Are monopolies actually a good thing?

[Borodog]

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Lol. You have it exactly backwards. Under capitalism, the large majority tell the minority who own the means of production what to do.

Do you see why?

[/ QUOTE ] LOL. You live in a dream world.

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No, I understand economics.

[ianlippert]

wow, this thread just got really good!

I will post more, when I am sober [img]/images/graemlins/laugh.gif[/img]

[moorobot]

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No, I understand economics as they would work in a wished for and imagined future, based on many vastly implausible assumptions about human beings and markets. I do not understand how actual economies function and will function.

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FYP.

[Borodog]

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No, I understand economics as they would work in a wished for and imagined future, based on many vastly implausible assumptions about human beings and markets. I do not understand how actual economies function and will function.

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FYP.

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I love erroneou FYPs.

So which of my "assumptions" about human beings are "implausible"? That they act? That in acting they demonstrate preference? That by action human beings attempt to exchange a less satisfactory state of affairs for a more satisfactory state of affairs? That they prefer more goods to fewer goods? That they prefer present goods to future goods? That they prefer more durable goods to less durable goods? That value and utility are subjective, and cannot be measured, nor added, subtracted, multiplied, divided, nor regressed, but can only be ranked by individuals? That there are only two kinds of human action, voluntary and coerced? That every voluntary action benefits the actor ex ante, and every voluntary exchange benefits both parties ex ante? That in the absence of coercion, production must precede consumption? That productivity can only be increased by the application of reason and the production of capital goods? That capital goods can only be produced after savings have been made? That incentives matter? That accumulated capital creates the demand for labor? That first occupation and voluntary exchange form the only objective basis for the resolution of conflicts over scarce resources and goods? That conflict is in fact not even possible in the absence of scarcity? That social order, money, and law are all market phenomena that predate the state and its interventions in each? That taxing producers and savers and transfering to non-producers and non-savers reduces productivity and savings? That printing more paper money does not make a society wealthier? That rational allocation of resources can only be accomplished through the price system? That the price system can only stably exist in an environment of the private ownership of the means of production, freedom of exchange, and a sound (i.e. market or commodity) money? That in the absence of coercion, there are no barriers to entry of any market beyond the savings (i.e. capital) required to achieve high enough productivity, and hence low enough unit cost, to compete? That the levels of profits tend to equalize, regardless of industry, thus acting to keep all sectors of the eonomy in balance? That the competition amongst capitalists is not the Darwinian competition of who can scramble to consume the most, but rather the anti-Darwinian struggle to produce the most? That it is not out of the goodness of their hearts that the butcher, the baker, and the candlestick maker provide their wares to me, but because of self-interest? That if human beings are given a monopoly on the use of coercion they will exercise it? That if human beings are allowed to tax their fellow men they will tax them, and at ever increasing levels? That if human beings are allowed to print and spend money, they will do so? That if humn beings are allowed to unilaterally define justice, they will always define it in their favor? That if human beings are given ultimate jurisdiction of all conflicts, even those conflicts involving themselves, bad things will happen? That monopoly in all cases is bad for consumers, and that the cure for monopoly can not be a monopoly? Especially not a monopoly of coercion? That central planning must fail because economic information is dispersed throughout the economy, with only an infinitesimal fraction known by any one actor? That there is no objective way to identify a "market failure" that is external to the market itself? That government can never do "good" because to do any goods it must first do bads, and there is no way to intersubjectively ascertain whether the good outweighs the bad?

You are the one who has no concept whatsoever about human nature or how markets work. Read Man, Economy, and State, and then get back to me.

[hmkpoker]

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Lol. You have it exactly backwards. Under capitalism, the large majority tell the minority who own the means of production what to do.

Do you see why?

[/ QUOTE ] LOL. You live in a dream world.

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You're thinking about it backwards.

Take, for example, Nike. Nike is a big evil corporation with outsourced sweatshop labor in Indonesia and a huge consumer base all over the world.

The obvious majority in this economic system is the consumer. They are the ones with demands. They are the ones who demand the shoes. The fatcats at the top are then forced to comply with said demands (if they want money), and must pay the labor a sufficient amount to keep them voluntarily employed. While you may think the people at the top call all the shots, remember that there is a reciprocal power on behalf of the demand (they demand the product) and the labor (who demand adequate compensation for their work, and who further have the ability to unionize against wages lower than market value)

[cambraceres]

What HmkPoker said is correct, except for the portion about the workers being able to affect any change in their environment. A journalist touring in indonesia dug up some documents in a trash heap that showed Nike pays their workers there .03% of retail price. Not only that, their production criterion are so well honed they calculate time needed to complete work in thousandths of a second.

When any huge corporation or manufacturing entity has sufficiently fed a population, and that population gets less desperate, the corporation moves on to the next desperate lot, raise them up, then repeat. Of course when they leave conditions degenerate to subhuman poverty levels again. If they unionize, Nike or whoever would be out the door and long gone.

Cambraceres

[pvn]

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When a large company moves out of a small town it harms everyone in that city. Pick up a basic sociology textbook or a history book about this, if somehow you can't see what everyone else in the world does.

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I see what you're saying, I just don't see anything objectionable.

If a guy need some work done, and he hires someone to do it, they both benefit. If, at some point in the future, circumstances change and the arrangement is no longer beneficial to both parties, why should the agreement be forced to continue? If a guy decides to quit his job, the employer is harmed, as he now has to expend energy to find a replacement and he suffers a loss of productivity until that happens.

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No, they won't get a job as an NBA center and that is why they won't try-do not have the skills to get higher.

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We're in agreement, then. To this point, at least.


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So what? The factory worker can save some and "keep it and make more money" too.


[/ QUOTE ] Someone who makes $10 hour can save a lot less in almost all cases than someone who makes $100.

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Again, so what?

I could see an objection to this arrangement if the person making $10/hour and the person making $100/hour were assigned those jobs by a coercive monopoly, and not through voluntary agreements.

I make choices. I could have easily chosen a career that would generate twice as much value (and hence, twice as much income) for myself, but I instead chose a career that leaves more leisure time for myself.

Your argument seems to assume that a $10/hour person is *inhernetly* only worth $10/hour, no matter what he does. It's a defeatist, pessimistic, patronizing, and, frankly, insulting attitude.

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Natural monopolies are myths. There was robust competition in utilities before mercantilists figured out how to rig the system and get local governments to grant them monopoly protection.

[/ QUOTE ] No, No no no. Every textbook in economics proves this is otherwise, and I even gave an example of one that is not a myth and demonstrating why it is a natural monopoly, and you ignored my example because it calls into question your absolute faith in the market:

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No, I ignored it because it's wrong. Saying that "34 roads" between two points is wasteful doesn't "prove" anything.

Regardless of what your books prove, the fact is that utilities have competed. Where this competition has been eliminated by govermnets, consumers have been harmed by monopoly prices. You claim to fear free market monopolies (which, if they were possible (which they are not), could only be created by outcompeting the other players) but you explicitly support monopolies created by the state, not on the basis of merit, but on the basis of politcal favor?

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In any case sometimes competition can be harmful or just counter productive, as in the case of many natural monopolies.

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Please provide one example where consumers were harmed by competiton, and helped by government stepping in and eliminating the competition. One will be sufficient.

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Ah, with their bottomless pit of money, right? This has been debunked hundreds of times.

[/ QUOTE ] What do you mean? If it is so debunked why is it in every economic text?

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Good question.

Rockefeller tried exactly what you're proposing. He started buying up every refinery he could get his hands on.

Guess what happened - people started building refineries expressly for the purpose of getting bought out by Rockefeller. They were being built faster than he could buy them, and of course, he didn't have a bottomless pit of money.

Enter government regulation - Rockefeller gets some legislators to pass "safety standards" for refineries. The bar is set arbitrarily high, to prevent people from entering the refinery market. Voila.

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If they simply doubled the ammount of stores and doubled the prices they would magnify there profits by ten to thirty times and be worth a trillion bucks!!!

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So they should just build a new wal-mart right next to every existing walmart?

I think you should email the Walmart chief operating officer with your "double prices, increase profits 10-30x" idea. They're obviously paying him too much, and should hire you. It's a surefire winner.

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More than enough to buy off people(the reason this is not 100 x2 x2 is that if you double your prices you far more than double the ammount of profit you gain from a sale-e.g. the store gets about 5 cents profit on a 50 cent candy bar, if they doubled the price they would get 60 cents, twelve times the profit)

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Absolutely brilliant. I really should just stop right here.

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Wal-mart (in this situation but possibly in the real world as well) is also so big that it could announce that it is going to stop buying from a distributor of goods that is selling to the competition, and producers will simply refuse to sell to other retailers because Wal-mart's business is so much more important because of the high volume of sales. So wal-mart has two ways at least to ensure that they are the only retailer around and hence can set prices. We need the government to prevent these kinds of scenarios from happening.

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Also debunked, in this forum, time and again.

[/ QUOTE ]Wal-mart right now actually pays less for just about everything than the other retailers because they tell them they will not buy from them unless wal-mart gets a special discount, and the companies listen because they are high volume. Imagine what they could do if they could tell the distributors to not sell to others as well.

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Let them do it. I get lower prices, how am I harmed? The supplier agrees to it, they must find it beneficial, too.

The part that has been debunked is not that walmart can do this, but that we need government to prevent it from happening.

When walmart "sets prices", who are they harming? Not me, the consumer. They're harming poor competitors. They're doing us a service.

[moorobot]

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When walmart "sets prices", who are they harming? Not me, the consumer. They're harming poor competitors. They're doing us a service.

[/ QUOTE ] I'll let you have the last word for now on most of the issues and let those reading the posts decide who is corect.

Here, I'll just say this: Wal-mart, following the social script provided by capitalism to capitalists, try to get as much as they can for themselves regardless of the consequences for others. In some situation, that greed is our gain. In others, the greed will not lead to the gain of other human beings. I think I have showed in some cases that the greed of the 'butcher and the baker' (outdated, just like all beliefs in unrestricted capitalism) would not lead to benefits for everyone else. Without government, we would be in the 'some cases' area far more often.

[hmkpoker]

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What HmkPoker said is correct, except for the portion about the workers being able to affect any change in their environment. A journalist touring in indonesia dug up some documents in a trash heap that showed Nike pays their workers there .03% of retail price. Not only that, their production criterion are so well honed they calculate time needed to complete work in thousandths of a second.

When any huge corporation or manufacturing entity has sufficiently fed a population, and that population gets less desperate, the corporation moves on to the next desperate lot, raise them up, then repeat. Of course when they leave conditions degenerate to subhuman poverty levels again. If they unionize, Nike or whoever would be out the door and long gone.

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Outsourcing labor is a somewhat recent phenomenon; America now has so many resources that even if minimum wage laws were not in effect, no one would work in a sweatshop paying Indonesian rates because another factory could put them out by paying just a wee bit more. Those sweatshop days are long gone for us Americans, but in less developed parts of the world they still thrive and now that's where the big corporations are going to go.

And if you look at the short term, it seems awful. Outsource to Mexico and pay them bupkis. When they increase the standard of living to the point where market rates must increase or the newly formed labor unions will quit, it is most effective for the corporation to outsource to India. When the same thing happens, they'll outsource to Indonesia. Then Africa. Each time, they are maximizing their profit.

The problem is that they cannot do this forever without eventually having to up the pay. It is economically impossible. As more and more corporations look to outsource to the cheapest location, they continue to employ the cheapest labor possible. But as the history of unionizing and raised standards of living increases everywhere around the globe, eventually they will have to give in to their demands. The more corporations outsource, the more they encroach on each other's turf, which is gradually increasing their demands. There becomes a battle for more and better labor.

Guess what they have to do to win [img]/images/graemlins/grin.gif[/img]

[theweatherman]

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The problem is that they cannot do this forever without eventually having to up the pay. It is economically impossible.

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Unless you used an outside force to destroy the capital of an area. Plunging it back into the third world. It'd have to be big, say a governmental war machine!

Who says war cant help business?