[QUOTE=Ond kaja;32611122]I didn't even mention the word "free" in my post. I didn't even imply that travelling would be free, I just made the point that roads wouldn't be funded by tolls. This implies that they would instead be funded by taxes, doesn't it?[/quote]
You seemed to imply that use of the roads would be free, or at free for you in that you are from Sweden. But a system of non tolled highways financed by taxes wouldn't work out very well as many people use the highway who are not tax payers, meaning they would either go underfunded or the tax payer would need to pay more. Non payer use of roads doesn't have a big impact on with local roads, but it certainly does with high ways.
[QUOTE=Ond kaja;32611122]Queueing for hours to pay a fee IS ineffective, but the companies owning the roads aren't affected by this, they still get their money. The travellers are forced to queue for miles because there aren't any other alternatives, especially if you're travelling a long distance.[/quote]
It really sounds like you just had a bad experience or two and are basing your entire argument off it. I can't tell you how many times I've been held up in traffic on the public highway here, and it is usually for nothing at all.
[QUOTE=Ond kaja;32611122]These roads are de facto monopolies since there aren't any alternatives (it's not like another company decides to build another road right beside their competitors). That means it's both ridiculously expensive and inconvenient to queue for hours at these toll stations, it increases the price of any products that are transported via these roads, and the quality of the roads isn't that good either. No, it's not fair for those who are forced to use these roads.[/quote]
If there was competition prices would go down. It would also improve road quality. I'm not really sure of the situation you're talking about in France with the roads, but it sounds like you're just complaining about getting stuck in traffic. I might be wrong, I don't know.
[QUOTE=Ond kaja;32611122]Uh, I won't defend the efficiency of the American government.[/QUOTE]
Neither will I. I will say that they didn't do as bad with the roads as they did with the rail roads.
[QUOTE=s0beit;32612994]Well I would have mentioned food since you need that to survive, but you're posting here so you must be eating something. You'd be dead.[/QUOTE]
Not exactly a market thing though, food
[QUOTE=Callius;32610819]I'm not sure what the legal definition of monopoly in USA is but in the UK it's over 25% market share.
With a natural monopoly say you get 1000 unhappy customers, this is not a large enough customer base for it to be viable for someone to compete, leaving us with market failure as people can't get what they want. In addition to this there are non-monetary reasons why a company can't compete even if customers are unable, see the ISP example above[/quote]
What make placing a value to it is that it somehow asserts that the government knows the exact point when a point business becomes a monopoly. They do similar things with interest rates in certain states, having them capped at a certain rate. In a way, it relates to just prices, which is that medieval idea that cited the bible that was never in the bible.
So you're pointing out that more than just a few people have to be unhappy with the monopoly for any alternative to arise? I suppose you're getting to the point of how satisfied do customers have to be to want an alternative? The answer. Who knows? Probably not much, people get sick of the same company and like to experiment.
[QUOTE=Callius;32610819]Not all companys are profit maximisers, they may be revenue or sales maximisers and so not care as you said if competition is possible then a firm may be sales maximising for several years to destroy other companys i.e. predatory pricing. While you're right about having to maintain infrastructure the advantage of being able to deny any other firm the oppertunity to compete may overweigh it, of course this depends on the level of regulation and government intervention.[/quote]
The fallacy of predatory pricing is that it is indistinguishable from just lowering your prices. Even if the business is large, say holding 26% of the market, they are going to lower their prices, especially around Christmas.
I don't think in a free market you'd have to worry about businesses keeping competition out, because the government would not be a mean. I can give plenty of examples of government helped or created monopolies.
[QUOTE=Pepin;32614670]I don't think in a free market you'd have to worry about businesses keeping competition out, because the government would not be a mean. I can give plenty of examples of government helped or created monopolies.[/QUOTE]
Honestly, if a business holds a monopoly they are going to want to keep said monopoly so they make the largest amount of profit possible. If a new business starts up you can bet in the unregulated *tear* glorious free-market *tear* they are going to use predatory tactics to block their opposition from gaining a foothold. Why on earth would they let competition arise when they could just turn their customer base against them and commit corporate sabotage?
[QUOTE=Pepin;32613829]You seemed to imply that use of the roads would be free, or at free for you in that you are from Sweden. But a system of non tolled highways financed by taxes wouldn't work out very well as many people use the highway who are not tax payers, meaning they would either go underfunded or the tax payer would need to pay more. Non payer use of roads doesn't have a big impact on with local roads, but it certainly does with high ways.[/quote]
Even if I'm not using the roads, they still benefit me. For example, if I buy tulips cultivated in the Netherlands at the local supermarket I'm benefited by toll-free highways in Germany. Someone has to transport the tulips here, and the transport route goes through Germany. If Germany decided to build tolls and impose a fee for using the Autobahn, the company would be required to sell their tulips much more expensive to account for the increased costs of transport. It would decrease their ability to compete, as I don't want to pay that much for tulips and instead decide to buy other flowers.
The Germans might enjoy lower taxes, but that doesn't really benefit anyone except those with high income. Those with a low income wouldn't be able to use the roads anymore, which is very unpractical for them, and their employers if they rely on going to their workplace by car.
[quote]
It really sounds like you just had a bad experience or two and are basing your entire argument off it. I can't tell you how many times I've been held up in traffic on the public highway here, and it is usually for nothing at all.[/quote]
Most areas of the U.S. are scarcely populated so density of traffic wouldn't be a problem there. France has 63 million inhabitants on an area slightly smaller than Texas, and the neighboring countries has more than 200 million inhabitants, obviously this affects both the density of traffic on the roads, as well as the efficiency of pay tolls. I've been to France more than once so it isn't just a single bad experience
[quote]
If there was competition prices would go down. It would also improve road quality. I'm not really sure of the situation you're talking about in France with the roads, but it sounds like you're just complaining about getting stuck in traffic. I might be wrong, I don't know.[/quote]
Well, if you build three roads directly next to each other owned by different companies then there would be true competition, but even that would be to horribly inefficient. There's usually a single road going from point A to point B, and the company who owns it has a de facto monopoly on it, so they can charge whatever they want, while still being able to keep a shoddy quality on the roads.
Monopolies can be very bad, I.E. Microsoft charging 100$ for an operating system when there is next to no competition. (I still have to buy it)
Or Monopolies, even where profits are concerned, can be very good. An example of this would be a company that has a corner on the market, they are in a unique position to have a very low profit margin yet still make large amounts of profit. Since those who buy the product have to buy their's, and a high price just keeps people from buying.
[QUOTE=NecroTitan;32622871]Monopolies can be very bad, I.E. Microsoft charging 100$ for an operating system when there is next to no competition. (I still have to buy it)[/QUOTE]
Linux
Also, $100 isn't that much for a piece of software that you use [B]every day[/B] for several years.
[QUOTE=NecroTitan;32622871]Monopolies can be very bad, I.E. Microsoft charging 100$ for an operating system when there is next to no competition. (I still have to buy it)
Or Monopolies, even where profits are concerned, can be very good. An example of this would be a company that has a corner on the market, they are in a unique position to have a very low profit margin yet still make large amounts of profit. Since those who buy the product have to buy their's, and a high price just keeps people from buying.[/QUOTE]
You also don't have to buy every one. Hell, I had xp till last week and has 95 up until xp.
On the roads: A large portion of the east coast has tool roads as well.
[QUOTE=Lonestriper;32615383]Honestly, if a business holds a monopoly they are going to want to keep said monopoly so they make the largest amount of profit possible.[/quote]
The issue here is you are correlating wants with reality. By saying what someone wants, it does not make what they want feasible. Again, we have to assume that the monopoly is not keeping out competition through legislative means, or using the government as a force, because government created monopolies certainly exist and are created quite more often than people think.
[QUOTE=Lonestriper;32615383]If a new business starts up you can bet in the unregulated *tear* glorious free-market *tear* they are going to use predatory tactics to block their opposition from gaining a foothold. Why on earth would they let competition arise when they could just turn their customer base against them and commit corporate sabotage?[/QUOTE]
These predatory tactics are the same tactics that any other business would use to progress their business. I don't really have a difficult time understanding anyone who supports antitrust because you can be sued for keeping your prices the same, you can be sued for raising your prices, you can be sued for lowering your prices. Basically you can be sued no matter what you do.
[QUOTE=Ond kaja;32621372]Even if I'm not using the roads, they still benefit me. For example, if I buy tulips cultivated in the Netherlands at the local supermarket I'm benefited by toll-free highways in Germany. Someone has to transport the tulips here, and the transport route goes through Germany. If Germany decided to build tolls and impose a fee for using the Autobahn, the company would be required to sell their tulips much more expensive to account for the increased costs of transport. It would decrease their ability to compete, as I don't want to pay that much for tulips and instead decide to buy other flowers.[/quote]
You're making more of an empirical claim more than anything, there would be other factors you'd have to consider. But what you also would have to consider is more than just you, what Germans who don't use the highway would now be able to invest in with the money they aren't spending money on the tolls. It's a bit similar to the broken window fallacy.
[QUOTE=Ond kaja;32621372]The Germans might enjoy lower taxes, but that doesn't really benefit anyone except those with high income. Those with a low income wouldn't be able to use the roads anymore, which is very unpractical for them, and their employers if they rely on going to their workplace by car.[/quote]
So the argument is that you'd rather not pay for the roads, you'd prefer rich people to do it.
[QUOTE=Ond kaja;32621372][B]Most areas of the U.S. are scarcely populated so density of traffic wouldn't be a problem there. France has 63 million inhabitants on an area slightly smaller than Texas, and the neighboring countries has more than 200 million inhabitants, obviously this affects both the density of traffic on the roads, [/B]as well as the efficiency of pay tolls. I've been to France more than once so it isn't just a single bad experience[/quote]
I still don't understand your solution, public roads would make whatever inefficiency created worse. I wonder why they haven't implemented electronic passes... But it seems like the issues in France are more attributable to the bold. There is a private market solution to tolling, and like I said I'm not sure why they aren't using it, I'm guessing regulation and that it would require automation, meaning a loss of jobs, but I just don't know that much about France's roads.
[QUOTE=Ond kaja;32621372]Well, if you build three roads directly next to each other owned by different companies then there would be true competition, but even that would be to horribly inefficient. There's usually a single road going from point A to point B, and the company who owns it has a de facto monopoly on it, so they can charge whatever they want, while still being able to keep a shoddy quality on the roads.[/QUOTE]
Which is a big reason to be in favor of private roads and property rights, to keep this from happening. If someone is making huge profits of a non so great quality product, someone is of course going to build a road right next to it that is better to divert the competition. There is a fallacy that no competition can ever arise, yet over and over, competition always arises because of the huge amount of profits people a company makes. You can offer scenarios where this becomes impossible because the monopoly owns all the land, but that scenario doesn't reflect reality.
There is far too much literature about free-market roads, and it goes into every bit of detail you could think of.
[QUOTE]Which is a big reason to be in favor of private roads and property rights, to keep this from happening. If someone is making huge profits of a non so great quality product, someone is of course going to build a road right next to it that is better to divert the competition. There is a fallacy that no competition can ever arise, yet over and over, competition always arises because of the huge amount of profits people a company makes. You can offer scenarios where this becomes impossible because the monopoly owns all the land, but that scenario doesn't reflect reality.
There is far too much literature about free-market roads, and it goes into every bit of detail you could think of.[/QUOTE]
I feel like all of these things are on too large of a scale. The free market fails when the audience becomes massive. I love the free market on a small and local scale, there are almost no flaws to it. But when you get involved in huge and somewhat idiotic tasks, like private highways, it just guarantees that one more guy is going to be super-rich. From there, quality is diminished by the need for the goods to be as cheap as possible. Happens almost every time. It's almost unavoidable that a private highway would quickly become huge, the only people who would be able to invest to compete, are the owners of other big businesses. Its the downward spiral our country has been in for years now, I honestly can't believe roads are not private here, it would certainly be a mess. Maybe that's what we need to get the trains back though.
[QUOTE=coilgunner;32626604]I feel like all of these things are on too large of a scale. The free market fails when the audience becomes massive. I love the free market on a small and local scale, there are almost no flaws to it. But when you get involved in huge and somewhat idiotic tasks, like private highways, it just guarantees that one more guy is going to be super-rich.[/quote]
It's very ironic that you're saying that because it is much the reason why free market people oppose central planning. Why would the government be any better correcting a market failure through similar means? What you're addressing is size, and you have to remain consistent. If it doesn't make sense for a group of capitalists to put forward a plan that you consider to be too big to carried out, why would you support a plan that a bunch of politicians put forward that seems to big to be carried out? You reasoning from before is inconsistent though as the next statement focuses more on that the capitalist will get rich of the plan (if it works out) while the government won't. I don't quite understand, people becoming rich is bad and the government needs to stop them through monopolization? I can see where the line of thinking is coming from, but I really don't understand why becoming rich is bad even from a progressive prospective. In that case they are paying a lot of taxes that they wouldn't have before hand.
[QUOTE=coilgunner;32626604]From there, quality is diminished by the need for the goods to be as cheap as possible. Happens almost every time. It's almost unavoidable that a private highway would quickly become huge, the only people who would be able to invest to compete, are the owners of other big businesses.[/QUOTE]
You need to go further with your arguments, and address the points that I might bring up. Like if the quality really diminishes, then wouldn't people be less likely to use the service? I'm also a bit confused as to the scenario here. What's the issue with big business investing in stuff, granted they aren't related to government. The biggest issue when discussing big business is that many people assume that any business that is large is in bed with the government. It's one thing to talk about corporatism and another to talk about free market competition in which you assume the government isn't really there.
A Monopoly can be good or bad, in the case of steam, its good. I can get any game I want without having to go anywhere. But there is always that fear of the one company slowly but surly taking over their industry, then the market, and finally the Government. Its a fear that wont happen any time soon but still has people buying from different places
[QUOTE=redback3;32587257]It really all depends on the company, if they are a monopoly then can charge as much as they damn well please and will have no fear of competition (yet), but some people have a heart, such as steam.[/QUOTE]
Imagine what computers would cost if Apple was the only one selling them....
Scary thought.
Also Steam ftw
I don't think monopolies are harmful really, unless like said before on the quoted post, if they charge crazy prices because they don't have any competition, then yes its harmful.
[QUOTE=Pepin;32624487]The issue here is you are correlating wants with reality. By saying what someone wants, it does not make what they want feasible. Again, we have to assume that the monopoly is not keeping out competition through legislative means, or using the government as a force, because government created monopolies certainly exist and are created quite more often than people think.
These predatory tactics are the same tactics that any other business would use to progress their business. I don't really have a difficult time understanding anyone who supports antitrust because you can be sued for keeping your prices the same, you can be sued for raising your prices, you can be sued for lowering your prices. Basically you can be sued no matter what you do.[/QUOTE]
You seem to obsess over mentioning government monopolies, which as far as I'm concerned you have only said are inefficient. Rather than talking about current systems with varying degrees of regulation I was talking about an unregulated system where abuses could not be addressed by a 3rd party entity, in today's case, the government and the judicial branch of said government (I say this while knowing civil cases can address some of these abuses, but not all).
Furthermore, its not the use of the predatory tactics used by both the hypothetical monopoly and the competition, rather the effectiveness. The hypothetical monopoly would have a greater ability to use these tactics due to the larger profits margins they make as compared to the competition, who would be unable to match the amounts used
[QUOTE=Lonestriper;32631043]You seem to obsess over mentioning government monopolies, which as far as I'm concerned you have only said are inefficient.[/quote]
Yes, obsessed would be the word, but more in the sense of being obsessive compulsive. It's a bit of a defect because I start getting really repetitive.
[QUOTE=Lonestriper;32631043]Rather than talking about current systems with varying degrees of regulation [B]I was talking about an unregulated system where abuses could not be addressed by a 3rd party entity[/B], in today's case, the government and the judicial branch of said government (I say this while knowing civil cases can address some of these abuses, but not all).[/quote]
What kind of abuses? I'm not exactly what I'm supposed to imply from that besides lower prices. I'm also assuming nothing to do with murder or theft as though wouldn't be market oriented. Also, the bold is a misconception. Even in anarchy there would be law and enforcers of law, there just wouldn't be government. There is a lot of literature on this, Murray Rothbard goes into a lot of detail on the subject. Where it gets confused is that anarchy is also a synonym for chaos.
[QUOTE=Lonestriper;32631043]Furthermore, its not the use of the predatory tactics used by both the hypothetical monopoly and the competition, rather the effectiveness. The hypothetical monopoly would have a greater ability to use these tactics due to the larger profits margins they make as compared to the competition, who would be unable to match the amounts used[/QUOTE]
There is a lot to it. The basic point is that that a monopoly is like the USSR, it is centrally planned and is bound to inefficiency and the inability to compete with smaller firms. There are far too many examples of businesses that seem to "monopolize" an industry, and then just crumble.
I posted an article that touches on this, I can try to find one that explains it a bit better. The basic idea is that it is impractical and irrational for a big firm to take on a huge loss trying by undercutting a smaller competitor because the the firm would be taking on huge losses due to their size. The fact that they own 95% of the market would put them at a disadvantage in that any loss they incur is much more severe than the any loss a smaller firm might incur.
[QUOTE=Pepin;32632218]Yes, obsessed would be the word, but more in the sense of being obsessive compulsive. It's a bit of a defect because I start getting really repetitive.[/QUOTE]
Those darned gubberment monopolies
[quote]What kind of abuses? I'm not exactly what I'm supposed to imply from that besides lower prices. I'm also assuming nothing to do with murder or theft as though wouldn't be market oriented. Also, the bold is a misconception. Even in anarchy there would be law and enforcers of law, there just wouldn't be government. There is a lot of literature on this, Murray Rothbard goes into a lot of detail on the subject. Where it gets confused is that anarchy is also a synonym for chaos.[/quote]
Well for one, the lack of regulation opens the workers to abuse and the market to price-fixing. Furthermore, the enforcers of law in the anarchy state are essentially a quasi-government so...
[quote][B]There is a lot to it. The basic point is that that a monopoly is like the USSR, it is centrally planned and is bound to inefficiency and the inability to compete with smaller firms[/B]. There are far too many examples of businesses that seem to "monopolize" an industry, and then just crumble.[/quote]
The USSR was a communist state in a mostly capitalist world, it was bound to fail when it took capitalist methodology and applied it to its industry. Further, saying government monopolies are inefficient is a sweeping generalisation that may hold some truth but is still sweeping.
[quote]I posted an article that touches on this, I can try to find one that explains it a bit better. The basic idea is that it is impractical and irrational for a big firm to take on a huge loss trying by undercutting a smaller competitor because the the firm would be taking on huge losses due to their size. The fact that they own 95% of the market would put them at a disadvantage in that any loss they incur is much more severe than the any loss a smaller firm might incur.[/QUOTE]
I don't see how a reduction in profits equals a huge loss, they're still making money, just at a competitive level to stamp out competition (coupled with being dicks)
Today's technique for large monopolies is to borrow so much money that banks and investors don't want the monopoly to fail so they won't lend money to potential competition. This is incredibly effective and in Canada was only stopped by changing foreign investment rules to allow more of it. Do some research on the Telecom oligopoly in Canada (Bell, Rogers, Telus, Shaw, Videotron) to see why unregulated markets don't work.
The next big unregulated market that's going to kick us in the ass later is ownership of content producers by content providers (aka local news owned by cable/satellite provider). This was a bad fucking idea and everyone knew it, but nothing got done.
Most people tend to forget that most monopolies tend to form in markets with extremely high entry requirements.
There's a reason why there's usually telecom, oil and similar monopolies or oligopolies.
To be effective you need big infrastructure, to have big infrastructure you need to have loads of cash and have been in the market for a long while.
It's relatively hard to combat these monopolies as they are in many cases self arising.
[QUOTE=Pepin;32632218]The basic idea is that it is impractical and irrational for a big firm to take on a huge loss trying by undercutting a smaller competitor because the the firm would be taking on huge losses due to their size. The fact that they own 95% of the market would put them at a disadvantage in that any loss they incur is much more severe than the any loss a smaller firm might incur.[/QUOTE]
Except when the firm is in an industry where a natural monopoly occurs, i.e. has economies of scale, where, as they produce more, marginal cost goes down. Basically, businesses in perfect competition usually produce where the marginal cost of producing more of a product meets up with the price consumers are willing to pay for a product at that quantity. (As something gets rarer, people value it more, as it gets more common, they value it less, etc.) In perfect competition, the marginal costs rise as you produce more; however, in natural monopolies, as I've said, they go downwards. If a firm is a monopoly, then, since they have tons of market power, instead of setting their prices and quantities at the socially optimal level (i.e. MC = P) they set it at MC = marginal revenue from producing more of a good, or MR. This level is, of course, at a lower quantity and higher price than the socially optimal level. If a monopoly is in place, then, whenever a new firm tries to take hold, the monopolist firm can temporarily produce a lot more of the product, reducing the price, and making it even harder for the new firm to catch up, essentially shutting them out. Once the new firm is gone, the monopolist firm can set its production levels to as they were previously.
Natural monopolies (can also) happen where having tons of alternatives would be incredibly inefficient; for instance, having 8 different types of plumbing going to your house and choosing one to use, or having 8 different types of electricity running through your house, and choosing one to use, or having 8 different roads at essentially the same starting place going to essentially the same ending place. Would there be competition, driving costs down? Yes. However, there would be tons of wasted piping, wiring, water, electricity, concrete, etc., so proposing this to be a good solution is preposterous. Sure, you could have several roads at the same place going to the same place, and they would each individually be better than if there was only one, but then you would have 16 lanes or so where only 2 lanes or so are needed.
To solve this, you need [I]some[/I] regulation on the monopolist firm, while still keeping the monopoly, as breaking the monopoly up is inefficient. (Note: you can't mandate that they produce directly at the socially optimum level, as then the price of the good would actually be lower than the [I]average cost[/I] of producing that level, so they would be losing some money. You have to set the price equal to average cost for production at that level.) In the US, for the most part, we let the monopolist firm be privately owned, but rate boards mandate the P=AC level of production. If the utilities want to raise their rate, then they have to prove that their average cost of production has risen, and then the price will rise. However, the problem with this is that the firm will never report when their average costs go down, as then they would be losing money. And since they have a guaranteed rate of return, they don't have as much incentive to make themselves better as they normally would. Elsewhere, for the most part, the monopolist firms are controlled by the government, where they produce at the socially optimum level, and just take the loss out of taxes. (They could also produce at the P=AC level, thereby not taking more money out of taxes to cover the loss, but then the price would be higher anyway, so it's not much of a difference.)
/spouting-stuff-from-my-class-notes
I think that if someone has a monopoly, if they abuse the monopoly, eventually there will be someone there to take them down. If consumers see you are abusing your monopoly, they may be quick to support any small competitors that arise.
[QUOTE=Lonestriper;32633137]Further, saying government monopolies are inefficient is a sweeping generalisation that may hold some truth but is still sweeping.[/QUOTE]
It is absolutely unavoidable. In the real world sense, as in, can they actually get things done, it's arguable. In the economic sense, input and output, waste and inefficiency define government monopolies.
Government [i]granted[/i] monopolies are often not good for consumers either (that is, "privatization" as people on the left call it, where they pick and choose companies to build prisons or make solar panels or whatever)
[QUOTE=cis.joshb;32634715]I think that if someone has a monopoly, if they abuse the monopoly, eventually there will be someone there to take them down. If consumers see you are abusing your monopoly, they may be quick to support any small competitors that arise.[/QUOTE]
It's a bit harder than that. Monopolies will often be powerful enough to simply buy out companies that might be a future competitor.
[editline]5th October 2011[/editline]
Also, there's no guarantee that they want to switch due to loyalty or the uncertainty with new things. They might not even realise that the company is abusing their monopoly.
Look at Apple which has a near monopoly on tablets and the like, charges exorbitant amounts for their products yet still has many, MANY loyal customers.
monopolies can bring lower costs to the consumer by means of economies of scale and by controlling suppliers (see tesco)
[QUOTE=Jabberwocky;32634761]It's a bit harder than that. Monopolies will often be powerful enough to simply buy out companies that might be a future competitor.[/QUOTE]
Not all businessmen want to sell their companies, and depending on the dollar amount offered it might not be enough as they expect to make through competition. If good companies know they're better than their competitors, definitely, they'll definitely compete. They stand to become as rich if not more rich than the company that wants to buy them.
Time Preference is something you should look up.
[QUOTE=Sandy;32627453]A Monopoly can be good or bad, in the case of steam, its good. I can get any game I want without having to go anywhere. But there is always that fear of the one company slowly but surly taking over their industry, then the market, and finally the Government. Its a fear that wont happen any time soon but still has people buying from different places[/QUOTE]
How long is it gonna take you guys to realize that Steam is NOT a monopoly?
[QUOTE=s0beit;32634738]It is absolutely unavoidable. In the real world sense, as in, can they actually get things done, it's arguable. In the economic sense, input and output, waste and inefficiency define government monopolies.
Government [i]granted[/i] monopolies are often not good for consumers either (that is, "privatization" as people on the left call it, where they pick and choose companies to build prisons or make solar panels or whatever)[/QUOTE]
I'm genuinely confused to as whether we have been arguing (You, Pepin and I) about government monopolies or whether monopolies are ever beneficial. I think we have lost the point a bit, but, I digress.
I'd like an explanation as to why in the economic sense government monopolies would be, by definition, inefficient. Personally I can't see how a government monopoly would be any less efficient than a private one, even when profit isn't the motive
[QUOTE=Lonestriper;32634921]I'm genuinely confused to as whether we have been arguing (You, Pepin and I) about government monopolies or whether monopolies are ever beneficial. I think we have lost the point a bit, but, I digress.
I'd like an explanation as to why in the economic sense government monopolies would be, by definition, inefficient. Personally I can't see how a government monopoly would be any less efficient than a private one, even when profit isn't the motive[/QUOTE]Good question, I'd like to know the answer to this as well. Statements like "It is absolutely unavoidable. In the real world sense, as in, can they actually get things done, it's arguable. In the economic sense, input and output, waste and inefficiency define government monopolies." are a statement of belief, not fact. This needs to be proven.
Valve currently doesn't have a monopoly of digital distribution, but it should it's the only competent company to know what consumers need and want without jeopardizing profit.
[QUOTE=Lonestriper;32633137]Well for one, the lack of regulation opens the workers to abuse and the market to price-fixing. Furthermore, the enforcers of law in the anarchy state are essentially a quasi-government so...[/quote]
If anyone wants to try to fix prices, they can do it, they are free to. It's like if anyone wants to start up a socialist government, they are free. Can't stop them, I can tell them it won't work, but who listens.
To the second statement, imagine you're at Disney Land which has a private policy force (they really do). You are on Disney Land's property and they have certain rules, and if you break those rules, the police can throw you out, detain you, fine you, and so on. Is Disney Land a quasi-government? Now, you live in your house, you invite a guest over and you make it clear that smoking isn't allowed, but they do it anyway. Are you acting as a quasi-government? The answer could be yes.
In a libertarian state, there would only be two rules. The non aggression axiom and property rights. You wouldn't have the right to shoot anyone who just entered on your property, you'd first have to evict them.
[QUOTE=Lonestriper;32633137]The USSR was a communist state in a mostly capitalist world, it was bound to fail when it took capitalist methodology and applied it to its industry. Further, saying government monopolies are inefficient is a sweeping generalisation that may hold some truth but is still sweeping.[/quote]
I think you're missing the point of comparison, which is that central planning is bound to so many issues. Anything government is involved in gets worst. I can't think of them doing anything right. Of course you have to use private business as a point of comparison.
[QUOTE=Lonestriper;32633137]I don't see how a reduction in profits equals a huge loss, they're still making money, just at a competitive level to stamp out competition (coupled with being dicks)[/QUOTE]
Do you want a mathematical case? Go to page 399 of this book. It is free. Should be titled "The Predatory Price Doctrine". I recommend reading it all, but specifically there is a part where it goes into discussing numbers. I was going to copy and paste the text, but it would make for a very long post, plus I'm having issues even trying to do that with my Ebook reader.
[url]http://mises.org/resources/1006[/url]
[QUOTE=Last or First;32633972] Basically, businesses in [B]perfect competition [/B]usually produce where the marginal cost of producing more of a product meets up with the price consumers are willing to pay for a product at that quantity. (As something gets rarer, people value it more, as it gets more common, they value it less, etc.) In [B]perfect competition[/B], the marginal costs rise as you produce more; however, in natural monopolies, as I've said, they go downwards. If a firm is a monopoly, then, since they have tons of market power, instead of setting their prices and quantities at the socially optimal level (i.e. MC = P) they set it at MC = marginal revenue from producing more of a good, or MR. This level is, of course, at a lower quantity and higher price than the socially optimal level. If a monopoly is in place, then, whenever a new firm tries to take hold, the monopolist firm can temporarily produce a lot more of the product, reducing the price, and making it even...[/QUOTE]
Did your teacher make the going over the assumptions used in the perfect competition model? The model has been widely criticized and I suggest you look into a deeper critique of it, but the main issue is that the assumptions make the model inherently non-applicable to anything other than describing the model. In the 30's, this was used to argue against mergers and to incite breakups, but at least since the 60's the model has been known as more as thought experiment that cannot be used to argue anything about the real world.
[QUOTE=Jabberwocky;32634761]It's a bit harder than that. Monopolies will often be powerful enough to simply buy out companies that might be a future competitor.
[editline]5th October 2011[/editline]
Also, there's no guarantee that they want to switch due to loyalty or the uncertainty with new things. They might not even realise that the company is abusing their monopoly.
Look at Apple which has a near monopoly on tablets and the like, charges exorbitant amounts for their products yet still has many, MANY loyal customers.[/QUOTE]
People wont always sell their companies.
People must like their iPads or they wouldn't buy them. I'm sure if it got [b]that bad[/b] then they would either not buy another tablet or buy from a different company.
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