capitlism and monoplies

[KittenKoder]

To be fair, I don't think it's generally being argued that all markets are prone to monopoly (I sure there are people arguing that, and those people are foolish), but that certain types of markets are prone to monopoly.

Generally, industries which require enormous capital expenditures up front are more prone to being monopolized. However, technology can dramatically change industrial structure. It was once thought that telecommunications was a natural monopoly. That clearly is no longer the case.

Also, companies whose products become the industry standard are more liable to become monopolies. But eventually, they too will succumb to technology. I would be surprised if Microsoft exists in its current form 20 years from now.

Microsucks will likely survive solely on it's government contracts at that time, in spite of people buying computers who already have the OS installed many are installing something else once they get the machines home. Hell, thanks to Open Source programmers you can install any OS on any machine now. Open Source and Freeware will likely be responsible for getting rid of Microsucks power, combined with the toys called Mac and the better customer support Apple offers, Microsucks has had to increase their ad campaigns, even to the point of bribing everyday people to endorse their product. While Mac doesn't need more than their simple campaign and Linux is spreading through word of mouth. With so many versions of Linux people have more options with the OS, they can choose their flavor and level of control. It will be fun to see what happens, Windoze 7 is likely to flop worse than XP did.

 

[eagleseven]

The government exists to penalize fraud and prevent monopoly development. Thus, any monopolies that do exist do so at the behest of our politicians.

Arguably the oldest monopoly is the protection racket, now run directly by the government. In this sense, the government is no better than any mafia or gang. This is why the IRS is as hated just like a loan shark.


You must pay your protection money to the government, or be physically punished.

 

[edthecynic]

It is a flaw of doctrinaire free marketers' reasoning that monopolies cannot exist in a truly free market. Of course they can. Market power can be used to throttle and destroy competition.

Over very long periods of time, technological change will render monopolies obsolete. However, until that happens, companies can extract enormous monopolistic rents from consumers, transferring wealth from consumers to shareholders in the monopoly.

On the other hand, there is no evidence nor reason to believe that a free market is prone to monopolies, as some on the Left argue. Innovation is a powerful force and destroys monopolies over time.

The Rockefeller family has controlled the Oil and Banking monopolies for 100 years now, and while technology might eventually make the Oil monopoly obsolete, I highly doubt the technology will ever break the Banking monopoly.

 

[edthecynic]

The government exists to penalize fraud and prevent monopoly development. Thus, any monopolies that do exist do so at the behest of our politicians.

Arguably the oldest monopoly is the protection racket, now run directly by the government. In this sense, the government is no better than any mafia or gang. This is why the IRS is as hated just like a loan shark.


You must pay your protection money to the government, or be physically punished.

Government with present laws can only prevent OWNING a monopoly.
Rockefeller has learned how to CONTROL a monopoly without owning it through phony charities and banks. Remember, people may OWN 401Ks and pension funds, but they don't vote the stock in those funds.

After Rockefeller was forced to divest his OWNERSHIP of Standard Oil, stockholders tried to oust him from the Board. He only OWNED 25% of the stock, but he CONTROLLED and voted 60% of the proxies.

 

[KittenKoder]

The government exists to penalize fraud and prevent monopoly development. Thus, any monopolies that do exist do so at the behest of our politicians.

Arguably the oldest monopoly is the protection racket, now run directly by the government. In this sense, the government is no better than any mafia or gang. This is why the IRS is as hated just like a loan shark.


You must pay your protection money to the government, or be physically punished.

This is so very true. The only reason monopolies exist in our country is because of the regulations that are preventing start up companies and competition from moving in. People want to blame the corporations and the only time they even consider that the government is really responsible is when someone other than their "flavor" of politician is office. When Bush was in office we saw it with his faithful followers, now we see it with Obama. They don't want to see the reality that even their flavor of politician is a liar.

 

[midcan5]

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....

Enlighten yourself: The Conservative Nanny State

The ethics of the free market: why market liberalism is wrong.
Boston Review — Dean Baker: Free Market Myth

 

[eagleseven]

The government exists to penalize fraud and prevent monopoly development. Thus, any monopolies that do exist do so at the behest of our politicians.

Arguably the oldest monopoly is the protection racket, now run directly by the government. In this sense, the government is no better than any mafia or gang. This is why the IRS is as hated just like a loan shark.


You must pay your protection money to the government, or be physically punished.

Government with present laws can only prevent OWNING a monopoly.
Rockefeller has learned how to CONTROL a monopoly without owning it through phony charities and banks. Remember, people may OWN 401Ks and pension funds, but they don't vote the stock in those funds.

After Rockefeller was forced to divest his OWNERSHIP of Standard Oil, stockholders tried to oust him from the Board. He only OWNED 25% of the stock, but he CONTROLLED and voted 60% of the proxies.

Thank you for identifying yet another way our government continues to fail us.

Although modern moguls have learned it is far easier to purchase their politicians directly...

 

[eagleseven]

The government exists to penalize fraud and prevent monopoly development. Thus, any monopolies that do exist do so at the behest of our politicians.

Arguably the oldest monopoly is the protection racket, now run directly by the government. In this sense, the government is no better than any mafia or gang. This is why the IRS is as hated just like a loan shark.


You must pay your protection money to the government, or be physically punished.

This is so very true. The only reason monopolies exist in our country is because of the regulations that are preventing start up companies and competition from moving in. People want to blame the corporations and the only time they even consider that the government is really responsible is when someone other than their "flavor" of politician is office. When Bush was in office we saw it with his faithful followers, now we see it with Obama. They don't want to see the reality that even their flavor of politician is a liar.

Indeed. The monopolistic company is fulfilling their stated goals; maximizing profit. Indeed, every company chairman dreams himself a monopoly.

The politician who forfeited his role as protector for personal profit is the true danger. Worst still is the politician actively seeking to build himself a monopoly/monopsony via nationalization of industry (ie Obama).

 

[KittenKoder]

The government exists to penalize fraud and prevent monopoly development. Thus, any monopolies that do exist do so at the behest of our politicians.

Arguably the oldest monopoly is the protection racket, now run directly by the government. In this sense, the government is no better than any mafia or gang. This is why the IRS is as hated just like a loan shark.


You must pay your protection money to the government, or be physically punished.

This is so very true. The only reason monopolies exist in our country is because of the regulations that are preventing start up companies and competition from moving in. People want to blame the corporations and the only time they even consider that the government is really responsible is when someone other than their "flavor" of politician is office. When Bush was in office we saw it with his faithful followers, now we see it with Obama. They don't want to see the reality that even their flavor of politician is a liar.

Indeed. The monopolistic company is fulfilling their stated goals; maximizing profit. Indeed, every company chairman dreams himself a monopoly.

The politician who forfeited his role as protector for personal profit is the true danger. Worst still is the politician actively seeking to build himself a monopoly/monopsony via nationalization of industry (ie Obama).

This is the true reason I am against Obama's healthcare bill, in spite of my taking other angles in debate. He seems to be setting himself up to gain a monopoly on health insurance in some way, not sure how yet, but it seems likely and is very possible. Anytime the government wants to enforce more regulation it usually winds up being a way to support one particular company over all others, and always benefits that company unfairly.

 

[Polk]

To be fair, I don't think it's generally being argued that all markets are prone to monopoly (I sure there are people arguing that, and those people are foolish), but that certain types of markets are prone to monopoly.

Generally, industries which require enormous capital expenditures up front are more prone to being monopolized. However, technology can dramatically change industrial structure. It was once thought that telecommunications was a natural monopoly. That clearly is no longer the case.

Also, companies whose products become the industry standard are more liable to become monopolies. But eventually, they too will succumb to technology. I would be surprised if Microsoft exists in its current form 20 years from now.

I agree with you on both of those counts.

 

[Polk]

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.

That fear has nothing to do with Microsoft and everything to do with consumers wanting ease of use.

it also has to do with MS using its $$ and influence to push lies onto people about Linux. see this recently:

Microsoft 'indoctrinates' Best Buy workers with anti-Linux 'lies' -- DailyFinance
Microsoft: Yep, we teach Best Buy to trash Linux -- DailyFinance

saying many applications don't work even though they could be run in Wine or an alternative could be used. Also, especially with ubuntu, linux *is* easy to use now and it will do everything for you, but MS's propaganda machine is still running strong.

I know this. You know this. Does the average Joe on the street know this? No.

 

[Polk]

To be fair, I don't think it's generally being argued that all markets are prone to monopoly (I sure there are people arguing that, and those people are foolish), but that certain types of markets are prone to monopoly.

Generally, industries which require enormous capital expenditures up front are more prone to being monopolized. However, technology can dramatically change industrial structure. It was once thought that telecommunications was a natural monopoly. That clearly is no longer the case.

Also, companies whose products become the industry standard are more liable to become monopolies. But eventually, they too will succumb to technology. I would be surprised if Microsoft exists in its current form 20 years from now.

Microsucks will likely survive solely on it's government contracts at that time, in spite of people buying computers who already have the OS installed many are installing something else once they get the machines home. Hell, thanks to Open Source programmers you can install any OS on any machine now. Open Source and Freeware will likely be responsible for getting rid of Microsucks power, combined with the toys called Mac and the better customer support Apple offers, Microsucks has had to increase their ad campaigns, even to the point of bribing everyday people to endorse their product. While Mac doesn't need more than their simple campaign and Linux is spreading through word of mouth. With so many versions of Linux people have more options with the OS, they can choose their flavor and level of control. It will be fun to see what happens, Windoze 7 is likely to flop worse than XP did.

Microsoft has recently increased it's ad buys, but they're still not marketing nearly as heavily as Apple does.

 

[KittenKoder]

Generally, industries which require enormous capital expenditures up front are more prone to being monopolized. However, technology can dramatically change industrial structure. It was once thought that telecommunications was a natural monopoly. That clearly is no longer the case.

Also, companies whose products become the industry standard are more liable to become monopolies. But eventually, they too will succumb to technology. I would be surprised if Microsoft exists in its current form 20 years from now.

Microsucks will likely survive solely on it's government contracts at that time, in spite of people buying computers who already have the OS installed many are installing something else once they get the machines home. Hell, thanks to Open Source programmers you can install any OS on any machine now. Open Source and Freeware will likely be responsible for getting rid of Microsucks power, combined with the toys called Mac and the better customer support Apple offers, Microsucks has had to increase their ad campaigns, even to the point of bribing everyday people to endorse their product. While Mac doesn't need more than their simple campaign and Linux is spreading through word of mouth. With so many versions of Linux people have more options with the OS, they can choose their flavor and level of control. It will be fun to see what happens, Windoze 7 is likely to flop worse than XP did.

Microsoft has recently increased it's ad buys, but they're still not marketing nearly as heavily as Apple does.

However, people are started to request pre-installed Ubuntu more in place of Windoze, just most businesses can't comply yet because of contracts with Microsucks. I am hoping fewer of these companies renew their contracts when they run out, and hopefully Microsucks will get back to developing a decent Windoze instead of the crap they have been as a response to the increase in demand for Linux. The problem is that since Linux is Open Source there is no one company to negotiate contracts and pay the stores to stock it. The market tracking does not cover the number of people who install over the pre-installed OS, so it doesn't truly show the demand for an OS, though as for numbers more people are switching to Linux than are switching to Windoze, so there is hope.

 

[Polk]

I agree with that choice and competition is a good thing. Frankly, I think Microsoft is already starting to feel the pressure, as 7 is a huge improvement over Vista.

 

[KittenKoder]

I agree with that choice and competition is a good thing.

Then do you support regulation? Regulation is what destroys choice and competition.

 

[Polk]

I agree with that choice and competition is a good thing.

Then do you support regulation? Regulation is what destroys choice and competition.

I do support some regulations, as choice and competition are not absolute virtues.

 

[Bern80]

The strange fact that is often overlooked is that monopolies cannot exist without the government controlling who can and cannot have a business.

not sure I get this...

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.

In this instant the government is the consumer. Don't they have a right, just as any consumer, to purchase what they believe to be the best product? Further why did Egg Head back the wrong horse so to speak? You say there software was not compatibie MS-DOS. At some point they would have had to decide what operating system they would run their software on and they apparently just plain chose wrong.

 

[Oddball]

The strange fact that is often overlooked is that monopolies cannot exist without the government controlling who can and cannot have a business.

Beat me to it.

Moreover, gubmint has the ultimate monopoly: The corner on the legal use of proactive physical force.

 

[blu]

The Rockefeller family has controlled the Oil and Banking monopolies for 100 years now, and while technology might eventually make the Oil monopoly obsolete, I highly doubt the technology will ever break the Banking monopoly.

get rid of fractional reserve banking and watch their schemes crumble

 

[trueblue]

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.

In the United States, it is legal to have a monopoly but illegal to obtain or maintain a monopoly through "bad acts". The conspiracies and cartels you accuse above are illegal and can be penalized or broken up if proven in a suit brought by the Department of Justice, Federal Trade Commission or direct buyers of those products. Both the DOJ and FTC have direct responsibility for controlling monopoly (the FTC focuses on monopoly by merger), though our system also depends on lawsuits from suspicious buyers.