democratically doesn't mean individual laws are just or reflect the will of the constituents. There's no incentive for the government to side with the consumers on this issue since politicians profit through taxi medallions, political contributions from taxi companies, etc and it's not a big enough issue for anyone to change their votes.
    - Xylakant 12y ago
      I doubt that there's a lot of political contributions from taxi companies. The market is very different from the US - in Berlin the 7000 Taxis are mostly owned by companies having anywhere between 1 and a handful of cars. A medallion costs the administration fee and can be freely obtained, they're more or less unlimited. Certainly, the cab owners are somewhat organized and have some influence, but the degree is much lower than that. Uber alone has more lobbying power.

malka 12y ago

> There is no way to legislate competition Reality checking in.

pgeorgi 12y ago

It's not about legislating competition. It's about Uber avoiding regulations (that the taxi coops already implement): insurance for passengers, insurance for commercial car use, car checkups every year instead of every second (like for private cars), yearly health check for the driver. That's essentially it, and as soon as Uber follows the rules, they can operate freely. They can organize it themselves (with employed drivers) or require their freelance drivers to do so. If their business model doesn't allow for that, their business model is flawed, and the German society has no obligation to bear Uber's costs just so they can feel "disruptive". [edit: it's somewhat more involved given that the court refers to PBefG, which as a whole needs some creative interpretation to allow for Uber to work, eg. running things as "car rental with driver" (which requires that customers don't state where they want to drive to beforehand). Still, Uber tries to work around any and all regulations, and it's no surprise that this won't be tolerated, and for good reason.]

yoodenvranx 12y ago
There is also the thing that cabs in Germany always _have_ to provide service, regardless of vacation, weather and so on. A private might decide to operate only at those times of the day with a lot of potential customers but that is not possible for official cab companies. The same goes for heavy rain and snow and so on.
- _pmf_ 12y ago
  > There is also the thing that cabs in Germany always _have_ to provide service, regardless of vacation, weather and so on. A private might decide to operate only at those times of the day with a lot of potential customers but that is not possible for official cab companies. In my experience as a German waiting for a taxi after midnight in a suburban area (but with a major road going through), this is a merely theoretical construct. I've called 3 taxi providers in the rough area; the result was a brisk 1.5 hour walk home because they did not seem all to interested in dispatching a driver to that location at that time. I might have a theoretical legal handle on this behavior, but I doubt this has ever been successfully challenged in court (since the providers can always weasel out by claiming the did not have and free drivers at this moment).

_pmf_ 12y ago

> "None of these can be answered, because these precisely are the questions that can be answered only by the mechanism of a free market." By that logic, we should happily accept monopolies, cartels and huge conglomerates. The notion that the free market is beneficial to society as a whole was a cute idea, but the slave workers of Foxconn are probably not quite in agreement.

simonh 12y ago
The workers in south china queue round the block for hours to apply for jobs at Foxxcon and other high tech manufacturers. They're some of the best paying manufacturing jobs in the area and are lifting hundreds of thousands of families out of rural poverty.Some become team leaders, get involved in negotiating wages and working conditions, or take classes and move up to secretarial and administrative positions. Many of these workers are women and are returning to the countryside with experience, training and even line workers often have the capital to start their own businesses. As a result it's also leading to a sea change in the position of women in rural society. http://www.cnn.com/2012/09/30/opinion/chang-chinese-factory-workers/ http://www.cnn.com/2012/09/30/opinion/chang-chinese-factory-...

cousin_it 12y ago

In the past few months I've been trying to find strong arguments against free-market beliefs. Here's what I have so far: 1) Saying that some businesses ought to disappear due to the invisible hand of the market, is just like saying that things ought to stay down due to the invisible hand of gravity. The market is a powerful force, but that doesn't mean its outcome is always what we want. 2) It's a feature of the free market that firms go out of business all the time. But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane. It looks like (1) proves that we need some restrictions on competition, and (2) proves that we need some redistribution. We may quibble about how much, but taking a Strong Principled Stance against these things seems wrong.

Padding 12y ago
> But from a market point of view, people are like small firms that sell labor. We don't want a system where people can "go out of business" and be unable to survive, because that's inhumane. You're conflating issues here. Something (or someone) that's not adding any value to an economy has no place (and no reason to participate) in it. That being said, letting people starve is obviously inhumane. However, the answer to this isn't opening up bullshit positions in the economy, by introducing artificial inefficiencies, in order to accomodate those otherwise "useless" people. Regulations (ideally) are there to keep the markets efficient (in the long term) by maintaining "fairness". Not to ensure that individual humans don't starve. Keeping people, that are unable to support themselves, alive and well is a welfare issue, and is not otherwise adressed by markets (directly).
- deleted 12y ago
  [deleted]
- cousin_it 12y ago
  Hmm. I guess many free market proponents also conflate these issues, when they claim that free markets and wealth redistribution are opposed to each other. That said, I have sympathy for the idea that markets and welfare can work well together. I've long suspected that "the welfare state is a libertarian's wet dream", e.g. a system of universal basic income would allow more people to become entrepreneurs because the risk would be lower. Not sure how Ayn Rand missed that point.

legulere 12y ago

There are several real world examples where regulation was needed for a market (in contrast to a monopoly) to be created.

adamnemecek 12y ago

How do you know that you can completely ignore someone's opinion? They quote Ayn Rand.

thu 12y ago

Free market can destroy itself, for instance by the creation of a monopoly. How to apply the mechanism of the free market, as good as it can be, if it disappears ? Anyway here, it's not about competition (that's what they want you to believe it is), it's about regulations (e.g. ensure some safety rules).

icebraining 12y ago
Free market can destroy itself, for instance by the creation of a monopoly. Can it? Are there any good examples of a market with a significant size (with enough profits to support multiple suppliers) devolving into a monopoly without any "help" from outside the market?
- gambiting 12y ago
  US and Comcast situation? The market is huge(pretty much everyone needs Internet), the profits are huge as well, yet in a lot of places Comcast has dominated the market.
  - aianus 12y ago
    That's a government granted monopoly, not a natural one.
  - icebraining 12y ago
    Comcast hasn't dominated the market through market forces, it bought it from AT&T in 2001. Comcast has now ~21M customers - AT&T Broadcast, which they bought, had 22M. AT&T, has one should know, was a legal monopoly; hardly a free market participant.
    - rhino369 12y ago
      Acquisition is a free market tool.
      - deleted 12y ago
        [deleted]

digitalengineer 12y ago

Careful now. It's daytime in Europe, so the more Laisser faire (US-free-market-style) arguments have a higher change of getting down voted. This will correct a bit in about 6 hours when the East Coast wakes up. I'm not judging it, it's just the way us europeans are 'wired'. The taxi market is one ripe thats ripe for disruption. There's lots of demand and low, all-the-same companies offering a low quality/high cost service. It's also one thats build a lot of rules around it, some for the clients protection and a lot to prevent competition. Large established companies always prefer more rules because it absolutely kills new companies trying to enter a market.

jacquesm 12y ago
The taxi market is absolutely ripe for disruption. But GP did not provide any reasons why Uber should be the way to do it. Taxi companies are regulated for a variety of reasons, not just to keep out the competition and as far as I know nothing stops Uber drivers from getting the same certifications as regular taxis. If they do that and they are still blocked or if they are denied certification then you have a genuine case of unfair competition. Until then Uber is tilting the playing field in their direction by offering a product that competes unfairly with the regulated drivers. Maybe this is the only way in which such a regulation effort can be challenged but I'm not convinced of that. As for the 'careful now' and so on bits, anybody quoting Ayn Rand verbatim without adding much to the conversation is probably going to get downvoted, it's not as if she's an authority in the field of economics, and most of her writing displays a shockingly bad understanding of the field.
- digitalengineer 12y ago
  Thank you for the insights. A quick reply: >Taxi companies are regulated for a variety of reasons Correct. But mostly because they made a mess of their nr1 job: transporting people Today we have new and far better ways t regulate a driver's behavior. Payment in advance, navigation to check the route and a easy way to judge the driver afterwards. That takes care of most of the complaints.
  - 12y ago