4 ms·

I smell a straw man here. All the problems mentioned arose because WU was a monopoly. But, why was WU a monopoly? Telegraph lines could only be installed prof

by javert 17y ago

I smell a straw man here. All the problems mentioned arose because WU was a monopoly. But, why was WU a monopoly? Telegraph lines could only be installed profitably along railroad lines. Thus, the railroad companies could create a situation where there could only be one telegraph company--a monopoly. Why could telegraph lines only be installed profitably alongside railroad lines? Well, one could lay telegraph lines through the countryside fairly cheaply, but the problem is: high taxes on the land you're using, government not allowing you to bury lines below roads and other obstructions, and similar regulatory issues. In other words, there were no non-regulatory reasons one couldn't set up a competing telegraph company (at great profit, if it's true that WU charged exorbitant prices and spied on your messages). Likewise, in the modern telco industry, there are government-granted monopolies to certain companies like AT&T and Time Warner through regulatory means. E.g. typically, only one company is allowed to install communication lines in a given area. Doing away with government-granted monopolistic regulations is the solution. Consider what happens if the other route is taken. The other answer is to have government more heavily regulate the existing monopolies - which will lead to abuse and corruption. If you allow for excessive regulation, you have the recipie for the problem cited in the article: government and certain companies will conspire with each other, to everyone's detriment. It's already happening with AT&T and the US government (consider the extra/quasi-legal spying AT&T has done for the government), and it will get worse under net neutrailty.

pradocchia 17y ago
> Doing away with government-granted monopolistic regulations is the solution. I have no prescriptions, but I do observer that the grantor and grantee are typically two hands of the same will. That monopolies are granted because the grantee wants it, and has found ways to make it so. How do you do away with that? Capitalism is premised on the concentration of wealth to fund capital-intensive investment. Given the concomitant concentration of power, how do you prevent regulatory capture and the general perversion of government? How do you dilute power and preserve the system?
- anamax 17y ago
  Of course the grantee wants it. However, if there's no grantor, it doesn't matter what the grantee wants. > Given the concomitant concentration of power, how do you prevent regulatory capture and the general perversion of government? A govt that doesn't regulate isn't subject to regulatory capture. A "not govt" that tries to regulate can usually be ignored.
  - pradocchia 17y ago
    I don't see how this answers the question. There is nothing to prevent a sufficiently influential grantee-to-be from creating a grantor. In fact, I believe this is the origin of many regulatory bodies and government powers.
  - deleted 17y ago
    [deleted]
    - javert 17y ago
      In the context of the conversation at hand, "regulation"=="government regulation." So, your counter example isn't really relevant. Note that Google is not a monopoly. You are free to use whatever search engine or ad network you want. That will always be the case unless Google is given some sort of government-granted monopoly.
- javert 17y ago
  If there is a "concomitant concentration of power," people are hosed, and you're exactly right. The point is to make sure there is NOT a concomitant concentration of power. In other words, you have to have limited government. In a free market system (capitalism), only government /actually/ has power. Corporations must compete. In our mixed economy, corporations do gain power, but that is because we do not have limited government.
  - chrischen 17y ago
    If you limit the power of the government, wouldn't this then simply shift the balance of power to private individuals and corporations? Then instead of abusive governments, we'd have abusive companies. I mean the government takes certain powers away from private citizens in order to prevent us from abusing these powers (murder, fraud, etc). I agree that there are probably regulations that impede competition from performing ideally, but sometimes it is necessary, like in the public utilities. Some of these things simply can't work as well if we have multiple companies trying to screw each other over. Certainly the argument is valid, at least theoretically, that if we do not codify net neutrality, and deregulate the internet business, the companies that favor the consumers the most (most likely the net neutral ones) will dominate in the end, but there are other issues that come in practice. Who gets to create infrastructure (cables and stuff) through the ground when there are hundreds of them? Imagine if we privatized electricity. We'd have multiple powerlines everywhere. It'd just increase overall waste. Or perhaps radio wave broadcasting were to be deregulated. Nothing would function. There are potential problems if we don't regulate the ISPs and let them all duke it out. Sometimes the sum of the whole does not equal the parts.
DannoHung 17y ago
> high taxes on the land you're using, government not allowing you to bury lines below roads and other obstructions, and similar regulatory issues. Citation? Honestly, I'd think that the main reason that telegraph lines could only profitably be installed along railroad lines would be because of maintenance concerns.
- javert 17y ago
  Unfortunately, I don't have a citation on this. I'm just appealing to common sense. If there are no regulatory barriers to providing some service, someone will do it, when they are able to do it profitably. Which means that they'll do it when it's actually worth doing. If there were no regulatory monopoly on creating telegraph lines, WU wasn't really that bad, and it wasn't really needed/worth it. (After all, the article does not make a case that WU successfully manipulated the election.) However, I think it's far more likely that there was a regulatory monopoly, as there is for modern telecoms.
  - billjings 17y ago
    Land rights are more important than property taxes. I don't think that private property rights can reasonably be called a regulatory barrier.
wooster 17y ago
"high taxes on the land you're using" Lines (power, telegraph, gas, etc) are generally run on easements purchased from the underlying landowner. Right-of-ways and property for railroads were often government-granted, so it was easier to negotiate with the railroad for an easement for a telegraph line than with a few thousand individual landowners, any one of which could easily raise your costs by refusing to allow you to go through their land. "government not allowing you to bury lines below roads and other obstructions" In the 1800's this was not really a big problem. Besides, telegraph lines generally ran on poles.
- krakensden 17y ago
  Not to mention burying them is more expensive...

by javert 17y ago

pradocchia 17y ago

> Doing away with government-granted monopolistic regulations is the solution. I have no prescriptions, but I do observer that the grantor and grantee are typically two hands of the same will. That monopolies are granted because the grantee wants it, and has found ways to make it so. How do you do away with that? Capitalism is premised on the concentration of wealth to fund capital-intensive investment. Given the concomitant concentration of power, how do you prevent regulatory capture and the general perversion of government? How do you dilute power and preserve the system?

anamax 17y ago
Of course the grantee wants it. However, if there's no grantor, it doesn't matter what the grantee wants. > Given the concomitant concentration of power, how do you prevent regulatory capture and the general perversion of government? A govt that doesn't regulate isn't subject to regulatory capture. A "not govt" that tries to regulate can usually be ignored.
- pradocchia 17y ago
  I don't see how this answers the question. There is nothing to prevent a sufficiently influential grantee-to-be from creating a grantor. In fact, I believe this is the origin of many regulatory bodies and government powers.
- deleted 17y ago
  [deleted]
  - javert 17y ago
    In the context of the conversation at hand, "regulation"=="government regulation." So, your counter example isn't really relevant. Note that Google is not a monopoly. You are free to use whatever search engine or ad network you want. That will always be the case unless Google is given some sort of government-granted monopoly.
javert 17y ago
If there is a "concomitant concentration of power," people are hosed, and you're exactly right. The point is to make sure there is NOT a concomitant concentration of power. In other words, you have to have limited government. In a free market system (capitalism), only government /actually/ has power. Corporations must compete. In our mixed economy, corporations do gain power, but that is because we do not have limited government.
- chrischen 17y ago
  If you limit the power of the government, wouldn't this then simply shift the balance of power to private individuals and corporations? Then instead of abusive governments, we'd have abusive companies. I mean the government takes certain powers away from private citizens in order to prevent us from abusing these powers (murder, fraud, etc). I agree that there are probably regulations that impede competition from performing ideally, but sometimes it is necessary, like in the public utilities. Some of these things simply can't work as well if we have multiple companies trying to screw each other over. Certainly the argument is valid, at least theoretically, that if we do not codify net neutrality, and deregulate the internet business, the companies that favor the consumers the most (most likely the net neutral ones) will dominate in the end, but there are other issues that come in practice. Who gets to create infrastructure (cables and stuff) through the ground when there are hundreds of them? Imagine if we privatized electricity. We'd have multiple powerlines everywhere. It'd just increase overall waste. Or perhaps radio wave broadcasting were to be deregulated. Nothing would function. There are potential problems if we don't regulate the ISPs and let them all duke it out. Sometimes the sum of the whole does not equal the parts.

DannoHung 17y ago

> high taxes on the land you're using, government not allowing you to bury lines below roads and other obstructions, and similar regulatory issues. Citation? Honestly, I'd think that the main reason that telegraph lines could only profitably be installed along railroad lines would be because of maintenance concerns.

javert 17y ago
Unfortunately, I don't have a citation on this. I'm just appealing to common sense. If there are no regulatory barriers to providing some service, someone will do it, when they are able to do it profitably. Which means that they'll do it when it's actually worth doing. If there were no regulatory monopoly on creating telegraph lines, WU wasn't really that bad, and it wasn't really needed/worth it. (After all, the article does not make a case that WU successfully manipulated the election.) However, I think it's far more likely that there was a regulatory monopoly, as there is for modern telecoms.
- billjings 17y ago
  Land rights are more important than property taxes. I don't think that private property rights can reasonably be called a regulatory barrier.

wooster 17y ago

"high taxes on the land you're using" Lines (power, telegraph, gas, etc) are generally run on easements purchased from the underlying landowner. Right-of-ways and property for railroads were often government-granted, so it was easier to negotiate with the railroad for an easement for a telegraph line than with a few thousand individual landowners, any one of which could easily raise your costs by refusing to allow you to go through their land. "government not allowing you to bury lines below roads and other obstructions" In the 1800's this was not really a big problem. Besides, telegraph lines generally ran on poles.

krakensden 17y ago
Not to mention burying them is more expensive...