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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Mon Nov 01, 2010 10:18 pm Post subject: |
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| Markets can and do create monopolies. The argument is that monopolies are difficult to sustain in a market economy. VQ, you should be sensitive to concentrations of wealth. Having a super-wealthy class of people who are able to buy government will not create or sustain a libertarian society. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Tue Nov 02, 2010 10:24 pm Post subject: |
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| TheUrbanMyth wrote: |
| visitorq wrote: |
| [q. There is absolutely no way that free market capitalism results in any kind of monopoly. There is no such thing as a natural monopoly, only the government has the power to create monopolies through regulation... |
| visitorq wrote: |
In a free market, a successful company can take take a very large segment of the market, but this never lasts.
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Well most sources refer to Standard Oil as a monopoly. True it wasn't an absolute monopoly but with a near 90% share of the market at one point it might as well have been.
I agree that a successful company can take a very large share of the market but this never lasts. Well nothing lasts forever. |
Standard Oil and Microsoft pioneered new products, which allowed them to have a giant market share simply because they were there first. This is fair play. There is absolutely no way to sustain this lead without either 1) continuing to make better, cheaper products (in which case there's no problem as the consumer benefits immensely) or 2) getting the government to pass regulation giving you an unfair advantage or straight-up gov't sanctioned monopoly.
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| But that is different from saying the free market does not create monopolies. Whether they last or not is beside the point. At one point Microsoft was deemed a monopoly with a 90% share of the market (similar to Standard Oil). |
Whether they last or not is not beside the point. The point is that they never last (at least there is no example in history of them ever lasting without government regulation propping them up).
That's fine - doesn't mean it's correct.
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| And who's to say that if Microsoft and Standard Oil hadn't been broken up (as they would NOT have been in a totally free market) that they wouldn't have (respectively) kept/regained their dominance? |
Standard Oil's market share had declined a great deal by the time it was broken up, as already mentioned.
Moreover, the so-called "monopoly" wasn't even really broken, it was just reformed into the same big oil companies we have today, who, with all the government regulation have a real, collective monopoly. |
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visitorq
Joined: 11 Jan 2008
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| Posted: Tue Nov 02, 2010 10:32 pm Post subject: |
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| mises wrote: |
| Markets can and do create monopolies. |
If that's the case, could you name one?
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| The argument is that monopolies are difficult to sustain in a market economy. VQ, you should be sensitive to concentrations of wealth. Having a super-wealthy class of people who are able to buy government will not create or sustain a libertarian society. |
It may just be a matter of defining a "monopoly". For me having a majority market share at a given point in time (even 100%) is not a monopoly. A monopoly is the ability to charge monopoly prices for an indefinite period of time, and the consumer has no choice but to pay. The government has many monopolies of its own. Standard Oil and Microsoft both had/have competitors; the consumer could freely buy other products. Therefore they are not monopolies.
As for concentrations of wealth, I have no problem with that. Having a super-wealthy class is the result of government intervention, not the cause of it. I realize this could turn into a chicken/egg debate (pointless), but ultimately it makes no difference if the government just stops interfering. |
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