It takes a really high gas price before most people will curb their travel habits or replace their vehicle with one that has better mileage.
But forgetting about gas, what about things that are truly necessary for life? Water, for example. If someone is selling water, what is a “market” price for something that human beings need to live?
And what about healthcare itself? If you are a United States citizen and you live here, you are most likely subject to a health insurance marketplace that may not be as free as the wild west but is certainly one geared for profit at several levels (unless you’re a veteran or can partake with Medicare or Medicaid - all of which despite their own problems still grade out a lot better among participants than the main system). What have we got from this? Much higher costs and not as good outcomes.
Even if you remove the “pay for this or die” component (which you really shouldn’t, but I’ll humor you) it’s awful difficult to shop around for a new liver.
It seems to me that in this hypothetical village of Libertaria, he who controls the water and healthcare and anything else with inelastic demand would have a lot of power. Unchecked (and they’re all about that power being unchecked), that could easily… I don’t know… Trample the freedom of everyone else who needs to commute to work, have clean water or hope to not die?
Am I missing something here or do the people who want to privatize everything do so without any guarantee that corporations would be ethical when it comes to these things? History shows that when people are in charge of such things they have no problem doing terrible things. And when they did it took a government to step in to make things fairer. And some things it was found were better handled by the government itself.
Why would things be any different in Libertaria without a pesky government to either handle those kinds of things themselves or to make reasonable restrictions to allow the population to actually keep their freedoms after all?
Not that I’d want to live in Libertaria, but the argument goes that even monopolies like clean water will be busted when the market gets too far out of hand. Someone will drill a well, open an alternative clinic, etc., and the market will eventually stabilize.
Sure, some people may die before that happens, but we’re talking long-term here.
Yes, it’s a bedrock libertarian belief (with some factual basis) that monopolies can’t exist without government-granted privileges. The extent to which this is true depends, I would think, on whether the wealthy and powerful in Libertaria are able to use private armies to become de facto warlords.
How to deal with externalities (like water pollution) is a contentious issue; anarcho-capitalist types would resolve everything through private courts, Austrian types permit regulations that establish the “rules of the game” for the market, and so on.
When Martin Shkreli raised the price of daraprim from $13 a pill to $750 a pill, many people were stuck. The reasons are that the FDA has a lot of regulatory hurdles before you can enter the generic pharmaceutical manufacturing business, and the US government makes it illegal to import drugs from overseas. As a result, both domestic and international suppliers couldn’t enter the market to drive prices down.
Daraprim costs about a nickel a pill in Brazil and India (about a dollar a pill in Canada) and nobody is going to pay $750 a pill if you can get it for less than $1 a pill internationally, but due to the government regulations above people can’t just buy the cheaper version. If a competitor wants to start manufacturing it cheaper, they can’t because all the regulations keeping them out of the manufacturing business. Supposedly a lot of the generic drugs that are seeing their prices get jacked up are drugs that have a very small market, so there isn’t much incentive for more than 1 generic manufacturer to enter the marketplace, hence a de facto monopoly on the legal supply. If pharmacies and hospitals want to buy it overseas to distribute to consumers they can’t because that is illegal. One of the few saving graces is that even though it is illegal, the US government generally doesn’t prosecute Americans for buying non-scheduled drugs from overseas nations. So people just go to places like pharmacychecker and buy it if the get a script.
So (I’m not an expert on libertarianism) but libertarians tend to believe that you need government support to have a monopoly, and in a truly free market as the prices rise then various domestic and international alternatives become more affordable and appealing. If the FDA made it easier to manufacture generics and/or Americans could legally buy drugs from overseas, then they never could have gotten away with jacking the price up to $750 a pill when you can buy the same drug for a few pennies overseas.
Libertarians also tend to support price gouging during natural disasters, due to belief this will cause other suppliers to enter the marketplace and increase supply while driving down prices. Same reason. Demand may be inelastic, but as the profit motive for suppliers goes up, more suppliers enter the marketplace.
I think one can learn a lot about monopolies by studying Ma Bell and, before that the era, the era of trust busting.
It’s easy to forget to address the methods that monopolies have at their disposal for maintaining and extending their monopolies.
As for the suggestion that monopolies will eventually die due to some form of erosion or new technology, I’d point out there was no sign of that happening within the lifetime of people who wanted telephones.
In the case of Ma Bell, one can say that the internet, or other new technology would have finally busted them anyway. However, it seems even more likely that the wealthy monopoly would have had the power, knowledge and money to simply have expanded to include other forms of communication as they became possible. After all, they were one of the major corporations doing the research.
I can’t speak for telephones, but one tool that internet providers use to keep new providers out of the market is tons of lawsuits. If a new provider enters the marketplace, they try to tie them up in court to bankrupt them and tie them down in red tape so they can’t enter the marketplace.
Also the internet providers agreed not to compete. As a result most areas only really have 2 providers. One cable provider and one DSL provider. Verizon and AT&T do not compete in the same marketplaces, neither do Time Warner and Comcast. Ideally each urban area should have at minimum 4 providers (2 cable and 2 DSL), plus whatever satellite providers there are. Even dense urban areas only have 1 cable and 1 DSL provider in many cases.
Another tool they use is getting cities and states to pass laws saying they will not try to create a publicly funded broadband network. Now that a public broadband network that costs $70/month for 1Gbps is possible, lots of areas can’t create them due to these clauses.
So on the subject of internet providers, lack of competition and using the government to keep competition out of the marketplace (via the courts and legislation) is a major tool.
I have no idea what all tools the telephone companies used, but I’m guessing they did something similar. The problem is a lack of market forces due to lack of competition, and using the government to prevent competition via the courts and government regulation.
I remember as a college kid having my Ma Bell land line phone. Their phone was the only option. It was a real clunker - not surprising as there was no alternative. It was a big deal when one could finally go to a store and buy a phone.
It reminds me a little of set top boxes - restricting access by requiring proprietary hardware at the customer end of the line.
There is only one legitimate obstacle to libertarianism, and once that obstacle is eliminated, it will work perfectly. The obstacle is that there are people.
The reason we were one of the major corporations doing the research was that we were a monopoly. Notice how the research stopped getting done when the monopoly was gone. I lived through this - and remember most of Bell Labs was development - only Area 11 was real research.
The monopoly - which was regulated, remember - had some real benefits, like getting phone service out to people like farmers who could never have afforded it if not subsidized. But it had some drawbacks also, and not just in keeping innovation out of the market. I heard some stories from Bell System people about how it sucked to be one of their business customers. “Don’t churn the market” was their motto. Old dial phones worked forever, which is good and bad. I went to a seminar after the split up on how to make things less reliable.
There are many natural monopolies. Telephone service no longer requires a huge infrastructure of landlines, but electric power does. Nobody will invest the huge sums to build parallel lines since the existing monopoly can just lower prices temporarily to kill the competitor. Roads and dams are natural monopolies. (The idea of major dams being privately built may seem absurd, but hyperliberatrians argued against public dams right here at SDMB.)
And there are monopolies which acquire power by chance and maintain a monopoly by exploiting that power. Microsoft is a good example; they made contracts with PC manufacturers that effectively forced PC buyers to pay for Windows whether they wanted it or not. Microsoft used its power to acquire companies like Forethought (PowerPoint), Hotmail, Visio, aQuantive, Fast Search & Transfer, Skype, Navision, LinkedIn and Nokia Phones.
Microsoft did not acquire its monopoly power with U.S. government help; neither did the Standard Oil Company; neither did U.S. Steel. Given these facts one wonders what the Libertarians mean when they write that all monopolies derive from government action.
I’ve wanted to write a novella in which an old Indian Treaty cedes “all the air that passes above Dakota” to Ogwash, Chief of Dakota. Ogwash’s heir goes to court arguing that this includes all air on the planet and soon Ogwash Oxygen has a quadrillion-dollar-plus market cap. In the novella, Ogwash is praised for its benevolence and for the resulting stock market boom. Oxygen consumers who refuse to pay are free to buy oxygen elsewhere but are outfitted with face locks to prevent them from poaching Ogwash’s oxygen.
Just look to the early 20th century robber barons.
They didn’t just own a particular company. They owned multiple steps of the process.
For instance they didn’t just own an iron mine. They owned the railroad and shipping and smelters.
Iron getting too pricey so you figure you will dig your own mine? Good luck with getting your product to market since no one will ship your goods and no smelters will buy them.
Left to itself the market would resolve into a few gigantic megacorporations that own most of everything. You can then have a car in any color you want as long as it is black.
An interesting discussion, but it uses a pretty extreme definition of libertarianism. Many are moderates who advocate limited government intervention. This is not the same as no government intervention, which makes little sense in an international society of laws and trade. As always, there are different subtypes encompassing left or right wing views and variations on which interventions are more or less acceptable.
Even if one takes a more extreme view, if someone has a monopoly on an essential inelastic good such as water or fuel, there may be other methods of intervention apart from legal action by government, which might be effective but disorderly.
Your examples are poor. The demand for water is very elastic. If the price goes up people will stop washing their cars so often, stop watering their lawns so often, take shorter showers, change the type of crops they are growing, etc. This study finds a median long term elasticity of .64 meaning a doubling of the water price would reduce demand by 64%. Likewise long term price elasticity for oil in the US estimates are around .5 and that is likely to go higher with the fracking boom, cheap solar, and battery powered cars.
Emergency medicine only makes up 10% of the cost of medicine and the US system is nothing like an actual free market for health care.
Food is relatively free market and although people have to buy it or die, it has never been cheaper and the chief concern is that people have too much of it.
It might be true that if a company had a monopoly on water, food, shelter, or healthcare it would abuse that power, but that is not close to the real world.
They agree they are not anarchists and of course there need to be laws and regulations. The problem is when you ask them what regulations and laws we need each will give a different answer.
Laws and regulations are not (generally) brought into existence for no reason. Legislatures and regulatory bodies write rules to address a perceived flaw or shortcoming.
Libertopia would look just like the US does now in a matter of a few decades of law making as someone does something shitty and Libertopians feel a need to write a law to cover it (repeat ad nauseum till you have tens of thousands of laws and regulations). 50 years from now a new crop of libertarians pop up saying they need a society free of all these onerous regulations.
It’s not really a fatal flaw so much as a demonstration that every libertarian is necessarily an armchair libertarian because that’s the only possible kind.
I ask those in the thread who call themselves libertarians to take a stand on “Cap and Trade.”
In the 20th century, “libertarians” supported Cap and Trade, correctly viewing it as a way to bring “external costs” under the umbrella of market-based decision making.
In the 21st century, “libertarians” reject Cap and Trade, because it is a government regulation.
It’s a shame that such disparate political ideologies spell their names the same way.
The demand for water is very changeable when the supply of water is in glut. Get your population high enough, and you’ll see what a real water shortage looks like.
Happy Hogan: Tony has got them in his basement, they’re wearing party hats. This is an asset that we can put to use.
Pepper Potts: Uh-huh. So, you’re suggesting that I replace the entire janitorial staff with robots?
Happy Hogan: What I’m saying is that the human element of Human Resources is our biggest point of vulnerability. We should start phasing it out immediately.
Pepper Potts: What!?[RIGHT]— Iron Man Three[/RIGHT]