I feel your pain, Lemur. That’s why I’m loathe to participate in these discussions anymore. I am expected to believe that the exact same populace that is enlightened enough to elect benevolent nannies who do only good on behalf of everyone simultaneously is too stupid to think its way out of a paper bag when making personal choices. Blech.
If you believe that that is a general sentiment, and not one held solely by you and one or two other consumers, then I’d say you have an excellent pitch to make to an investment capitalist, don’t you?
Well, this is what an ideal libertarian government would do. In a real-world situation, it seems likely that one of the disadvantages of the growth of monopoly power would be the scope it allows to monopolists to interfere with the ideal workings of government.
In real-life markets, though, doing research often requires substantial resources. The people who effectively provide the permission to do research are those who have enough resources for it.
In the real world, though, there are often have barriers to entry.
Lot of that going around, it seems.
That’s the basic problem I have with most libertarian arguments: the standards of probability they employ are so often different for libertarian and non-libertarian systems.
Because there aren’t any existing truly libertarian governments, libertarians generally deal with hypotheticals about them by envisioning what an ideal libertarian government would do. But the ideal libertarian governments get compared to real-life non-libertarian ones, with all their real-life flaws, inefficiencies, and compromises.
They probably didn’t think those newfangled contraptions would take over. Besides, they weren’t a unified monopoly, to my knowledge.
The monopolists; if they have all the money, they control it. There is not, never has been, and never will be a significant free market. People are not mindless; they will manipulate the market for their own ends; if it’s not the government, it’ll be the corporations or the wealthy. This ideologically pure free market people keep talking about is as plausible and practical as the perfect Communism of the Marxists.
Capitalism in it’s purest form really isn’t much more than a more sophisticated form of feudalism.
What’s to stop it, save the government ?
Third world “failed states” come to mind, where the wealthy live in fortified compounds and make their own law. Or kleptocracies, which is what you would get if a single monopoly took over a whole country; the leader would just call himself the CEO instead of President-for-life.
Why are we talking oil/gas/petroleum, when the classic case involves water rights?
What? You can’t seriously believe this? There are plenty of markets for which natural monopolies would form. Off the top of my head:
Computer Processor Manufacturers:
Assuming Intel, AMD, IBM and Motorola merged into one huge processor company called IntMDBMorola. How exactly would a new competitor get started? The cost of a single fab is around $3bn and rising as designs get more complex. The design of a modern processor has taken over 50 years to refine and even an optimistic estimate would be that you couldn’t shorten it to below 10 years. And even then, your trying to hit a moving target. In order to even catch up, you have to either hire more or better engineers than IntMDBMorola. During those 10 years, you can’t sell a single thing since your processors are several thousand times slower than commerically available ones. And once you reach that point, after, quite conservatively having spent probably around half a trillion dollars, what benifits do you reap? Miniscule profits because, in a competitive scenario, you can only afford to sell at market price. How are you going to recoup your investment?
And what if IntMDBMorola decide to buy on TSMC and all the other 3rd party fabs? You won’t even have place to prototype your designs, adding even more costs. What if they put a gentle word out saying any processor engineer who even contemplates working for another company is never going to get a job at IntMDBMorola? Processor engineering is a highly specialised field that requires a significant educational investment. Are you going to risk throwing your hat in with the new guys and potentially becoming unemployable and wasting all that education? Of course not. Your going to take the safe option and work with IntMDBMorola. So where are the staff going to come from?
Airplane Manufacturers:
Assuming Boeing, Airbus, Lockheed Martin and a whole bunch of smaller companies merge into Bobustin (EDS and NASA presumably get dissolved). Again, it’s the same deal. The technological investment of these companies is mindboggling and you would have to duplicate all of this from scratch. a 747 class plane costs about $200m to build and thats with the huge economies of scale that Boeing has. You would need the same staggering amount of initial investment just to catch up and no feasible prospect of any significant amount of profits even if you do catch up. How exactly do you propose this happens?
And what happens once these companies become monopolies? Boebustin could simply announce to every airline in the world that they can either sell out at pennies to the dollar or Boebustin will just refuse to sell them airplanes. Whats an airline to do? You can’t run an airline without planes so the only course of action is to get folded into Boebustin. Same for courier companies like Fedex and UPS, they have no choice but to get absorbed by Boebustin. What next? Boesbustin could simply refuse to fly into any airport that does offer to get absorbed also. Whats the use of an airport without airplanes? So what about cities that depend on air travel to even survive? like Hawaii? Can Boebustin buy an entire city-state?
The same with IntMDBMorola. Once you have control of the processor market, you can leverage that to take over the entire electronics industry. Once you control the electronics industry, you basically have all of modern society by the balls.
Is there a way to fight back? Can people just find alternatives like Libertarians say? Well, maybe you can for oil but I’m finding it pretty freaking hard to think of many alternatives to microprocessors.
The only reason why these companies aren’t monopolies today is due to anti-trust regulation. Intel isn’t allowed to buy out AMD, Boeing isn’t allowed to merge with Airbus. If those regulations were removed, then these companies would merge in a heartbeat because the advantages are so obvious.
Bolding mine. Which is part of what I meant when I said there is no such thing as a true free market. Corporations are run by people who want to make money, not uphold some ideological vision of a perfect free market. If they can use tactics like you describe to suppress what free market there is, they will.
Libertarianism seems to have the underlying assumption that the only source of power/oppression is the government, and that non-government groups/people would never, ever oppress or exploit people on their own.
:smack: Forgot my original point; why I bolded that section. Since it’s so obvious, that’s precisely what will happen; you don’t need to postulate any sort of ideology or agenda.
It’s like the informal version of price fixing; a government can crack down on some CEO’s who get together and hammer out some sort of formar deal to fix prices, but it can’t stop the same group of CEO’s from simply realizing the advantages of matching prices with each other, and avoiding a price war. In other words, they undercut the free market, because the advantages are obvious. The idea that the perfect free market will triumph if the evil, evil government gets out of the way is simply wrong. It assumes people and corporations are as mindless as so many competing bacteria, and won’t try to manipulate the market with or without the government.
I can’t tell if you’re being serious or not, since if it’s meant to be snarky, I don’t get it. But how about responding to the rest of the post (where monopolies result in higher prices than with competition, without harming the market)?
Der Trihs: The reason why cartel situations like you postulate (with price-fixing instead of outright monopolies) don’t usually work in practice is because the benefit to one of the companies from reneging on the deal is too great – they immediately get the entire market, and hence higher profits, even if prices are lower. Of course, this doesn’t work in a true monopoly situation, because there is no other entity to renege.
Only if you assume all the other producers are retarded. The result of one producer renegging is all of them dropping their prices to marginal cost and none of them making any profit.
PS: What about the DeBeers cartel as an example of an extent, non-government supported, monopoly? Sure, they don’t control all of the market and the threat of artificial diamonds might just break them in the near future but they have had a very successful grip on the market for over 70 years which shows many signs of monopolistic behaviour.
Is there any reason why Debeers would not have existed in libertopia?
Thanks for making my point. One, older businesses are usually blindsided by technological advancements. If your hypothetical monopoly were too exist, it’s quite likely that they would fail to recognize where their competition would come from. Two, you’re exactly right that the horse and buggy makers didn’t have a monopoly. You should examine history a little more closely and you’ll see that no monopoly of the sort you assume has ever existed. Your hypothetical is simply not rooted in any sort of real-world scenario.
I wasn’t aware we were talking about a monopoly that controls all the money in a society. How would this mythical monopoly work if they controlled all the money?
Without government backing them, companies cannot exploit or coerce anyone. You have a choice whether or not to patronize a certain company. No one, except the government, can force you to deal with it. Unless government is supporting a businesses coercion or exploitation, that coercion or exploitation will fail.
Proof, please. Sure, I don’t expect you to produce documents from these companies saying, “we’d like to merge and rule the world but the government won’t let us,” but you could show me where in history where a similar situation has ever happened.
That’s hypocritical duplicitous crap. It’s the antis who toss out the Giant Squids, the Mean Old Men Who Own All The Water On Earth, and the Magical Monopolies That Form Without Benifit Of Government Favor And Subsidy. Just because you’ve fucked up the real world with your crazy inconsistent unprincipled hodgepodge of idiots voting for revolving door candidates, don’t blame us.
They often do work, for quite a while. One company won’t get it all; they’ll just kick off a price war, and they’ll all lose. They are generally smart enough to see that, so the system will generally last until an outsider breaks it up. In fact, IIRC Cecil wrote a column on just that sort of situation; involving the informal price fixing of cigarettes. In that case, a price war was kicked off, so the system isn’t perfectly stable. It would be more stable in Libertaria, since they wouldn’t need to pretend to not be cooperating, and could set up formal agreements instead of relying on unspoken understandings. ( on preview, what Shalmanese said )
Besides, it’s almost irrelevant; I was mainly using that sort of thing as an example of how corperations can and will subvert the free market, and that eliminating government interferance won’t make it any freer. A giant merger mania frenzy like Shalmanese suggested would do just as well.
Actually, you don’t generally want a total monopoly, due to market fluctuations. If, say, the market tends to fluctuate 10% in demand, you want 90% of the market locked down, and let the little guys take up the slack. When demand goes down, they lose profits or go out of business and you lose nothing. Corporate cannon fodder, in essence.
That was then, this is now. In the modern world, it’s pretty common for a corporation to buy up and/or patent rival technology, and just forbid it’s use by anyone. If the buggy makers had aquired the rights to all automotive technology and sat on it, do you really think it would have replaced the horse and buggy any time soon ?
“Do what we say or starve.” Assuming they just don’t send hired men with clubs or guns after you. Besides, if the are no competitors for a product you need, they can raise they price and you’ll have to pay.
:dubious: The Gilded Age ? Most of the history of capitalism ? That’s why antitrust laws were written.
Cite, please.
How will these companies prevent workers from getting another job? Sure, in your world, one company controls all the money, but let’s talk about a situation that’s more in line with reality.
Exactly the situation I’m talking about. It’s illegal to kill people. Unless the government is colluding with the business, your scenario can’t happen.
Please provide examples of this.
Please provide examples. I know you think they are out there, but if you actually question the liberal propaganda fed you in school and in the media about capitalism and the gilded age, you would see the case for antitrust laws is pretty thin. The history simply doesn’t support your view.
Please calm down, Lib. There’s nothing hypocritical or duplicitous about pointing out that libertarians frequently compare ideal libertarian systems (because there aren’t any existing governments that they consider sufficiently libertarian to serve as an example) with real non-libertarian ones.
Your own comment about “idiots voting for revolving door candidates” is a case in point: you’re criticizing non-libertarian government systems for flaws and abuses present in real-life examples of them, such as our own.
Yet if there were any real-life libertarian governments, since we’ve still got the same “crazy inconsistent unprincipled hodgepodge of idiots” composing the real-life human population, we’d doubtless see similar flaws and abuses in them. Comparing the imperfections of the real world to an ideal Libertaria that conforms to libertarian theory just is too skewed to be useful.
Of course, you’re quite right that what generally starts these futile comparisons is a hypothetical question about libertarianism from non-libertarians, such as the one in the OP. I guess the only true answer to questions like “How does a libertarian society deal with…?” is “We don’t know, because there aren’t any libertarian societies.”
Do you mean to say that you popped in here for no reason other than to state the blatantly obvious? Would your contribution to a thread on quantum mechanics be to remind everyone that quantum physicists deal with mathematical models rather than with what we observe in the real world? The OP is asking about real world things, like gasoline and water, and what hypothetical libertarian societies would do about monopolies that produced them. What can we do to please you, ignore the question? You make it sound like we gloss over the problems a libertarian society might have while pointing out the disadvantages of real world systems, a charge that couldn’t be further from the truth. I’ve often pointed out how hard life could be in a libertarian society: hard work, hard choices, hard consequences. I’ve talked about the level of vigilance required from the people. I’ve talked about the corruption that will inevitably infiltrate the government. I’ve talked about the trauma that people dependant on government would endure were there to be a sudden switch to libertarianism. There’s enough to discuss here without stating obvious things like red is a color, or implying untruths about dodging questions with invalid comparisons.
I think there’s some truth in it. For example, in your very first post in this thread, you said:
That, I submit, is exactly the sort of unrealistic ideality I’m talking about. That kind of theoretical scenario just isn’t a meaningful basis of comparison for the real-life failures and abuses of actual non-libertarian societies.
Right! Government has never colluded with business, and when businesses are even more powerful than they are now, I’m sure government will be even less influenced by business.