J.S. Mill vs reality (round one: Post Office monopoly)

[Borodog]

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Low levels of technology do not make monopoly superior to competition.

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I think it's quite obvious that it does.

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Funny you didn't explain how then, if it's so "obvious."

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It doesn't matter. Even if the government were to have perfect knowledge about the best production techniques, have access to the finest and most knowledgeable minds, all of whom acted in perfect and angelic selflessness, the result would still be inferior to the market, because there could be no prices, and with no prices there could be no economic calculation, and with no economic calculation there are no profits or losses, and with no profits and losses there is no way to determine if you are wasting resources.

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So your baseless assertions are superior to my baseless assertions?

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What baseless assertions? Prices are set by competitive bidding for scarce resources by consumers and producers (for consumer and producer goods, respectively). If there is no competitive bidding, there can be no meaningful prices, only arbitrary ones, which cannot reflect the continuously changing and distributed capital structure, scarcities, and wants and desires of consumers. Hence there will be massive waste of resources, at least according to the consumers. Not so much according to the central planning board, the commissars, and the head of state. I assure you, they will be quite happy with the distribution of resources (that they come up with).

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My imaginary government would be able to set prices so as to keep the economy running at 100% efficiency. I'm not sure exactly how, but I have absolute faith that my government will find a way.

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Exactly so. The Faith of the socialist:

1. Violently take over.
2. ???
3. Utopia.

[bobman0330]

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Why would you even post this, when it has already been pointed out in the thread that there were competitive private postal services in the US prior to 1850 that offered lower rates, and were only shutdown due to monopolistic interventions by the state?

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My understanding is that your vaunted American Letter Mail Co. only delivered between a few major cities on the East Coast. It was scarcely a private post office on the scale of the USPS.

[Borodog]

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Why would you even post this, when it has already been pointed out in the thread that there were competitive private postal services in the US prior to 1850 that offered lower rates, and were only shutdown due to monopolistic interventions by the state?

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My understanding is that your vaunted American Letter Mail Co. only delivered between a few major cities on the East Coast. It was scarcely a private post office on the scale of the USPS.

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So what? The point is that a private postal service extisted and profitted before being forceably shut down my a government monopoly. Besides, how does this save your defense of Mill? His example was the London mails, certainly an even smaller market than that of the ALMC!

[Riddick]

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I think you're severely underestimating the difference between mail service in 1850's London and mail service in the present-day United States.

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I too would like an explanation as to why a lack of technology makes monopoly superior to a competitive market.

[Riddick]

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My imaginary government would be able to set prices so as to keep the economy running at 100% efficiency. I'm not sure exactly how, but I have absolute faith that my government will find a way.


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POTY

[BCPVP]

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UPS, Fedex, DHL, and other players emerged and grew because the information technologies and transportation technologies, and management technologies allowed them to do so. Where would they be without computers and internet. In fact, there were they before the internet and globalization and cheap air travel?


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UPS was founded in 1907. And as is pointed out in the original post, private competitors to the U.S. mail existed even during Mill's time, albeit briefly.

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Bear in mind that Girchuck thinks people can't possibly know where in the ocean they are without GPS.

*edited for clarity

[Riddick]

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My understanding is that your vaunted American Letter Mail Co. only delivered between a few major cities on the East Coast. It was scarcely a private post office on the scale of the USPS.


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The few major cities on the East Coast (Boston, NY, Philadelphia, and Baltimore) is much more impressive than the London Post Office, especially in 1844!

It is also very impressive for a startup mail company (some of todays major delivery services started with single routes between just two destinations.) Any lack of size can certainly be attributed to the stunt in growth and subsequent shutdown brought on by the wrath of the government.

[Girchuck]

What is the reason that two computer processor manufacturers control over 99% of the market share when it took many more only fifteen years ago? Why are giant oil companies keep merging together?
In some industries, bigger players have an edge. When the players become very big, they have ways to influence government to help them against competition.
By the way, there aren't five different American car companies, there are only 2 or 3.

[TomCollins]

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What is the reason that two computer processor manufacturers control over 99% of the market share when it took many more only fifteen years ago? Why are giant oil companies keep merging together?
In some industries, bigger players have an edge. When the players become very big, they have ways to influence government to help them against competition.
By the way, there aren't five different American car companies, there are only 2 or 3.

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Why do you think other companies have failed? Could it be that the production was not so obvious? That those who had poor choices failed? The most efficient means of production have won. Although some cases, government intervention has kept this from happening as much as it should (Airline bailouts, Auto Company bailouts, etc...)

[Girchuck]

The car companies all simply merged together to become more efficient, reduce overhead, until only big three were standing.
The microprocessor production became very expensive, and the lesser players could not keep up with the capital requirements needed to sustain or increase the rate of innovation and thus, were left behind.
Any business, where larger capital gives disproportionate advantage will lead to consolidation of the competitors into a giant corporation. And as long as government is in charge of national security, giant corporations that can convince government that they are essential for national security will be bailed out if needed.