How can a Libertarian society deal with anti-competitive behavior? Particularly as it pertains to “essentials” - gasoline, electricity, water, natural gas, telephone service…
Genuinely curious, can’t think of a terribly appropriate solution.
Mods, if this is GD material, feel free to move it.
I am a libertarian but I consider myself a moderate within that philosophy. Libertarian thought hold that monopolies on the things that we list would be virtually impossible in the things you list if they weren’t caused by a byproduct of too much government regulation already. Particularly as it pertains gasoline, electricity, water, natural gas are too big of a market for any company to truly corner them. If if companies start acting in collusion, they are still subject to market forces and can’t step too far out of bounds.
I don’t remember the name of the exact concept but I will call it implicit competetion. That means that even one huge market player can’t just do whatever it wants because if it makes outrageous demands, someone will be able to start competition using that as their competitive advantage.
Things like quasi-monopolies in telephone service and utilities were created by government deals and favorable laws that allow one company to dominate possible at the legal exclusion of all others. In a libertarian socierty, those circumstances would not exist in the first place. Furthermore, the advance of technology virtually guarentees that there won’t just be one solution for a given service (cell phones versus land landlines and internet services for instance).
Short answer – there is really no such thing as a natural monopoly. The only true monopolies are created by the government. “Anti-competitive” behavior is only a problem when backed up by the coercive power of the government. Private individuals and businesses cannot stop competition.
I see. I would’ve thought the infrastructure necessary for electricity and natural gas and water providers would be too large of a barrier to entry for start-ups, though.
Of course, that’s a pre-existing condition based on how things have always been done here, but I am asking the question in a real-world context. 
The question for me, though - if there were a petroleum monopoly, for instance - and it decided suddenly to multiply its prices by one hundred - would a competitor be able to arise swiftly enough to prevent horribly devastating ripple effects? Would the competitor even be able to afford to fuel the trucks it needs to transport its fuels?
One can perhaps make the case that the phone and other utility monopolies were created (or at least facilitated) by the government, but what governmental help did Rockefeller have in creating the Standard Oil monopoly? Sure, competitors cropped up occasionally, but Standard Oil was big enough that they could afford to take a local loss long enough to drive the upstarts out of business. Once they had no competitors in a local market, they just drove the prices there high again. And it costs capital to start up a new business, so there weren’t even all that many attempts at a rivalry.
And OPEC is what, chopped liver? 
With respect to the OP and your invitation, a libertarian government would do nothing more nor less than it always does — suppress coercion in the form of initial force and deception. It isn’t in the business of designing societies. I’m sorry if that answer disappoints you, but there it is all the same. What the society would do is adjust within the enforced bounds of peaceful and honest transactions. Even generously setting aside that companies will die if they cripple their markets, you cannot make the case logically that society would necessarily be hurt by finding itself forced to develop alternate energy sources and whatnot. How do you know, for example, that it government had not propped up monopolies in everything from oil to agriculture, we would not already have a society far more advanced than the one we find ourselves struggling with? Indeed, futurists a few decades ago thought that, by now, we’d have Martian colonies and be flying around in our air cars. Perhaps they neglected to consider the heavy thumb of Senator Fatcat and the unintended consequences of his interference.
Libertarians believe in little governments but we aren’t anarchists by any stretch of the imagination (that derives from a completely different philosophy). Libertarians are big on consensual contract law that is strongly enforced. In that environment, I agree that it really isn’t possible to have a true monopoly on any natural resource that is widely available.
Libertarians believe strongly in a global economy as well. It doesn’t really matter if no one in your town can afford the trucks to do gas delivery. Some one in the world has the money, the resources, and is looking for opportunity to sweep the market out from whoever has it. I tend to agree that true monopolies cannot form on a large scale and exert the kind of influence that most people fear. Some people say that Microsoft has a monopoly. They do not and they have never. You can run a computer with every type of application you choose and never run a Microsoft product if you choose. DeBeers is the only company that deals in global commodities that I can thing of that has a semi-monopoly. That is certainly not through libertarian philosophy which is about free markets for those that have it to sell.
Libertarianism is all about natural economic law and letting natural forces take over. The system of dependecies that allow a very large and exploitative monopoly to take over simply isn’t there is you follow all of the laws up the chain.
You can’t simply arrive that negative conculsion without asking how that circumstance could have arisen in the first place given the premise. I say that it cannot happen on the scale you are talking about so the point about how it would deal with it is moot.
<mod>
Let’s monopolize GD with this discussion, shall we?
Moved.
</mod>
Oil is not petroleum. I’m just looking at things in terms of what someone deals with in their everyday life - most folks don’t deal with OPEC directly.
I appreciate the input, but the speculation about the Golden Era of mankind having been prevented/delayed by government interference seems a bit baseless.
Still. If gas prices rose a hundredfold tomorrow, and the government took a laissez-faire view of the matter, I couldn’t afford to go to work. Well, you say, then you’d lose your job and the gas company’s business would drop, since only the richest folks could afford gas, and then the gas company would have to reverse their policies or go bankrupt - and I agree with that, but I’ve already lost my job. The damage, for me, is done.
I guess I just am trying to deal with the fact that utility-type-companies wield mindboggling influence, and one short-sighted price hike could send things tumbling into the toilet.
That’s a completely inaccurate view of what actually happened with the Standard Oil “monopoly.”
A few facts on Standard oil:
– In domestic refining, Standard’s market share was going down prior to the antitrust case (it was only 64% in 1907)
– There were 137 competitors in oil refining in 1911
– The charge of “predatory pricing” was never proven
– Prices, in fact, fell during the time of Standard’s so-called “monopoly.” Kerosene, the major product during this period, saw its price fall from 30 cents a gallon in 1969 to 6 cents a gallon during this time period.
In short, Standard oil was not a monopoly and its business practices did not produce any harm to consumers. In fact, consumers benefitted greatly from Standard Oil.
You are dealing with hypotheticals that have no basis in the real world. In your situation, which would never happen, there would indeed be people who get screwed. However, since it’s completely unrealistic, I don’t think we need to worry about it.
There are plenty of situations in which government regulation – indeed, in some instances even government-sponsored monopoly – produces a better overall economic situation than no regulation (even ignoring the potential safety advantages of regulation, which is a better device for that outcome than free-market forces.)
It’s one thing to claim that there should be no anti-trust regulation on principle, another to claim that no anti-trust regulation always produces the best economic outcome. Fortunately I haven’t seen any libertarians in this thread claim that.
And yet Ticketmaster continues to exist.
Yes, illustrating that no matter how vocal the small minority of Ticketmaster-haters, most people using the service view the fees as a fair trade-off for the convenience. Either that, or people (like myself) who don’t like the fees just buy tickets at the venue box-office. There are alternatives to Ticketmaster, but they involve their own opportunity costs.
I would estimate that small minority to be 298,212,470 Americans – at least as of 2:47 EST on the first of March. Undoubtedly will be higher tomorrow.
Wouldn’t happen; the oil companies would buy the alternative energy technology and shelve it, or drive the company in question out of business. That’s what monopolies do.
Not to mention, companies would be far more powerful to begin with in a society with no safety nets. No one but the monopolies would be allowed to get together enough money to even research alternate energy. They’d be busy working 18 hour days at starvation wages until they dropped dead. And if they quit, they’d just starve that much faster.
Just like the horse and buggy makers bought out the secrets to the internal combustion engine?
In a free market, who is doing the “allowing”? No one has to seek the permission of another to do research.
Slight hijack:
Forgive me if I get this wrong, because it’s been a while since I’ve taken an economics class, but isn’t it possible for monopolies to be harmful to the market without crippling them? My understanding is that in the presence of a monopoly, prices rise to what the market will bear, whereas in the absence of a monopoly (i.e. with competition), prices fall to marginal cost. Thus, it’s possible for a monopoly to keep the market completely healthy and still create a cost to society. Just because I’m willing to pay X for an item doesn’t mean I wouldn’t be happier paying less than X.
Yes, but absent barriers to entry, if the monopoly is charging what the market will bear, X, what’s to stop me from opening a business that charges X-1? And someone else from charging X-2, X-3, and so on, until the cost falls to the marginal cost?
Yes, Exxon might be a very large and powerful corporation, but if they are making huge profits from their gasoline monopoly, why doesn’t WalMart go into selling gas? I know, WalMart would love to make the same profits Exxon does, but they can’t because they’d have to sell as much gas as Exxon, and that means twice as much gas on the market. They HAVE to compete, which means the price HAS to fall. Exxon can’t collude with the new entrant to the market without giving up their market share.
Now, it’s hard to get into the gasoline business. But it isn’t impossible, especially when you consider that it isn’t going to be Mom and Pop opening a tiny gas station to compete with Exxon, but WalMart and Target and Microsoft and General Motors and Boeing.
Monopolies are very difficult to enforce. And a situation like Der Trihs imagines isn’t capitalism, it’s feudalism. If a company can simply destroy any competitors, and keep people working as slaves, then they surely aren’t making money by selling products at monopoly prices. Everyone has to work for the corporation or they’ll die. So why does the corporation even bother to produce products for the consumer market? They won’t. They’ll just use force to make people produce goods for the use of the elite, and if the workers don’t like it the elite will crush them. And how to the elite maintain their elite status? By threating to use force against anyone who tries to stop them. Simple feudalism, practiced from the days of Sargon the Great through King Arthur, Henry the VIII and all the way up to Tony Soprano.
Fine, you believe libertarianism will invariably lead to feudalism, whatever. But asserting it to be true doesn’t make it true.