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Pluto
Joined: 19 Dec 2006
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 Posted: Thu Jun 25, 2009 8:10 am Post subject: |
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| RufusW wrote: |
| mises wrote: |
| What we do know, from economic history, is that monopolies are not naturally occurring. |
I'm pretty speechless a trained economist would ever say this. I mean, it's incredible.
So do monopolies never exist, or are they only created by government intervention? |
Monopolies do exist and they are created by government. The most glaring example should be money. Why do you think the World's cartel of central bankers have so much control over each countries money supply? Were central banks created by free markets? RufasW, do you honestly believe that if the Federal Reserve Act of 1913 were repealed tomorrow, that the Fed would go on and continue as it is? Would it continue to have monopoly power over US currency?
The closest thing to a free market in history would be the United States from 1869, with the end of the Greenback, until 1913, with the creation of the Federal Reserve. Also, most of the west enjoyed relative peace and growing prosperity as well. There were no wars on the European continent from 1815, Waterloo, untill 1914, WWI. 99 years remains the longest stretch of time that European powers have been at peace with one another.
But back to the years of 1869 -1913. Think of all the innovation during that time period, particularly the 1890s. Electricity, the light bulb, the telephone, the car and airplane all come to mind. |
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Sergio Stefanuto
Joined: 14 May 2009
Location: UK
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| Posted: Thu Jun 25, 2009 2:58 pm Post subject: |
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From 1947 to 1957, labor productivity growth averaged 3.5% per year, whereas from 1976 to 1986 it averaged only 1%. This decline was linked greatly to government economic activity.
This analysis validates the classical supply-side paradigm and shows that maximum productivity growth occurs when government expenditures represent about 20% of GNP |
http://www.springerlink.com/content/wl5407g8xr6p601h/ |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Jun 25, 2009 3:36 pm Post subject: |
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| Pluto wrote: |
| RufusW, do you honestly believe that if the Federal Reserve Act of 1913 were repealed tomorrow, that the Fed would go on and continue as it is? |
Well I don't know much about that so I'll leave it to you.
We were discussing monopolies. I was stunned mises said they don't naturally occur and I think they certainly do, in many areas. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Jun 25, 2009 3:47 pm Post subject: |
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| Just provide examples. I've asked 3 times now. |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu Jun 25, 2009 6:08 pm Post subject: |
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| Pluto wrote: |
| But back to the years of 1869 -1913. Think of all the innovation during that time period, particularly the 1890s. Electricity, the light bulb, the telephone, the car and airplane all come to mind. |
Are you trying to link these specific innovations to the market conditions of the era, or are you just commenting that some interesting and useful devices happened to be invented in that time period? |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu Jun 25, 2009 6:44 pm Post subject: |
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| Fox wrote: |
| Pluto wrote: |
| But back to the years of 1869 -1913. Think of all the innovation during that time period, particularly the 1890s. Electricity, the light bulb, the telephone, the car and airplane all come to mind. |
Are you trying to link these specific innovations to the market conditions of the era, or are you just commenting that some interesting and useful devices happened to be invented in that time period? |
Many learned scholars have done so in the past. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Jun 25, 2009 7:53 pm Post subject: |
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Okay, well this should get interesting.
I agree that monopolies are tempered somewhat by possible entrants to the market, I also understand monopolies can be created by government intervention. It may also be that monopolies will always disintegrate over time. However, during the period that they are monopolies they hurt efficiency and consumers.
I would be good if you could expand your argument.
A historical example of a monopoly: Standard Oil.
http://en.wikipedia.org/wiki/Standard_Oil
And a current example of a monopsony : Walmart.
http://harpers.org/archive/2006/07/0081115
Returning to the point of contention. I maintain capitalism tends towards large companies, especially where economies of scale are involved. |
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Fox
Joined: 04 Mar 2009
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| Posted: Thu Jun 25, 2009 7:55 pm Post subject: |
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| Rusty Shackleford wrote: |
| Fox wrote: |
| Pluto wrote: |
| But back to the years of 1869 -1913. Think of all the innovation during that time period, particularly the 1890s. Electricity, the light bulb, the telephone, the car and airplane all come to mind. |
Are you trying to link these specific innovations to the market conditions of the era, or are you just commenting that some interesting and useful devices happened to be invented in that time period? |
Many learned scholars have done so in the past. |
I asked the man a question about what he, specifically, was doing. Thank you for your interjection about what an unspecified number of unspecified individuals may or may not have done in the past, though. I'll take it as noted. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu Jun 25, 2009 8:42 pm Post subject: |
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| RufusW wrote: |
Returning to the point of contention. I maintain capitalism tends towards large companies, especially where economies of scale are involved. |
Why is this inherently a bad thing?
Shouldn't the litmus test be which situation produces the most efficient outcome? That being goods produced with the least amount of capital and labor. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Jun 25, 2009 8:55 pm Post subject: |
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| If competition is reduced efficiency will be hurt. On an individual level this would create inequality. But I was originally arguing against Mises' statement that capitalism doesn't favour large companies. I'm merely trying to show it does. |
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Rusty Shackleford
Joined: 08 May 2008
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| Posted: Thu Jun 25, 2009 9:07 pm Post subject: |
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| RufusW wrote: |
| If competition is reduced efficiency will be hurt. On an individual level this would create inequality. But I was originally arguing against Mises' statement that capitalism doesn't favour large companies. I'm merely trying to show it does. |
Again, why is this a bad thing? Large companies are more likely to have economies of scale which is a good thing. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Thu Jun 25, 2009 11:34 pm Post subject: |
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| Yes, economies of scale are good at creating efficiency, but if it means concentrated control of the market then the consumer will suffer. As with monopolies or cartels, the deadweight loss burdens the consumer. Price-fixing also means less of the good is consumed than would be in a competitive market - for example, healthcare maybe. Furthermore, the quality of the good can also decline if there is too much power held by the producer - a monopoly water supplier is not pressued to ensure supplies are actually clean, unless forced to do so by competition or government regulation. |
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patongpanda
Joined: 06 Feb 2007
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| Posted: Fri Jun 26, 2009 12:03 am Post subject: |
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I'm not too interested in all this economic theorising.
Isn't the proof of the pudding in the eating? Thatcherite Britain tastes of poo.
Why is it that I have a much better quality of life in Korea?
They have thriving heavy industry, cars, ships, steel. No crime, excellent transport, no chavs, lots of public services, good education, less class division - everything I would expect in a decent 1st world country.
The answer I believe - economic nationalism. They don't blindly follow some simplistic free market theory, they pick and choose policies based on national interest. |
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Sergio Stefanuto
Joined: 14 May 2009
Location: UK
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| Posted: Fri Jun 26, 2009 4:38 pm Post subject: |
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Your argument fails miserably, Patongpanda.
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| Isn't the proof of the pudding in the eating? Thatcherite Britain tastes of poo. |
the average Briton's income rose 37% under Thatcher.
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| Why is it that I have a much better quality of life in Korea? |
because of market demand for English-teachers.
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| They have thriving heavy industry, cars, ships, steel. |
well, someone has to make them, but it's not necessarily the hallmark of a first-world nation. China makes them too
The average Korean family of three earns the same as the average Briton, also
agreed. Korea, unlike the UK, doesn't have a permanent underclass of professional knife-wielding couch potatoes
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| excellent transport |
agreed (but privitized)
okay, Korea doesn't have chavs, but neither does the UK have old women selling twigs at the side of the road, nor 70-year old homeless bums with no legs begging for change
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| lots of public services |
but no welfare state whatsoever, and the public services you mean all come from private industry
Please tell me you're joking
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| less class division |
that's because you're looking at Korea through the specs of British 'class'. Korea has its own 'Korean' class system, trust me - male over female, old over young, white over dark
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- everything I would expect in a decent 1st world country
The answer I believe - economic nationalism. They don't blindly follow some simplistic free market theory, they pick and choose policies based on national interest. |
Hasn't it occurred to you that Korea 2009 is an economically more rightwing (and more socially rightwing) society than 1980s Britain?
My mother was a mature student in the 80s when I was a child. In those days, not only was university education free, but we also had student grants - very generous student grants, too - as opposed to loans. In Thatcherite Britain, my mother went from secretary to Masters degree, all for free. Like I said, the average person's standard of living went up 37%. Largely, only those previously employed in state-owned, highly inefficient industries suffered. Sorry, but that's the nature of progress. The bicycle industry suffered when people started making cars. And, of course, you had a bunch of frothing-at-the-mouth lefties protesting on the bicycle manufacturers behalfs.
Korean "national interest policy": no welfare state whatsoever. Low salaries, high cost of living. 70-year old bums with no legs. Import tarrifs ($10 for cherries?). People are so desperate for employment that they will be a parking lot pointer-and-bower for $3 per hour. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Fri Jun 26, 2009 5:54 pm Post subject: |
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At the time SO had anti-trust moves against it her market share was 68% and declining. That isn't a monopoly, especially since her competition was quite diversified. At any rate, this is the one example of a monopoly we have that is at all useful. Long ago I read a history of the company and was struck at how deeply intertwined with the state it was. However, I'll just give it to you. I don't feel like re-reading the history. So you got 1.
http://www.google.com/search?q=wal+mart+%22corporate+welfare%22&sourceid=navclient-ff&ie=UTF-8&rlz=1B3GGGL_enUS271US271 |
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