People think business owners love capitalism, but actually capitalism benefits the consumer not the businesses in competition. People improperly blame the free market when they see something unfair in the market, when the true culprit is always government and laws designed to give a business a special advantage over it's competitors. Regulations are the result of industry organizations lobbying congress to their advantage.
I have a thousand channels from Directv and Cable TV and the internet, and I can't find an intelligent discussion such as this anywhere. Anyways, I love the consistency of Dr. Paul, and his ability to be articulate about his understandings. I don''t always agree, but I always respect him...and he is a politician.
13:36 - I love that smirk."Typical example of how one intervention leads to another one or two government interventions." Pretty sure I heard him say the exact same thing today. And yesterday... and for the last decade.
I agree with you on the third point, and the second. But as to the first point if the corporation is larger than the government and more powerful how can they prevent coercion and fraud? Corporations will simply create their own laws (similar to home owners groups' rules), get their own miltiias, police, fire, prisons, etc and become their own governments.
"even the telephone companies can experience competition" Boy were these guys wrong. LOL. What I don't understand is how people can watch these old videos of libertarians accurately making predictions and then write off libertarians as crazy.
There's a very interesting article called "the case for antitrust enforcement" by Jonathan B. Baker. It dealts if most of the criticism presented here and does a very good job debunking it.
Monopolies and large corporations only become truly powerful when they are protected by regulations. The big guys have plenty of lawyers to deal with them, and the little guy gets screwed. We need to make sure there is free entry, so there is at least the threat of competition at all times. Also, corporate persohood is a government invention in the first place.. I'd particularly like to see the coercive monopoly that government enjoys broken up. They're particularly abusive.
@eirefrance What are you asking? It is a trust I concede that, i'm making the point that Trusts don't need to be busted. Your comment was a challenge to the speaker's question and I answered that challenge
@@1974dormouse Wow, we've got a light there that understands everything about economics. Dude, if Microsoft cared about consummer choice, they wouldn't impose their shit standards. Same about Google or any company that owns a monopoly
A point that I would like to make is that corporate "profiteering" in an openly-competitive market must also incorporate consumer "profiteering". The difference is that the corporations make their profit in MONEY by raising revenues higher than costs. Similarly, consumers profit by receiving goods that are more valuable to them than their price. They profit in UTILITY. The labor costs they endure to afford the goods are less than their labor would be to create a similar or identical good.
I had to stop the video and look up what N-I Trust laws was... but google gave no results, so after thinking for 5 minutes I figured out they meant ANTI trust law, not n-i trust law. But the way they pronounce it is just so incredibly misleading.
Definition of 'Monopoly' Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. ... He enjoys the power of setting the price for his goods.
You're right. Willette will save money. The question is what do they do with that savings? 1) Keep the extra profit. This doesn't hurt consumers, but does benefit shareholders. 2) Lower prices to get more business. This benefits consumers & shareholders at the expense of competitors. 3) Try to increase prices. If they succeed in doing so, their competition will expand. Only #3 has the potential to be bad. But like ACDC7369 said, we don't have historical examples of this actually happening.
Boon1333 Antitrust laws prevent corporations from making decisions which intentionally disadvantage or prevent competition. Therefore, it is only companies at an advantage which can can employ antitrust policies against their current or potential competition. For the most part, lesser corporations could not even be in a position to disadvantage higher corporations in any meaningful way. I watched this because I am fascinated by how they can twist such an essential part of what makes capitalism sustainable into something which is bad. Remember, money talks, and antitrust laws are here to make sure money does not also enslave. If a company is allowed to kneecap competition, no one could EVER compete. Antitrust laws are directly and precisely a set of laws to prevent monopolies and protect the people from being extorted. Before them, companies would make decisions which may cause the deaths of individuals, in order to bankrupt companies. NO ONE wants us to go back to that.
Its the stunning irony of Libral "Progressive" type of ideas that actually kills progression! Look how he described bell telephones of how they had a government watched monopoly and franchise while the market was calling for more players! This is one of the thousands of things that happens when you have government regulation and intervenion.
Ok question: What's to keep a corporation once they have a monopoly from turning around and screwing consumers over after they establish their position and wipe out competition?
As a follow-up just because a company is run out of business doesn't mean their facilities disappear so as long as the capital structure exists price-cutting only leads to losses for the price-cutter, as someone will buy the production facility, because the owner who got ran out of business will have no further use for it as they cannot finance running it. So they sell cheap and the next guy comes into the picture in a better position than the last and price-cutting turns out to be impossible.
Cell phones provide a clear counterexample to your phone example, with many companies building their own infrastructure basically from zero. Even before that, MCI challenged AT&T's government-enforced monopoly by developing a new technological way of delivering phone service. Of course, AT&T tried to fight this initially... not through competition but through government. Eventually the government did a 180 and broke up AT&T, after protecting it for decades.
what about if a company gets so rich that they can buy out all of there competition? for example right now at&t is about to take over tmoblie. they can make the price whatever they want once they have eliminated the competition. can someone please explain to me how the free market will fix this problem? they talked about it briefly in this video but they really didnt answer my question, or atleast i dont feel like it was explained in detail.
@IcyScythe You can't kill competition without the government. THe bigger you get, the more you have to fuel (pensions, medical etc...) It's always easy to undercut the big guy
Your only power to change them is through the government which would be significantly smaller than the corporate power. So how would it have any power of enforcement?
I must say I’ve been hoodwinked in school. It’s not necessarily information that is inverted but the omission of it. Austrian Chicago School economics are definitely useful as opposed to Keynesian.
@eirefrance Standard Oil also delivered a 95% (i think that's about right) reduction in Kerosene prices and opened up a completely new market in energy. Even though he dominated the market with his company he still provided much cheaper prices than anyone could offer (and Rockefeller obviously still made a profit) so there was no need for competition since he still offered a superior product that the consumers willingly paid for without government intervention.
As meambobbo indicated, human lives are not sustained automatically by "resources". Such resources require that labor be applied to be discovered, acquired, processed, and distributed. So to claim a "right" to such resources is to claim a "right" to force others into the labor necessary to provide these. This is a type of slavery. Profit is the compensation for the investment of one's labor (or the fruits thereof).
In the free-market cartels are impossible to sustain because every individual member in the cartel would stand to benefit from breaking from the cartel. In a cartel the members restrict production to raise prices, however, at these raised prices each firm in the cartel will profit more from increasing production, tending to collapse the cartel. Furthermore at raised prices new firms enter the market which ruins the cartel. Only when firms are forced by law to collude can cartels function.
And important point here, however, is that healthcare is not a right, because it has to be provided through other people's labors. So rather it is a commodity which should be freely traded in a free market. If someone can't afford such a trade, they must do without it. The only way the term "over pay" has meaning is if the price isn't decided through a free market.
Yeah, definitely. In today's talk shows, people jump from one topic to another without exploring far enough into each topic at hand. The shows today are very superficial and unsubstantive, compared to this one. Even in the channels that specialize in reporting on the economy, economic theory is rarely, if ever discussed.
This is similar to the situation you find in so-called "universal healthcare". Since the government chooses not to conscript doctors into forced servitude, it has to force everyone else into servitude by seizing a portion of the fruits of their labors to pay the doctors. You may argue that nobody is forced to labor, but if they did not, who would pay the doctors? How could this healthcare be deemed a "right"? In the US, the average worker is forced to work for the government until April 30.
@eirefrance At the height of Standard Oil, it had something like 85% of the market share (of course it did create the kerosene market). By the time the antitrust case was brought against them, the share had already started falling to the 60% range.
The obvious counterargument would be "Well you can choose not to live there." But realistically once oligarchs started seeing this as profitable they would all start doing this. There would be no reason for them not to.
@hiyukenmusic In a free market system there is no corporate welfare or corrupt politicians giving one corporation advantage over another. Companies must truly compete for profits. Before the massive expansion of regulations, taxation and government there was a much more competitive free enterprise system. Monopoly, price fixing, customer gouging etc. were rarities. It was the corporations using the corrupt government that desired regulations in order to stifle their competition.
It would be less likely for competitors to enter the market, especially if the first company does a decent job. If the first phone company became abusive enough, however, competitors would put up the money.
@sedatedlife18 I was thinking the exact same thing as I was watching this. You'll never see an intelligent discussion like this in the mainstream media
Yes, like you said, a simple truth. Like the simple truth that someone who thinks there is a limited, controlled role the govt should be playing in the economy is a worshiper of the state, a statIST, if you would. Such a simple and easy truth.
Actually I think it's more accurate to say that it was the relaxed application of antitrust rules that allowed banks to merge and become bigger and bigger. Today's crisis is an example on why people should return to a stricter economic regulation. Not a reason to strip the regulation further as some in the libertarian movement argue.
The moralities of humanitarianism and ecology (altruism, responsibility, stewardship, etc.) have been disregarded in favor of short-term 'market efficiency', benefiting only those who will buy their product and be content with its quality and origins, be they ignorant, distracted, or numb. A company like this could use its influence to buy-out or silence most competition, so that most innovation is controlled. How would the market system intervene to address this destructive, excessive behavior?
There is no evidence that any monpolies or cartels have ever survived for a significant amount of time or dominance over the free market without govt assistance. This is because monopoly and lack of competition always create inefficiency, which in turn breeds competition. Not only does your position contradict basic logic, but there is no historical evidence backing any of it up.
Kinda disagree with that on two points. I wouldn't call the government backing of loans regulation. It was more a case of social engineering. I agree that regulation sometimes creates moral hazards. However the "free market crowd" always forget market imperfections like the agent problem, and assimetric information. The problem was not only the poorly made loans but also their repackaging and lack of oversight on the products being sold in the financial market.
There are a lot of interesting points being made here but what they fail to realize is that the general public is stupid. A monopoly CAN thrive on giving a disproportional market price. What we need is organized consumerism!
I support break ups, when consumers have NO OTHER CHOICE; for example, most of us cannot choose our utilities, and so we have few options if we are being unfairly treated (due to outrageous rates, or lousy service). It's already wrong that the consumer often can't choose their gas and power companies, but to have huge companies come in, and ignore/treat the customer unfairly, but to have these huge companies come in (and do that very thing, across an entire state or region) is completely unacceptable.
If you have a situation like the invention of a product or service, whereby the only choice for consumers is from the inventor, a breakup would be unjust (this does not refer to patents). The same goes for monopolies that arise from selection, where a single entity provides a good in such quality and at such price as to become the sole preferred distributor by consumers. A monopoly only deserves to be broken up when it is established through such a wrongful way as discussed in this interview - collusion with government via political means like patents and antitrust legislation. Even then however, a "breakup" is excessive; all that is needed for rectification is the elimination of the state's presence and influence in the arrangement so that the monopolistic firm will once again be liable to face competition from other firms.
Parke Pro Tennis I disagree. As is the case with many utilities, there is not necessary collusion between the gvmnt and said utility. The consumer, however, has no choice but to use that utility; they are not necessarily the sole preferred service, so their income could arise from unfair business practices and their lack of competition. In some (such as water utilities) having more than one servicer wouldn't be practical. Now in other instances (such as with both the Bell services and AT&T) that was wrong IMO; people had a choice NOT to use the Bell Services, and people didn't have to use computers using Microsoft services (be it Windows or Internet Explorer, because they could have picked computers running Linnux), and it's not vital to have a phone or computer. The city won't let you live in a building, however, that doesn't have power or water. If people voted with their dollars (in either of these choices), Bell and Microsoft would've been forced to back down/change their policies.
If the city you live in won't allow you to live in a structure without power or water, then that's a good example of anti-competitive, corporatist behavior on the part of the government in your neck of the woods. But even if this wasn't the case and it really was impractical as you say, to have multiple utility companies servicing your city, you could always choose to relocate to a locale served by better quality firms or provide your own utilities (ex: solar panels, wells, etc.). That is, unless the government does not allow you to, and so we return to the issue of statist intervention...
I understand that the profit margins are raised by forming a cartel but that still doesn't change the incentives of each firm in the cartel to break away. However, even if created successfully the cartel cannot stop outsiders from entering the market to get a share of their raised profits. The price/quality war still exists after a cartel is formed, which is why they are doomed to fail both by internal and external forces. Without coercion a cartel cannot force an industry to follow its rules
If you co-merge, you most certainly can afford to reduce value/increase price moreso than not co-merging. You're also ignoring the point that no natural monopoly has ever been created without the assistance of some form of government abuse of the free market, ever in recorded history.
@joshua1auhsoj I remember when AT&T was broken up in trhe 80's under anti-trust laws. And I also remember what happened to the prices for phone services IMMEDIATELY after. They went up sharply.
Government is definitely imperfect. But it is a product of imperfect people. The thing about government is at least we can change government. We cannot change corporations without first using government.
@smashing86 Asymmetric information in the market arises because of human imperfection. It is a leap to conclude that we need government intervention because of these alleged problems.
The rightful authority comes from political power which comes from the barrel of a gun ultimately. These corporations don't do the right thing because we ask them to. The reason we have building codes and all sorts of standards is because people, and corporations could not be trusted to do the right thing left alone. Government didn't just step in because they were bored and someone wanted to make money issuing permits.
@pankskink The state is good in managing epidemics and war? Have you looked into the performance of the UN in battling AIDS and malaria in Africa? Have you read about the war in the Middle East? With the sheer size of government spending they are bound to create some good effects, but the good that the state does is just that, accidental in nature.
Government as a legal monopoly over security and judicial services is entirely unnecessary and unjustified, without violently restricting competition it couldn't function Finally industries cannot determine prices alone, they must satisfy consumers. So if one firm lowers prices it gains the patronage of consumers and the cartel has no customers. Cartels can't force consumers to buy from them, so they have a huge incentive to offer lower prices to take away competitors customers.
Of course individuals would prefer a cartel to maximize profit, but that doesn't matter if cartelization is impossible. If a cartel exists each individual will still profit more by breaking from it even though as a whole the industry profits more in a cartel. Cartels can form but they can never last, or be successful, as new entrants and undercutting are incentivized. Forcing competition is also known as slavery, if a man doesn't want to work so be it.
if the loans werent required by the government, they never would have happened, at least to the degree in which they did, and we wouldnt be talking about this now. regulation caused this problem, not a free market. in fact, a truly free market would have prohibited this problem.
If the cartel undercuts a business not in the cartel the owner will go bankrupt and simply sells his facility at a low cost to cover his losses. So a new factory owner arrives who bought at a low price and can continue production at a lower cost than the previous owner and if the cartel undercuts the new arrival this process continues ad infinitum. Eventually the cartel goes broke. Finally, I'm a market anarchist, so, I think the market will better provide security services than gov't.
You are conflating the individual firm with the entire industry. Yes, profit for the industry as a whole is maximized through cartels but for each individual firm the incentive is against cartelization. For example suppose all oil firms decide to cartelize and raise prices of oil 10%. At this raised price the incentive for the individual firm is to operate at full capacity because the increased price offers much higher profits. The cartel cannot stop its members from breaking from the cartel
Ron Paul. Correct in 1983, correct today
People think business owners love capitalism, but actually capitalism benefits the consumer not the businesses in competition. People improperly blame the free market when they see something unfair in the market, when the true culprit is always government and laws designed to give a business a special advantage over it's competitors. Regulations are the result of industry organizations lobbying congress to their advantage.
I just enjoy listening to Dr. Paul over and over ... it's just always educating and enlightening every time.
That discussion was soo intellectual.
Kudos to the interviewer... what real journalism was like. Amazing, Amazing. Respect to all involved here.
I have a thousand channels from Directv and Cable TV and the internet, and I can't find an intelligent discussion such as this anywhere. Anyways, I love the consistency of Dr. Paul, and his ability to be articulate about his understandings. I don''t always agree, but I always respect him...and he is a politician.
Ron Paul. Correct in 1983, correct today
This clip is priceless, Thank You!
its kind of like ronald reagan said "governments don't tend to solve problems, they just rearrange them"
This was a wonderful video
I watch C-SPAN on a regular basis, and you can find quality programming like this not only on C-SPAN, but on PBS, and occasionally on MSNBC and CNN.
Omg Ron Paul still going strong, your amazing!
Ron Paul
The smartest and most intelligent politician I have ever seen.
RON PAUL IS MR FREEDOM
Only 40,000 views. It's a shame
I didn't know Burt Reynolds knew economics!
Thanks for sharing joe.
13:36 - I love that smirk."Typical example of how one intervention leads to another one or two government interventions." Pretty sure I heard him say the exact same thing today. And yesterday... and for the last decade.
Awesome, great, glad to hear it.
"in competitive market consumer is the kind" Ron Paul
This was an example of real, not contrived discussion.
20 years ago, I thought Ron Paul was a fringe lunatic.
Today I see him as a rare luminary figure in the perpetually dark world of politics.
If only more people realized this!
Any era , any year, his message doesn't change. Henry Clay would have loved Ron Paul
I agree with you on the third point, and the second. But as to the first point if the corporation is larger than the government and more powerful how can they prevent coercion and fraud? Corporations will simply create their own laws (similar to home owners groups' rules), get their own miltiias, police, fire, prisons, etc and become their own governments.
"even the telephone companies can experience competition"
Boy were these guys wrong. LOL.
What I don't understand is how people can watch these old videos of libertarians accurately making predictions and then write off libertarians as crazy.
Great convo
There's a very interesting article called "the case for antitrust enforcement" by Jonathan B. Baker. It dealts if most of the criticism presented here and does a very good job debunking it.
Monopolies and large corporations only become truly powerful when they are protected by regulations. The big guys have plenty of lawyers to deal with them, and the little guy gets screwed. We need to make sure there is free entry, so there is at least the threat of competition at all times. Also, corporate persohood is a government invention in the first place..
I'd particularly like to see the coercive monopoly that government enjoys broken up. They're particularly abusive.
@eirefrance What are you asking? It is a trust I concede that, i'm making the point that Trusts don't need to be busted. Your comment was a challenge to the speaker's question and I answered that challenge
Looking at the professor reminds me how much I miss the show Magnum PI.
He didnt expect big companies wouldn't give a fuck about the consumer choice
They all care about consumer choice. Name one that doesn’t?
@@1974dormouse Wow, we've got a light there that understands everything about economics. Dude, if Microsoft cared about consummer choice, they wouldn't impose their shit standards. Same about Google or any company that owns a monopoly
@@temudjin1155 Those companies have monopolies due to government intervention 🤦🏻♂️ dude
@@1974dormouse oh I know that well
A point that I would like to make is that corporate "profiteering" in an openly-competitive market must also incorporate consumer "profiteering". The difference is that the corporations make their profit in MONEY by raising revenues higher than costs. Similarly, consumers profit by receiving goods that are more valuable to them than their price. They profit in UTILITY. The labor costs they endure to afford the goods are less than their labor would be to create a similar or identical good.
Protectionism is the mother of monopolies
I had to stop the video and look up what N-I Trust laws was... but google gave no results, so after thinking for 5 minutes I figured out they meant ANTI trust law, not n-i trust law.
But the way they pronounce it is just so incredibly misleading.
Definition of 'Monopoly' Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. ... He enjoys the power of setting the price for his goods.
Because deregulation worked so fucking well with Enron and with utility California
You're right. Willette will save money. The question is what do they do with that savings?
1) Keep the extra profit. This doesn't hurt consumers, but does benefit shareholders.
2) Lower prices to get more business. This benefits consumers & shareholders at the expense of competitors.
3) Try to increase prices. If they succeed in doing so, their competition will expand.
Only #3 has the potential to be bad. But like ACDC7369 said, we don't have historical examples of this actually happening.
im to dumb to understand what they are talking about half the time but still very intersting
Boon1333 Antitrust laws prevent corporations from making decisions which intentionally disadvantage or prevent competition. Therefore, it is only companies at an advantage which can can employ antitrust policies against their current or potential competition. For the most part, lesser corporations could not even be in a position to disadvantage higher corporations in any meaningful way. I watched this because I am fascinated by how they can twist such an essential part of what makes capitalism sustainable into something which is bad.
Remember, money talks, and antitrust laws are here to make sure money does not also enslave. If a company is allowed to kneecap competition, no one could EVER compete. Antitrust laws are directly and precisely a set of laws to prevent monopolies and protect the people from being extorted.
Before them, companies would make decisions which may cause the deaths of individuals, in order to bankrupt companies. NO ONE wants us to go back to that.
Richard Smith
You assume that all monopolies are caused by bad people. What about the Alcoa example presented?
Its the stunning irony of Libral "Progressive" type of ideas that actually kills progression! Look how he described bell telephones of how they had a government watched monopoly and franchise while the market was calling for more players! This is one of the thousands of things that happens when you have government regulation and intervenion.
True hero
yay!! a young ron paul!!
Ok question: What's to keep a corporation once they have a monopoly from turning around and screwing consumers over after they establish their position and wipe out competition?
As a follow-up just because a company is run out of business doesn't mean their facilities disappear so as long as the capital structure exists price-cutting only leads to losses for the price-cutter, as someone will buy the production facility, because the owner who got ran out of business will have no further use for it as they cannot finance running it. So they sell cheap and the next guy comes into the picture in a better position than the last and price-cutting turns out to be impossible.
back in the day, where you could have civilized intellectual discussions
Hmmm "right to work laws/states"....seems as though that is covered in the 'bill of rights'...
Cell phones provide a clear counterexample to your phone example, with many companies building their own infrastructure basically from zero.
Even before that, MCI challenged AT&T's government-enforced monopoly by developing a new technological way of delivering phone service. Of course, AT&T tried to fight this initially... not through competition but through government.
Eventually the government did a 180 and broke up AT&T, after protecting it for decades.
yeah ron paul!!! It makes sense....that's why I like him.
what about if a company gets so rich that they can buy out all of there competition?
for example right now at&t is about to take over tmoblie. they can make the price whatever they want once they have eliminated the competition.
can someone please explain to me how the free market will fix this problem?
they talked about it briefly in this video but they really didnt answer my question, or atleast i dont feel like it was explained in detail.
@IcyScythe You can't kill competition without the government. THe bigger you get, the more you have to fuel (pensions, medical etc...)
It's always easy to undercut the big guy
Your only power to change them is through the government which would be significantly smaller than the corporate power. So how would it have any power of enforcement?
@Kaasperav Which isn't a trust how?
I must say I’ve been hoodwinked in school. It’s not necessarily information that is inverted but the omission of it. Austrian Chicago School economics are definitely useful as opposed to Keynesian.
@eirefrance Standard Oil also delivered a 95% (i think that's about right) reduction in Kerosene prices and opened up a completely new market in energy. Even though he dominated the market with his company he still provided much cheaper prices than anyone could offer (and Rockefeller obviously still made a profit) so there was no need for competition since he still offered a superior product that the consumers willingly paid for without government intervention.
And, no, I haven't read Armentano's books. How much Douglas North, Acemoglu, Moshe Adler and Krugman have you read?
As meambobbo indicated, human lives are not sustained automatically by "resources". Such resources require that labor be applied to be discovered, acquired, processed, and distributed. So to claim a "right" to such resources is to claim a "right" to force others into the labor necessary to provide these. This is a type of slavery. Profit is the compensation for the investment of one's labor (or the fruits thereof).
In the free-market cartels are impossible to sustain because every individual member in the cartel would stand to benefit from breaking from the cartel. In a cartel the members restrict production to raise prices, however, at these raised prices each firm in the cartel will profit more from increasing production, tending to collapse the cartel. Furthermore at raised prices new firms enter the market which ruins the cartel. Only when firms are forced by law to collude can cartels function.
And important point here, however, is that healthcare is not a right, because it has to be provided through other people's labors. So rather it is a commodity which should be freely traded in a free market. If someone can't afford such a trade, they must do without it. The only way the term "over pay" has meaning is if the price isn't decided through a free market.
Yeah, definitely. In today's talk shows, people jump from one topic to another without exploring far enough into each topic at hand. The shows today are very superficial and unsubstantive, compared to this one. Even in the channels that specialize in reporting on the economy, economic theory is rarely, if ever discussed.
This is similar to the situation you find in so-called "universal healthcare". Since the government chooses not to conscript doctors into forced servitude, it has to force everyone else into servitude by seizing a portion of the fruits of their labors to pay the doctors. You may argue that nobody is forced to labor, but if they did not, who would pay the doctors? How could this healthcare be deemed a "right"? In the US, the average worker is forced to work for the government until April 30.
RON PAUL 2012? yup!
5:20 Standard Oil?
@eirefrance At the height of Standard Oil, it had something like 85% of the market share (of course it did create the kerosene market). By the time the antitrust case was brought against them, the share had already started falling to the 60% range.
The obvious counterargument would be "Well you can choose not to live there." But realistically once oligarchs started seeing this as profitable they would all start doing this. There would be no reason for them not to.
Ron Paul was right. About everything.
@hiyukenmusic In a free market system there is no corporate welfare or corrupt politicians giving one corporation advantage over another. Companies must truly compete for profits. Before the massive expansion of regulations, taxation and government there was a much more competitive free enterprise system. Monopoly, price fixing, customer gouging etc. were rarities. It was the corporations using the corrupt government that desired regulations in order to stifle their competition.
Also this isn't a debate so there is no reason to expect opposing viewpoints.
It would be less likely for competitors to enter the market, especially if the first company does a decent job. If the first phone company became abusive enough, however, competitors would put up the money.
I came to this video to learn about the subject in the wake of the U.S.'s suit against Apple and e-books.
Like all truths are, simple and easy to fit into a little mental box.
@sedatedlife18 I was thinking the exact same thing as I was watching this. You'll never see an intelligent discussion like this in the mainstream media
Yes, like you said, a simple truth. Like the simple truth that someone who thinks there is a limited, controlled role the govt should be playing in the economy is a worshiper of the state, a statIST, if you would. Such a simple and easy truth.
Actually I think it's more accurate to say that it was the relaxed application of antitrust rules that allowed banks to merge and become bigger and bigger.
Today's crisis is an example on why people should return to a stricter economic regulation. Not a reason to strip the regulation further as some in the libertarian movement argue.
I have read some Krugman, what I have read in no way negates the FACTS Armentano sites in his work.
The moralities of humanitarianism and ecology (altruism, responsibility, stewardship, etc.) have been disregarded in favor of short-term 'market efficiency', benefiting only those who will buy their product and be content with its quality and origins, be they ignorant, distracted, or numb. A company like this could use its influence to buy-out or silence most competition, so that most innovation is controlled. How would the market system intervene to address this destructive, excessive behavior?
That is quite the complexion.
There is no evidence that any monpolies or cartels have ever survived for a significant amount of time or dominance over the free market without govt assistance. This is because monopoly and lack of competition always create inefficiency, which in turn breeds competition. Not only does your position contradict basic logic, but there is no historical evidence backing any of it up.
Kinda disagree with that on two points.
I wouldn't call the government backing of loans regulation. It was more a case of social engineering.
I agree that regulation sometimes creates moral hazards. However the "free market crowd" always forget market imperfections like the agent problem, and assimetric information.
The problem was not only the poorly made loans but also their repackaging and lack of oversight on the products being sold in the financial market.
government is a monopoly
how could it protect against monopoly?
There are a lot of interesting points being made here but what they fail to realize is that the general public is stupid. A monopoly CAN thrive on giving a disproportional market price. What we need is organized consumerism!
I support break ups, when consumers have NO OTHER CHOICE; for example, most of us cannot choose our utilities, and so we have few options if we are being unfairly treated (due to outrageous rates, or lousy service). It's already wrong that the consumer often can't choose their gas and power companies, but to have huge companies come in, and ignore/treat the customer unfairly, but to have these huge companies come in (and do that very thing, across an entire state or region) is completely unacceptable.
If you have a situation like the invention of a product or service, whereby the only choice for consumers is from the inventor, a breakup would be unjust (this does not refer to patents). The same goes for monopolies that arise from selection, where a single entity provides a good in such quality and at such price as to become the sole preferred distributor by consumers. A monopoly only deserves to be broken up when it is established through such a wrongful way as discussed in this interview - collusion with government via political means like patents and antitrust legislation. Even then however, a "breakup" is excessive; all that is needed for rectification is the elimination of the state's presence and influence in the arrangement so that the monopolistic firm will once again be liable to face competition from other firms.
Parke Pro Tennis I disagree. As is the case with many utilities, there is not necessary collusion between the gvmnt and said utility. The consumer, however, has no choice but to use that utility; they are not necessarily the sole preferred service, so their income could arise from unfair business practices and their lack of competition. In some (such as water utilities) having more than one servicer wouldn't be practical.
Now in other instances (such as with both the Bell services and AT&T) that was wrong IMO; people had a choice NOT to use the Bell Services, and people didn't have to use computers using Microsoft services (be it Windows or Internet Explorer, because they could have picked computers running Linnux), and it's not vital to have a phone or computer. The city won't let you live in a building, however, that doesn't have power or water. If people voted with their dollars (in either of these choices), Bell and Microsoft would've been forced to back down/change their policies.
If the city you live in won't allow you to live in a structure without power or water, then that's a good example of anti-competitive, corporatist behavior on the part of the government in your neck of the woods. But even if this wasn't the case and it really was impractical as you say, to have multiple utility companies servicing your city, you could always choose to relocate to a locale served by better quality firms or provide your own utilities (ex: solar panels, wells, etc.). That is, unless the government does not allow you to, and so we return to the issue of statist intervention...
True.
I wish Ron Paul would run for Gov. of Texas.
I understand that the profit margins are raised by forming a cartel but that still doesn't change the incentives of each firm in the cartel to break away. However, even if created successfully the cartel cannot stop outsiders from entering the market to get a share of their raised profits. The price/quality war still exists after a cartel is formed, which is why they are doomed to fail both by internal and external forces. Without coercion a cartel cannot force an industry to follow its rules
If you co-merge, you most certainly can afford to reduce value/increase price moreso than not co-merging. You're also ignoring the point that no natural monopoly has ever been created without the assistance of some form of government abuse of the free market, ever in recorded history.
Alan Greenspan used to be for the gold standard, too. I wonder what he got for selling out?
-jcr
@joshua1auhsoj I remember when AT&T was broken up in trhe 80's under anti-trust laws. And I also remember what happened to the prices for phone services IMMEDIATELY after. They went up sharply.
And now Google, Facebook, Twitters exercise power over free speech. ATT never censored speech on telephone calls!
Corporate America... sigh.
IBM, Intel, all large pharms, seed and fertilizer companies.
This discussion thus far has not accepted the existence of a monopoly at all. Why did the Sherman Antitrust act get passed in the first place???
Government is definitely imperfect. But it is a product of imperfect people. The thing about government is at least we can change government. We cannot change corporations without first using government.
@smashing86 Asymmetric information in the market arises because of human imperfection. It is a leap to conclude that we need government intervention because of these alleged problems.
The rightful authority comes from political power which comes from the barrel of a gun ultimately. These corporations don't do the right thing because we ask them to. The reason we have building codes and all sorts of standards is because people, and corporations could not be trusted to do the right thing left alone. Government didn't just step in because they were bored and someone wanted to make money issuing permits.
@pankskink The state is good in managing epidemics and war? Have you looked into the performance of the UN in battling AIDS and malaria in Africa? Have you read about the war in the Middle East? With the sheer size of government spending they are bound to create some good effects, but the good that the state does is just that, accidental in nature.
Government as a legal monopoly over security and judicial services is entirely unnecessary and unjustified, without violently restricting competition it couldn't function Finally industries cannot determine prices alone, they must satisfy consumers. So if one firm lowers prices it gains the patronage of consumers and the cartel has no customers. Cartels can't force consumers to buy from them, so they have a huge incentive to offer lower prices to take away competitors customers.
economic regulation is why we had the credit crisis. these banks were required by regulators to sell bad loans that they wouldnt have otherwise sold.
@TheRamenAvenger with lots of competition, that business would go out of business over night...we don't have competition in this country right no
It's a simple truth.
libertarians do challenge the status quo.
Of course individuals would prefer a cartel to maximize profit, but that doesn't matter if cartelization is impossible. If a cartel exists each individual will still profit more by breaking from it even though as a whole the industry profits more in a cartel. Cartels can form but they can never last, or be successful, as new entrants and undercutting are incentivized. Forcing competition is also known as slavery, if a man doesn't want to work so be it.
Ten members of the fed dislike this video.
you trust companies or not, you trust government or not. or illiminate trust and regulate by a large governing body.
if the loans werent required by the government, they never would have happened, at least to the degree in which they did, and we wouldnt be talking about this now. regulation caused this problem, not a free market. in fact, a truly free market would have prohibited this problem.
If the cartel undercuts a business not in the cartel the owner will go bankrupt and simply sells his facility at a low cost to cover his losses. So a new factory owner arrives who bought at a low price and can continue production at a lower cost than the previous owner and if the cartel undercuts the new arrival this process continues ad infinitum. Eventually the cartel goes broke. Finally, I'm a market anarchist, so, I think the market will better provide security services than gov't.
You are conflating the individual firm with the entire industry. Yes, profit for the industry as a whole is maximized through cartels but for each individual firm the incentive is against cartelization. For example suppose all oil firms decide to cartelize and raise prices of oil 10%. At this raised price the incentive for the individual firm is to operate at full capacity because the increased price offers much higher profits. The cartel cannot stop its members from breaking from the cartel