A few questions for AC's

[jogger08152]

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[img]/images/graemlins/club.gif[/img]How would international dumping of manufactured goods (and foreign government subsidizing foreign domestic producers) by non-AC nations be prevented, protected against, or counteracted?

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What's the problem here? Cheap stuff? OH NOES!

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That one is one of the funniest problems that people come up with and that we get to answer. I really love giving the answer to it. The last time someone raised this question to me was that China was exporting cheap goods to Iraq and that this was somehow a problem.

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The big problem with dumping, especially foreign-government-subsidized-dumping, is that with essentially unlimited time and funding, it can drive domestic producers out of business. If the industry is capital-intensive, once the domestic producer dies, the predatory competitor can raise prices without fear of external competition for an unusually long time (because of the difficulties raising start-up capital and/or construction lead times).

A good example of this is airplane producers - if Airbus puts Boeing out of business b/c of French gvt subsidies, it will take quite a while for a new competitor to rebuild Boeing's production and engineering capacity, thus giving Airbus a good long time to enjoy unfettered monopoly pricing as a result of its predation.

[Nielsio]

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AC is simply individuals voluntarily solving problems without the use of a coercize territorial monoplist.

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The US govt isn't a territorial monopolist.

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That's quite an intellectual accomplishment right there.

[Nielsio]

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[img]/images/graemlins/club.gif[/img]How would international dumping of manufactured goods (and foreign government subsidizing foreign domestic producers) by non-AC nations be prevented, protected against, or counteracted?

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What's the problem here? Cheap stuff? OH NOES!

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That one is one of the funniest problems that people come up with and that we get to answer. I really love giving the answer to it. The last time someone raised this question to me was that China was exporting cheap goods to Iraq and that this was somehow a problem.

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The big problem with dumping, especially foreign-government-subsidized-dumping, is that with essentially unlimited time and funding, it can drive domestic producers out of business. If the industry is capital-intensive, once the domestic producer dies, the predatory competitor can raise prices without fear of external competition for an unusually long time (because of the difficulties raising start-up capital and/or construction lead times).

A good example of this is airplane producers - if Airbus puts Boeing out of business b/c of French gvt subsidies, it will take quite a while for a new competitor to rebuild Boeing's production and engineering capacity, thus giving Airbus a good long time to enjoy unfettered monopoly pricing as a result of its predation.

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Dilorenzo addresses this.

[jogger08152]

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http://www.freedomainradio.com/freed...isten-In-1.htm
Show numbers 1, 2 & 3

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Just finished listening to #2. The talk on DRO's is simultaneously incorrect (the "all people will belong to a DRO" / "criminals will leave their DRO prior to engaging in criminality" false dichotomy) and brave-new-worldishly horrifying. You honestly see this as superior to a state?

Edit: am currently listening to #3, wherein he retracts/clarifies some of his ideas in #2. (Interestingly, he used almost the exact phrase I did, "Some of my listeners found the DRO system even more horrifying and soul-crushing than the current State system.") More to follow.

Edit #2: I think his vision of "hundreds of DRO's clamoring for our business" is enormously optimistic. Buyouts and especially economics of scale with respect to tracking rogues, would quickly compress the number of DRO's to the point that they would begin to act heavy-handedly (or as he puts it, "arbitrarily").

[ojc02]

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[img]/images/graemlins/club.gif[/img]AC proponents tend to claim that monopolies cannot exist without government. In some cases this is true obviously true, EG national defense in its current form.

...however, what mechanism of AC would prevent "natural" monopolies from forming in highly capital-intensive industries (EG waste-water disposal or newspaper publishing)?

...how about in industries with non-capital related, but still very large barriers to entry, such as computer-OS software-mfr's?

...If no mechanism in AC exists to prevent such organic monopolies, who will handle anti-monopoly enforcement when they do form?

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On the monopoly question - Let's look at poker books. One could argue that David Sklansky has a monopoly in the "No limit hold em, theory and practice" market. However there are many other close substitutes for this product. It is very important to look at the issue of differentiation. The *only* markets that can really become monopolized are in undifferentiated commodity markets, eg the market for rayon fibers or something like that. Also a requirement for true natural monopoly is that there be very high initial sunk costs and then a low marginal cost afterwards. Even then, the continuous advancement of technology is going to unseat those dominant competitors when someone comes up with a cheaper method of production or a good substitute for the product in question.

The only argument that economists make against monopolies is the Dead Weight Loss that they cause. There would be more producer surplus and consumer surplus in total if the market were in "perfect competition" - a situation that is obviously impossible. Still, it is true that with more competitors, there would be more total surplus, even if you never actually reach perfect competition.

The *big* issue that economists who support anti-trust ignore is the tremendous amount of rent seeking behavior that anti-trust legislation encourages.

When competitors engage in rent seeking behavior (eg lobbying politicians to go after their competitors with anti-trust legislation) they are, by definition, not using that time and money to improve their product which would be to everyone's benefit.

Anti-trust also creates perverse incentives. It was GM's policy for many years that they should try not to get above 40% market share in the US automobile market. How did they go about this? They kept prices higher than they otherwise would have, and didn't endeavor to make their cars too much better than their competitors. Is it any surprise that the Japanese car companies are now obliterating them?

When you consider a cost benefit style analysis of anti-trust legislation, it would look something like this:

Benefit:
Highly undifferentiated commodity markets will produce slightly more total consumer and producer surplus than before.

Cost:
Losses due to rent seeking behavior.
Perverse incentives causing companies to deliberately not compete as hard.
Massive costs to the taxpayer to prosecute anti-trust cases.

I believe that when you sum the benfits and costs, anti-trust legislation is seriously negative. I have no actual numbers to back that up, just an opinion. It would be an interesting phd thesis.

All this writing and I haven't even mentioned that anti-trust is a hideous attack on the liberties of the owners of the companies involved. They should be allowed to sell whatever they want to whoever they want at whatever goddamn price they want to charge period.

So there would be no "AC mechanism" (whatever that means) to deal with anti-trust, and that is a truly wonderful thing.

[Kaj]

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AC is simply individuals voluntarily solving problems without the use of a coercize territorial monoplist.

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The US govt isn't a territorial monopolist.

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That's quite an intellectual accomplishment right there.

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I know it happens to be beyond most people's first-level thinking.

[ShakeZula06]

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The US govt isn't a territorial monopolist.


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lol. it's the defintion of a territorial monopolist.

[Copernicus]

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The problem with dumping of course is that it results in more exploited labor overseas. People that really have no legal or union protection from their employers, and are systematically abused by them (which is well documented).

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That isnt the major problem with dumping. The big one is that the dumping forces companies without sufficient capital to withstand a temporary loss of profits to fold and sell off whatever value is left in their assets. With reduced competition the dumpers can now raise prices more than enough to recapture the losses from dumping before the market can react, and if its a capital intensive industry that can be a very long time.

Witness French and then EU subsidies for Aerospatiale/Airbus, which allowed them to penetrate the US airlines with below cost products (exacerbated by a misguided cut in spending due to the "peace dividend"). The impact was a tremendous concentration of building capacity in very few companies, with huge penetration by Airbus.

[Kaj]

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The US govt isn't a territorial monopolist.


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lol. it's the defintion of a territorial monopolist.

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Read again:

"There are over 200 countries around the world owned by different groups of people, and countless smaller territories owned by individuals or non-govt entities. And many territories still not owned at all (albeit, you'll need to dress very warm.)

Just because you want to live on a territory already owned by one group of peopple does not mean there are no competitors or that you couldn't buy your own territory if you could meet the price."


So there are hundreds and hundreds of owners in the territory business. Just because you deny this doesn't mean it isn't true. It would be impossible for anybody else to own territory if US govt was a monopolist. I'll bet if you offer the govt $100B for Guantanamo Bay, they would cede you the territory so fast your head would spin and then you can do whatever the hell you want with it. Just because you can't afford the price doesn't mean you're entitled to the territory.

And if global warming occurs, you might be able to discover and claim a new island in the arctic... "Discovery is still the law in the United States today and in the international arena as is well demonstrated by the actions of modern day countries attempting to claim new lands and assets in the Arctic. We appear to be at the start of a new race to establish claims to this “New World” of the Arctic as the icecaps retreat, and it is evident that the rituals and principles of the Doctrine of Discovery provide the legal framework for claims to newly discovered lands and assets."

And a little more for you... "A private island is a privately owned island. Privately owned islands exist all over the world, and many can be bought. There are many thousands of uninhabited islands in the world with potential for commercial development of tourist resorts or private recreational use. Commercial development of uninhabited islands can bring up ecological concerns, as many have a fragile environment. Some islands can be bought undeveloped, while other include roads and/or houses. Some celebrities like Diana Ross, Tony Curtis and Claudia Schiffer own their own private islands. Many cruise lines own private islands, such as Castaway Cay, which serve as exclusive ports of call for their ships. Others, like Mustique are owned by resort companies which fill them with hotels and leased villas." [wiki]

[Copernicus]

Even if one agrees with the premise that anti-trust legislation is counter-productive (which I agree with in most cases), that doesnt result in any extra benefits under AC. Anti-trust legislation can be abandoned in other economic structures as well.