capitlism and monoplies

Discussion in 'Economy' started by blu, Sep 21, 2009.

  1. blu
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    blu Senior Member

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    One thing that has always prevented me from being able to support full blown capitalism is monopolies. I have googled about the idea, read a bunch of different sources, many on mises.org, but none of the answers are satisfactory to me.

    The idea that in a free market that if a company isn't doing what consumers like they can find another company just doesn't work with monopolies and there are plenty of them around now. In many areas there is only one real broadband provider, lots of times comcast, and if you have trouble with them or don't like their high prices or them throttling bandwith for games and torrents (even legitimate ones), there is nothing to do but revert to dialup. is there really how it should be? Similarly, documents came out showing that the big phone companies all schemed together to raise the price on text messages, which is a complete ripoff, to the same price range as each other so that consumers were stuck with the high price and couldn't go anywhere else. How is the free market in this case good to the consumer? there are other cases like this with car insurance companies keeping their prices inflated and within 5% of each other since they know you need car insurance and have to buy it no matter what (unless you live in a city).

    basically the above is IMO the flaw of allowing monopolies to run wild, it also kills the ability for small businesses to start in these areas since big companies can sell for so much cheaper b/c of bulk sale, already having the power over that sector of the market, and being able to operate at a loss for a short time easier than a small business.

    Also, if monopolies are to be controlled who should step in? Only someone bigger than the monopolies (some government) and someone who actually cares about that sector of the market being fair (some government, for example ford wouldn't jump in to stop microsoft, why does it care?) has the funds and ability to regulate those companies.
     
  2. KittenKoder
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    KittenKoder Senior Member

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    The strange fact that is often overlooked is that monopolies cannot exist without the government controlling who can and cannot have a business. ;)
     
  3. blu
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    blu Senior Member

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    not sure I get this...
     
  4. Rocanten
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    Rocanten Rookie

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    see E. Chemberlain "Theory of Monopolistic Competition".

    Monopolies are a very big problem in market economy. We, in Russia, know what it is very well (we have many monopolies, mostly in energy sector). So it is the reality and we have to live with this.
     
  5. KittenKoder
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    KittenKoder Senior Member

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    We'll take my favorite example: Microsucks

    Many will tell you that I think they are the "devil" ... which I do talk like that but that's not my problem with them really. They got where they were by producing one of the better operating systems, MS-DOS. However they didn't become powerful until they acquired government contracts. Until these contracts were strengthened by government regulations there were a ton of small software companies that were competing in the market quite well, one such was Egg Head, a promising small company that was producing a lot of educational software for all age ranges and grades. Microsucks then pushed a government contract and got their software to be used exclusively in public schools. Egg Head software of course was not compatible with the MS stuff so students stopped buying them and started buying the MS ones simply because they had it in their school. If the government had not had the power to push these contracts for Microsucks then Egg Head, I believe, would still be a strong company instead of being driven out of business.

    This is but one such example of how Microsucks used government regulations to push out other businesses, as we have seen their OS is falling apart, each release is more of a mess than the previous one, yet because of their contracts and government backing they maintain a strangle hold on the industry. Notice that Apple's Macintosh computers are only known as personal computers, they have very little presence in the business world. Also notice that most people fear Linux, even though they are using it everytime they visit a website. It's not because these are inferior, it's simply because Microsucks has been abusing their strength in the government.
     
  6. blu
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    blu Senior Member

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    ah yes, then I agree... it is good to see that the UK is coming down hard on them though. this also shows that if there was no government intervention in the market, in this case by controlling schools and being able to choose what software goes on the them, that MS would not have this stronghold. It also makes it impossible since smaller business won't have any gov contacts or the power ($$ and time) to invest in getting these things done.

    on an international scale, full governments have moved to open source solutions because of cost, and more paranoid ones because fears that MS is backdooring internationalized versions of the OS due to differences vs the english one, and past history with the NSA and MS.
     
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  7. KittenKoder
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    KittenKoder Senior Member

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    The government intervention should be at the people's discretion though, and they should not be the mobster style politicians we have in the US now. The simple fact of the matter is that the more complicated the system is, the more corrupt it will become. In reality a business is only as strong as one of two things, the quality and price of their product, or the government regulations that prevent competition. In the US we have seen a huge decline in the quality of products and a very high increase to their prices the more regulations enacted. Another good example is Wal Mart, while people bad mouth them all the time the reality is that they fill a void caused by smaller businesses regulated to the point of bankruptcy, yet all those who don't like Wal Mart scream for more regulation, well, Wal Mart can afford to follow any regulation tossed at them already, the businesses they replace are those who cannot afford to work within the regulations that already exist.

    Most people say "follow the money" but stop at the person they want to blame, never really looking at the top, which in the US is the government really. There is no one else higher than them here now, and they keep trying to take even more power each day.
     
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  8. KittenKoder
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    KittenKoder Senior Member

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    Oh, and I know about the governments moving to Open Source now. ;) It makes me happy when they do.
     
  9. edthecynic
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    edthecynic Censored for Cynicism

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    What a load of BALONEY!

    You hate MS and the American government so they have become your scapegoats for everything.

    In the 1980s Apple dominated the education and printing markets and those two markets were the main reason Apple was able to survive against the MS monopoly until the iPod came along.

    As I recall, egghead's decline was due to it being easily hacked.

     
  10. KittenKoder
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    KittenKoder Senior Member

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    Ed, Wicrapedia is not a reliable source.
     

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