NationStates Jolt Archive

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.

What about international companies? Cant they just localize themselves somewhere different. Are you talking a universal concept? Do you have a specific industry in mind?

How about we just leave the market and the economy alone, and let people do whatever they want with their private companies.

Have the corporations you have in mind grown so long as to exert unopposed over their market, as in they can set the price and quality of their product with little or no chance of competition? If so, then yes, break them up, as they have become a threat to the free market. If not, leave them be.

Yes, let's punish success! :rolleyes:

The appropriate action would be "murder the corporations", because the central problem with the corporation is their legal personhood.

Corporations are effectively considered immortal people by our government.

Meh, corporations are not human, thus they should not be accorded any rights. Might make people think about where they invest their money. Holy shit, someone might actually be legally responsible for their actions?

We do break up corporations that reach a certain size. How big depends upon the size of the marketplace they are competing in however.

Isn't this an issue in the Game?

Much as I dislike the way huge corporations treat human beings, this wouldn't work. And anyway, who would I hate?

It would be an utter disaster, causing most likely massive economic instability, higher prices, and a ruined international trade system.

Remember, not all companies are the same; it all hinges on their product and what the average cost curve looks like for the industry. Some industries, generally those with high startup costs, are naturally more efficient at a larger size because the costs can be spread out over a lot of units. The automotive industry, for example, is a perfect case; it costs a lot to build a facility and design/market/produce a line of cars, and consequently the industry is going to have to sell a lot of them in order to maximize its profits per vehicle.

By restricting their optimal size, you're going to make them less efficient and less profitable, resulting in less cash flow, higher costs to consumers, and consequently less money invested in the economy. In fact, you might even cause shortages of consumer durables because of the sheer amount of inefficiency in the system. The amount of value destroyed would be absolutely staggering, most likely far more than the original value of the corporation.

The appropriate action would be "murder the corporations", because the central problem with the corporation is their legal personhood.

Corporations are effectively considered immortal people by our government.

I always thought that was bullshit. Corporations aren't people, they can't do anything without being directed to by their owners. And you can't own a person anyway. Not even if you jointly own them. I see no reason for them be treated like human beings who never die.

Have the corporations you have in mind grown so long as to exert unopposed over their market, as in they can set the price and quality of their product with little or no chance of competition? If so, then yes, break them up, as they have become a threat to the free market. If not, leave them be.

the threat is when a corporation owns media and news services, which it then creates a conflict of interest with, stopping them from reporting on things that the parent company doesn't want reported.

In fact, any corporation getting big enough begins to threaten the free market, it seems.

I'm not talking about destroying the corporations, I'm talking about cutting them into their component entities.

It would be an utter disaster, causing most likely massive economic instability, higher prices, and a ruined international trade system.

Remember, not all companies are the same; it all hinges on their product and what the average cost curve looks like for the industry. Some industries, generally those with high startup costs, are naturally more efficient at a larger size because the costs can be spread out over a lot of units. The automotive industry, for example, is a perfect case; it costs a lot to build a facility and design/market/produce a line of cars, and consequently the industry is going to have to sell a lot of them in order to maximize its profits per vehicle.

By restricting their optimal size, you're going to make them less efficient and less profitable, resulting in less cash flow, higher costs to consumers, and consequently less money invested in the economy. In fact, you might even cause shortages of consumer durables because of the sheer amount of inefficiency in the system. The amount of value destroyed would be absolutely staggering, most likely far more than the original value of the corporation.

My main aim is not companies like ford and chevrolet, but companies like Viacom and AT&T, who have come to own a huge number of other companies, many completely unrelated.

I would prefer a system that encourges them to pay their employees more, but that would likely create a system where companies would only house their business sector and then use outward labor for everything else.

Why don't we just cut all government subsidies to major corporations first and see how that works, okay?

And then we can see how many of these corporations collapse without the support. Some need it to survive.

Why don't we just cut all government subsidies to major corporations first and see how that works, okay?

How about we just leave the market and the economy alone, and let people do whatever they want with their private companies.

Child labor? Long hours? Low pay? Regulation is necessary and corporations are only in existence to make moeny and they will do whatever it takes and something needs to stand up and say: "That's not right."

How about we just leave the market and the economy alone, and let people do whatever they want with their private companies.

I second.

If you don't like what they're doing, don't shop there. Novel idea!

My main aim is not companies like ford and chevrolet, but companies like Viacom and AT&T, who have come to own a huge number of other companies, many completely unrelated.

Still, you face the problem of average cost and efficiency. Telecoms are also expensive; laying fiber-optic cable, managing networks, routing internet and phone traffic and maintaining service for millions of people is very expensive. In order to deliver market-demanded products, they have to be big in order to have the technology and resources to provide them.

That's why so many of the telecom and semiconductor startups in the 90's went broke; they could not grow revenue fast enough to recoup their costs, and the oversupply of firms led to gluts in capacity that drove prices down further.

The only real exemption to this is if they are a monopoly, in which case the problem is with the market rather than the company itself.

Smaller corporations = less jobs, slower cash flow, far more expensive products.

And then we can see how many of these corporations collapse without the support. Some need it to survive.

Then their industry is uneconomical. I'm really referring to giants like GE and Time Warner.

Child labor? Long hours? Low pay? Regulation is necessary and corporations are only in existence to make moeny and they will do whatever it takes and something needs to stand up and say: "That's not right."
Child labour? Where? It mostly appears where the lives of the children would be worse without that labour.

Long hours? If the workers had something better to do with their time, they wouldn't work them.

Low pay? Then why are the workers taking it?

This is a bad idea, for the reasons Vetalia already mentioned.

Concentrated corporate power is generally a very bad thing for any society that seeks justice, freedom, and equality, but there are better ways of countering it than making many small corporations from one large one; increased regulation or outright seizure would be a better solution.

Then their industry is uneconomical. I'm really referring to giants like GE and Time Warner.

That's true. The main problem of corporate subsidies is that they distort the market, allowing firms to remain either uneconomically small or (more likely) uneconomically big with the result being decreased efficiency and less competition, which in turn results in the consumer getting screwed.

I mean, there's no reason why massive companies like Exxon or ADM should be getting billions in government money to produce their product; if they aren't competitive on their own, they deserve to go under and be broken up or sold.

Do you, by any chance, subscribe to the view that if someone is not in gainful employment it is because they are lazy and choose not to to work?
Of course not. Sometimes the government screws up the economy.

My point here was that sweatshops (the places where all three of those conditions exist) are good for their employees.

Child labour? Where? It mostly appears where the lives of the children would be worse without that labour.

Long hours? If the workers had something better to do with their time, they wouldn't work them.

Low pay? Then why are the workers taking it?Do you, by any chance, subscribe to the view that if someone is not in gainful employment it is because they are lazy and choose not to to work?

Child labour? Where? It mostly appears where the lives of the children would be worse without that labour.

Long hours? If the workers had something better to do with their time, they wouldn't work them.

Low pay? Then why are the workers taking it?

Easy for you to say, you don't have to take those jobs. These corporations could earn plenty of profit and still pay their workers a fair wage.

Easy for you to say, you don't have to take those jobs. These corporations could earn plenty of profit and still pay their workers a fair wage.

Exactly. Sometimes the choice is between unfair wages and no wages at all. I could manage to survive like that for a while, but not if I had to support anyone else.

How about we just leave the market and the economy alone, and let people do whatever they want with their private companies.
no.

I tend to agree with th OP. We should at least find some way of removing corporations comparable rights to human beings. The fact that a corporation has the same civil rights as I do just is weird. I have always wondered why we dont' simply require that one person be the sole owner of any corporation, responsible for any liabilities, or debts of that corporation. Then people can buy stock as normal, but the owner still has all the responsiblility..This would force companies to act more appropriatly, and supress a bit of the price fixing and stock option gaming we see.

Child labour? Where? It mostly appears where the lives of the children would be worse without that labour.

Right you are. I've got 500 orphans working in coal mines at 2 cents a month and they'd better appreciate it! Safety measures? Pah. If they die, I can always get another bunch of orphans.


Long hours? If the workers had something better to do with their time, they wouldn't work them.

That's right. Who needs to give these lazy workers lunch breaks? They can work 24 hours a day or they can lump it. I'm doing them a favor by hiring them as it is.


Low pay? Then why are the workers taking it?

Damn right. These lousy unionists. Who do they think they are, demanding a living wage? Why, if they can't stretch 2 dollars to last a month, they're obviously incapable of spending wisely.

[/sarcasm]

How'd you like to work in a world like that?

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.

A) What purpose does this serve? This will only put unnecessary stress on the bookkeepers and accountants.

B) I think the extra money should go into a charity or medical research.

This thread (like all other economic threads on NS) proves that socialists shouldn't be allowed to touch any world economy with a 10 foot pole.

The appropriate action would be "murder the corporations", because the central problem with the corporation is their legal personhood.

Corporations are effectively considered immortal people by our government.

Oh yes, by all means, kill the bastards. Ending corporate personhood is the definite first step.

Sensitive things like media that control public discourse we cannot allow to have large concentrations in small numbers of hands. I definitely advocate breaking them up.

I think that there should also be a ban on the patenting of genetic information, and an end to these ridiculously long copyright protections.

This thread (like all other economic threads on NS) proves that socialists shouldn't be allowed to touch any world economy with a 10 foot pole.

Tell me, what is socialistic about preventing monopolies?

The cost of preventing monopolies are usually higher than the cost of allowing a monopoly to continue to exist.

Either that particular area of the market gains from having just a single producer, in which case we lose efficiency and see higher prices for average people like you and me, or that particular area of the market does not gain from having just a single producer, in which case the problem should be self-correcting.

Tell me, what is socialistic about preventing monopolies?

Well, this isn't preventing monopolies.

It's about screwing over consumers, producers, investors, and most importantly workers. After all, big =/= Monopoly. This is penalizing companies for being efficient rather than doing anything to prevent monopolies.

A lot of the "Free Market" proponents in this thread are getting it wrong. A market can be restricted by more things than the government. A strong state that's able to break up monopolies, duopolies, and all those other "opolies" is essential to the maintenance of a free market.

For instance, I live in a town with two providers of cable. Time-Warner and Verizon. Before, it was just Verizon. We were charged exhorbenant prices, given crappy service, and any upstarts we're swiftly broken because they maintained a monopoly.

Competition, the essential equalizer of the free-market, is contradictory to the tendency towards centralization, which necessitates government control if the Market is "free".

While I don't completely agree with the OP solution, I'll firmly agree that it is a problem.

How about we just leave the market and the economy alone, and let people do whatever they want with their private companies.


Why when all the corps are concerned about is their bottom line regardless of who else they hurt in the process.

Why, when all the corps are concerned about is their bottom line regardless of who else they hurt in the process?
Because their only ethical responsibility is to
A.) Follow the law
B.) Help the shareholders.


The Governments job is to maximize the potential of all companies to make money while minimizing public risk.

Easy for you to say, you don't have to take those jobs. These corporations could earn plenty of profit and still pay their workers a fair wage.
They need to earn ever increasing profits in order to increase their share price, and that's what they're trying to do.

Exactly. Sometimes the choice is between unfair wages and no wages at all. I could manage to survive like that for a while, but not if I had to support anyone else.
How are they unfair if they're the only wages available? What makes them unfair?

no.

I tend to agree with th OP. We should at least find some way of removing corporations comparable rights to human beings. The fact that a corporation has the same civil rights as I do just is weird. I have always wondered why we dont' simply require that one person be the sole owner of any corporation, responsible for any liabilities, or debts of that corporation. Then people can buy stock as normal, but the owner still has all the responsiblility..This would force companies to act more appropriatly, and supress a bit of the price fixing and stock option gaming we see.
The whole point of corporations is to limit personal liability. Without that, there's no reason ever to establish one.

Because their only ethical responsibility is to
A.) Follow the law
B.) Help the shareholders.


The Governments job is to maximize the potential of all companies to make money while minimizing public risk.


So the fact that they don't mind poluting the Earth, as long as you make a profit by doing so is ok huh? How about moving to communist countries to save money, thats ok too huh.

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.

Hell of a way to drive large corporations out of the host country. Kinda like the US Tax code.

I say that if someone is a hard enough worker to form a monopoly then good for him. It'll just mean that anyone who wants to challenge their status will have to work harder and come up with something really revolutionary. It's Darwinism at work.

Right you are. I've got 500 orphans working in coal mines at 2 cents a month and they'd better appreciate it! Safety measures? Pah. If they die, I can always get another bunch of orphans.
Without your mine, what would their lives be like? Better? Or worse?

I'm betting worse.
That's right. Who needs to give these lazy workers lunch breaks? They can work 24 hours a day or they can lump it. I'm doing them a favor by hiring them as it is.
They're not lazy; they're desperate. By exploiting that desperation, you pump money into the local economy.

Again, without your jobs, would they be better off?
Damn right. These lousy unionists. Who do they think they are, demanding a living wage? Why, if they can't stretch 2 dollars to last a month, they're obviously incapable of spending wisely.
I have nothing against unions. If the workers want to band together to gain negotiating leverage, by all means do so.
How'd you like to work in a world like that?
I do live in that world. We all do. And it works pretty well. There is no other mechanism that so empowers regions of extreme poverty as giving them jobs does.

Look, if the lives of the workers are already horrendous, and I improve those lives by giving them a low-paying job, how can I have done anything wrong? I helped them.

They need to earn ever increasing profits in order to increase their share price, and that's what they're trying to do.
and tehre, in a nutshell, is why we should kill of the whole idea of market shares.

Without your mine, what would their lives be like? Better? Or worse?

I'm betting worse.

They're not lazy; they're desperate. By exploiting that desperation, you pump money into the local economy.

Again, without your jobs, would they be better off?

I have nothing against unions. If the workers want to band together to gain negotiating leverage, by all means do so.

I do live in that world. We all do. And it works pretty well. There is no other mechanism that so empowers regions of extreme poverty as giving them jobs does.

Look, if the lives of the workers are already horrendous, and I improve those lives by giving them a low-paying job, how can I have done anything wrong? I helped them.

Dude, if those workers are starving on what you pay them, you aren't helping them. If they are so desperate they cross national borders illegaly to find a job that pays them enough to raise a family you aren't doing anybody a service. The problem here, is that corporations are by nature stingy, destructive groups of people who are driven by their very structure to destroy, cheapen and dehumanize. Their only function is to make money for a minority of the population by exploiting the majority. If poeple are trapped into the system of earnign income to stay alive then they don't have much choise do they? Can't buy land without a job to earn the pay to buy the land. Can't pay taxes on that land without a cash income, and the land generally won't provide that. Our modern economic system has trapped people and tehre is literally no way fror them to provide for themselves because of corporate ownership of all means of self sustenance. So they're basically wage slaves. Thanks for helping them mister corporation.

Here's an idea.

Lets just nationalise all the corporations and force the businessmen to only use factories that encourage basic levels of human rights.

Oh, wait, that'd make some rich white families Millionaires instead of Billionaires.

Couldn't be having that, could we?

Here's an idea.

Lets just nationalise all the corporations and force the businessmen to only use factories that encourage basic levels of human rights.

Oh, wait, that'd make some rich white families Millionaires instead of Billionaires.

Couldn't be having that, could we?
Of course!

As we all know, the government is inherently efficient, and this has worked in all cases.

In fact, I think it would be a Great Leap Forward.

Of course!

As we all know, the government is inherently efficient, and this has worked in all cases.

In fact, I think it would be a Great Leap Forward.

We should also consider collectivization and Lysenkoism; I've heard they are marvelously efficient at boosting agricultural production.

Tell me, what is socialistic about preventing monopolies?

Anti-trust laws aren't socialism. Breaking a company up because they reach x billion dollars in sales during a given fiscal year is. It isn't just socialism, it is an idea born from idiots who lack any basic understanding on competition and economic growth.

We should also consider collectivization and Lysenkoism; I've heard they are marvelously efficient at boosting agricultural production.

Yes! Let's nationalize all farms! It worked so well in the Soviet Union.

I love reading the posts of socialists on these economic topics. They are a great cheap source of humor. I'm sure you share in that sentiment Vetalia.

Without your mine, what would their lives be like? Better? Or worse?

I'm betting worse.

Ahh, that's the beauty of the system. I say they'd be worse, but in truth, it's not. It's slavery, without the chains. You see, we get $20 of work out of them each day, but pay them only $0.02. Sure, they can't keep themselves fed that way, and they die from starvation, if not cave in's eventually. But who cares? Orphans can be gotten by the bucketload for a few bucks.

In fact, this model was so successful, the Soviets modeled their political prisons (Gulags) after it. Heck, they even had enough 'enemies of the state' to rival orphans.


They're not lazy; they're desperate. By exploiting that desperation, you pump money into the local economy.

Nope. I export all the goods and funnel the money into my accounts on the Cayman Islands.


Again, without your jobs, would they be better off?

Maybe, but I can't have that. Lower class people working for a living wage? I can't have that.


I have nothing against unions. If the workers want to band together to gain negotiating leverage, by all means do so.

Unions formed because of the above conditions. That's why I got the government to back me up in having those lazy bastards clubbed to death.


I do live in that world. We all do. And it works pretty well. There is no other mechanism that so empowers regions of extreme poverty as giving them jobs does.

No, you don't. If you do, you either live in a 3rd world country, are illiterate or are a political prisoner, or all three. The other possibility is that you are one of the ones running a firm that practices the above.


Look, if the lives of the workers are already horrendous, and I improve those lives by giving them a low-paying job, how can I have done anything wrong? I helped them.

Of course you haven't done anything wrong. If they were upper class people, working them to death would be criminal, but they're lower class, so nobody cares if they die in droves.

Looking at your posts, I would say you're a upper middle class person, possibly teenager, who complains about the government because it's the trendy thing to do. You need more life experience.

But then again, I've come across older people who are frighteningly ignorant.

I love reading the posts of socialists on these economic topics. They are a great cheap source of humor. I'm sure you share in that sentiment Vetalia.
I know I do.

Breaking a company up because they reach x billion dollars in sales during a given fiscal year is.

No, it isn't; it's an attempted solution to corporate concentration that the actual socialists have been criticizing for over a century.

For someone who derives so much amusement from other people's alleged ignorance, perhaps you should learn something about what socialists really think.

Yes! Let's nationalize all farms! It worked so well in the Soviet Union.

I love reading the posts of socialists on these economic topics. They are a great cheap source of humor. I'm sure you share in that sentiment Vetalia.

I believe that the socialists are having even more fun than you are, starting with the claim that socialism has anything to do with nationalism or nationalization of any sort. They love it when people like you say it, because it allows them to be all condescending when they explain the fact that socialism cannot co-exist with the concept of nationality.

I believe that the socialists are having even more fun than you are, starting with the claim that socialism has anything to do with nationalism or nationalization of any sort. They love it when people like you say it, because it allows them to be all condescending when they explain the fact that socialism cannot co-exist with the concept of nationality.

Socialism on a large scale has always involved state coercion in order to succeed, and has always required repression and fear in order to maintain its hold on power. The closest thing to an exception is Yugoslavia, and even they required the control of Tito in order to maintain stability.

As the Soviets were fond of saying: "Socialism is control".

Yes! Let's nationalize all farms! It worked so well in the Soviet Union.
Why stop there? We could nationalise human beings too. :)

Socialism on a large scale has always involved state coercion in order to succeed,

So has capitalism on a large scale.

As the Soviets were fond of saying: "Socialism is control".

And as plenty of real socialists have been fond of saying for about fifty years now, the policies of the Soviet Union bore little resemblance to the policies advocated by socialists.

And as plenty of real socialists have been fond of saying for about fifty years now, the policies of the Soviet Union bore little resemblance to the policies advocated by socialists.
I think Hayek pretty convincingly argued that the strongman tactics in the old Soviet Union were the direct result of a failure to garner consensus among the various planners.

I think Hayek pretty convincingly argued that the strongman tactics in the old Soviet Union were the direct result of a failure to garner consensus among the various planners.

Because that's the only way to resolve differences?

Because that's the only way to resolve differences?
Well, if you think about, when we cannot reach a consensus in a dispute, we do turn to a strongman figure. In our particular case it is the courts, but the basic principle still applies.

So has capitalism on a large scale.

Yes, but capitalism has also proven itself compatible with democracy.

And as plenty of real socialists have been fond of saying for about fifty years now, the policies of the Soviet Union bore little resemblance to the policies advocated by socialists.

The reference is to the form of "socialism" imposed by the authoritarians of the Eastern Bloc.

Yes, but capitalism has also proven itself compatible with democracy.

And the anti-socialists have yet to provide a good reason that non-private ownership of the means of production is incompatible with democracy.

The reference is to the form of "socialism" imposed by the authoritarians of the Eastern Bloc.

That was not at all Xenophobialand's reference; he is referring to the intended end state of Marxist Communism.

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.

No.

No.
Pretty much sums it up. :)

And the anti-socialists have yet to provide a good reason that non-private ownership of the means of production is incompatible with democracy.

Well, the main problem now is that people still can't agree on how exactly the means of production should be used, and the other problem is that scarcity is still a very real part of our economic system which requires us to use market pricing to allocate goods.

Now, if these problems could be addressed, socialism would work. If they can be is another question, but I do believe it is possible.

That was not at all Xenophobialand's reference; he is referring to the intended result of Marxist Communism.

My mistake.

Well, the main problem now is that people still can't agree on how exactly the means of production should be used,

People disagree over everything; that's why we have political decisionmaking. Hardly an insurpassable problem.

and the other problem is that scarcity is still a very real part of our economic system which requires us to use market pricing to allocate goods.

Market pricing is not only not necessary for the allocation of scarce goods (ask any family), but is also not precluded by public ownership of the means of production. And relevant scarcity is mostly cultural; it has only a tenuous connection to the number of goods that are actually produced.

None of these problems preclude socialist democracy, anyway.

Wealth redistribution?
Sounds like a COMMIE idea to me.
*glares at potential commies*

Seconded. *glares at potential commies*

More people flock to my cause!
(builds a small fort and raises the American flag)
None of you commies are going to redistribute OUR wealth!

EDIT:
Also, in before AND after time warp.
EMIT XODORAP

Wealth redistribution?
Sounds like a COMMIE idea to me.
*glares at potential commies*

Seconded. *glares at potential commies*

Pretty much sums it up. :)

I'm glad you agree. :fluffle:

I'm glad you agree. :fluffle:
How could I not? :D

I believe that the socialists are having even more fun than you are, starting with the claim that socialism has anything to do with nationalism or nationalization of any sort. They love it when people like you say it, because it allows them to be all condescending when they explain the fact that socialism cannot co-exist with the concept of nationality.

List me one socialist state that has existed without nationalism. The fact is that outside of little communes, socialism doesn't work. Sure it takes money from the rich, but in the end, every single person (outside of high government officials of course) ends up poorer than those living under the poverty line in the US.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

Why? As you yourself said, it's an arbitrary limit and I don't see the purpose, other than to punish success, increase the power of the government and discourage business.

No, the free market is a good thing, do not fear it.

No, the free market is a good thing, do not fear it.

The free market touched me inappropriately when I was a child.

Can't pay taxes on that land without a cash income, and the land generally won't provide that.
Well there's you're problem. Don't tax assets.

Ahh, that's the beauty of the system. I say they'd be worse, but in truth, it's not. It's slavery, without the chains. You see, we get $20 of work out of them each day, but pay them only $0.02. Sure, they can't keep themselves fed that way, and they die from starvation, if not cave in's eventually. But who cares? Orphans can be gotten by the bucketload for a few bucks.

In fact, this model was so successful, the Soviets modeled their political prisons (Gulags) after it. Heck, they even had enough 'enemies of the state' to rival orphans.

Nope. I export all the goods and funnel the money into my accounts on the Cayman Islands.
Sweatshops typically pay $1-2/day. And that's money that's now in the local economy. When enough money has been added through wages, the sweatshop will close and move somewhere else more desperate. Eventually, everyone's wealthy enough that there aren't sweatshops.

The kids who work in sweatshops already have lives that are dangerous, with very little food, and involve long hours of work (like subsistence farming). The sweatshops don't make any aspect of their lives worse, and they make some of them better.
Unions formed because of the above conditions. That's why I got the government to back me up in having those lazy bastards clubbed to death.
That's government intervention. I don't support that. If the workers can band together through voluntary association to gain more leverage, I encourage them to do so. In fact, I would argue that if they can the local conditions are already too good to support the continued existence of a sweatshop.
No, you don't. If you do, you either live in a 3rd world country, are illiterate or are a political prisoner, or all three. The other possibility is that you are one of the ones running a firm that practices the above.
It's all the same world. The wealth of the west is built upon that sort of industry, and that sort of industry helps everyone.
Of course you haven't done anything wrong. If they were upper class people, working them to death would be criminal, but they're lower class, so nobody cares if they die in droves.
If they were upper class, they wouldn't choose to work this dangerous job. But for the extremely poor, it's the best option they have.

Again, I'm improving their lives by giving them jobs. I can't be the bad guy, here.
Looking at your posts, I would say you're a upper middle class person, possibly teenager, who complains about the government because it's the trendy thing to do. You need more life experience.
I'm in my 30's and employed by an international charity.

The poverty around the world persists because the people are not free to help themselves.

A lot of the "Free Market" proponents in this thread are getting it wrong. A market can be restricted by more things than the government. A strong state that's able to break up monopolies, duopolies, and all those other "opolies" is essential to the maintenance of a free market.

For instance, I live in a town with two providers of cable. Time-Warner and Verizon. Before, it was just Verizon. We were charged exhorbenant prices, given crappy service, and any upstarts we're swiftly broken because they maintained a monopoly.

Competition, the essential equalizer of the free-market, is contradictory to the tendency towards centralization, which necessitates government control if the Market is "free".

While I don't completely agree with the OP solution, I'll firmly agree that it is a problem.

Monopolies are creations of government regulation. In the above example of cable companies, local cable providers have government support for having a monopoly because the cable industry, through extensive lobbying campaigns, convinced politicians that a stable and reliable cable service would only be possible if they had a monopoly on the local markets. Fortunately this grip has been substantially weakened in the last few years, resulting in many markets being allowed multiple providers.

Monopolies cannot exist in a free market (with the exception of a few ‘natural monopolies’ that exist purely in economic theory). Competition ensures that monopolies can only maintain dominance by continuing to provide services to people at reasonable prices or loose that dominance to others. While industries with high startup costs tend to take a while as monopolistic behavior has to be sufficiently egregious that enough customers will choose the new entrant to justify the high cost, even these industries cannot maintain monopolistic behavior for long. Only government protection allows a company to maintain a monopoly and provide substandard service for above market rate prices.

People love to use ‘those evil corporations’ as a scapegoat for all their problems. In the past it was the ‘evil Jewish bankers’ that were the scapegoat. That has since become unacceptable to blame all your financial problems on such a group, but corporations are an easy target because you see them as faceless entities.

Corporations are run by human beings. They are not some nebulous evil entity lurking in the shadows; they are collections of actual human beings who make decisions with their human minds and human feelings. Instead of blaming all the worlds’ problems on your scapegoat, why not actually take the time to learn about basic market functions.

People love to complain about places like Walmart, but it is a superficial complaint. The customers, despite protesters claims, like the service it provides and continue to support the company. The employees likewise continue to support the company or they would seek jobs elsewhere. Customers are free to shop somewhere else and employees are free to work somewhere else, thus both customers and employees prefer Walmart to the alternative.

The free market touched me inappropriately when I was a child.

capitalism stole my virginity

The free market touched me inappropriately when I was a child.

That Invisible Hand is at it again! ;)

Monopolies are creations of government regulation....Monopolies cannot exist in a free market (with the exception of a few ‘natural monopolies’ that exist purely in economic theory). Competition ensures that monopolies can only maintain dominance by continuing to provide services to people at reasonable prices or loose that dominance to others. While industries with high startup costs tend to take a while as monopolistic behavior has to be sufficiently egregious that enough customers will choose the new entrant to justify the high cost, even these industries cannot maintain monopolistic behavior for long. Only government protection allows a company to maintain a monopoly and provide substandard service for above market rate prices.

Corporations are run by human beings. They are not some nebulous evil entity lurking in the shadows; they are collections of actual human beings who make decisions with their human minds and human feelings. Instead of blaming all the worlds’ problems on your scapegoat, why not actually take the time to learn about basic market functions.


Few big problems with that. By there very nature, even the most perfectly competitive market will trend towards monopoly. Competitiveness in a market environment is determined by how well one can pass of externalities to others. In competition for limited resources, inevititably the playing field starts to shrink as some groups are more effective then others.

If the process is allowed to continue, market concentrations will not only increase start up costs and technology costs, but will also trend towards creating massive vertical integration. Pending some quantum leap in technology that will allow new corporations to make an end run around the existing concentrations of capital, the market will continue to concentrate without any outside interference until only one or 2 firms remain.

Corporations may be run by human beings, but through limited liability and shareholder law, corporations are required to be conscienceless. There investors may have consciences, and their executives may have consciences, but the both the structure of a corporation and the natural corruption of power lead to very little being done to alleviate suffering or prevent abuse. Add to this the legal fiction of corporate personhood, and we have immortal, conscienceless "persons" larger and more powerful than most states that have all the rights and privileges of an individual. That is dangerous.

Few big problems with that. By there very nature, even the most perfectly competitive market will trend towards monopoly. Competitiveness in a market environment is determined by how well one can pass of externalities to others. In competition for limited resources, inevititably the playing field starts to shrink as some groups are more effective then others.

If the process is allowed to continue, market concentrations will not only increase start up costs and technology costs, but will also trend towards creating massive vertical integration. Pending some quantum leap in technology that will allow new corporations to make an end run around the existing concentrations of capital, the market will continue to concentrate without any outside interference until only one or 2 firms remain.

Corporations may be run by human beings, but through limited liability and shareholder law, corporations are required to be conscienceless. There investors may have consciences, and their executives may have consciences, but the both the structure of a corporation and the natural corruption of power lead to very little being done to alleviate suffering or prevent abuse. Add to this the legal fiction of corporate personhood, and we have immortal, conscienceless "persons" larger and more powerful than most states that have all the rights and privileges of an individual. That is dangerous.

If monopolies arise in perfectly competitive markets, it means those monopolies are providing the best possible utility to its customers, and is thusly a good thing. Either the dominant company provides exactly what a customer wants, or as near as possible, or a competitor will arise to serve the market.

Either way, monopoly or a wide field of competition, a free market will ensure that consumers gain the maximum utility possible. Preventing monopoly is not a goal itself, for there is nothing wrong with monopolies which provide the best possible product for the best possible price. Do not loose sight of the fact that, in the end, what matters is the maximization of utility.

As I stated before, the only way a monopoly will come about in a free market is if having that monopoly maximizes the benefit to consumers. Now if you take this out of theory and into reality, no one corporation will ever be able to provide everything to everyone with any reasonable efficiency. Thus competitors will be created to serve the market and provide consumers with what they feel they have been lacking (be it more innovative products, better service, better prices, or just a logo they like better).

Your reference to limited resources belies that you either consider economics to be a zero sum game (which it most certainly is not) or that humanity is close to reaching absolute perfect efficiency and exploitation of all resources as well as having reached the pinnacle of technological innovation. I happen to disagree and say there is boundless room for improvements, and thus we will never reach such a finite limit.

There are no industries in existence which have such astronomical entry costs which eliminates the possibility of competition. I challenge you to name just one industry which has such a barrier. Without government protection (use of force by the state – which is not compatible with free markets) there is no such thing.

Corporations are not ‘required’ to be conscienceless. The CEO of a corporation does not wake up one day and say “even though I am a good person, I will do evil things today because I run a corporation”. There is absolutely nothing about the structure of a corporation that forces men to do evil things. Nothing.

Corporations have legal status precisely because they are made up of individuals who may come and go. Corporate entities are bound by law so that you cannot simply fire someone and then deny all legal liability because you blame it on a mistake one of the employees made.

Limited liability exists precisely to protect investors, which encourages investment (which, in case you haven’t been paying attention, drives modern economies). Without such protection, investments would become a far riskier proposition and therefore would only be limited to those who could afford to take such risks. In the event of a company going bankrupt, the shareholders are not personally liable for the debts of that company so that you do not loose your retirement savings because of a failed business.

To give you a completely unrelated example which might help give you an idea of being risk averse, doctors who were liable for the death of any patient they treated no matter what the circumstance, would never risk helping a patient who was at risk of death. Doctors are only at risk if there was gross incompetence or negligence – much like individuals in a company are criminally liable if there is any fraud (which is kind of ludicrous in my mind that you get a shorter jail sentence for murder) – so that they can take the risk of operating on a patient near death. Without such protections, only the foolhardy would take such a risk.

Would you risk not only your life savings, but the potential to be plunged into massive debt if someone in a company made a bad decision? I don’t think most people would, so remove limited liability and you remove most of the capital for investment from the economy. Companies would crash, economies of scale would be lost, efficiencies from large-scale coordination would be lost, and you suddenly return to an economy entirely comprised from cottage industries. Welcome to the third world.

If monopolies arise in perfectly competitive markets, it means those monopolies are providing the best possible utility to its customers, and is thusly a good thing. Either the dominant company provides exactly what a customer wants, or as near as possible, or a competitor will arise to serve the market.

Either way, monopoly or a wide field of competition, a free market will ensure that consumers gain the maximum utility possible. Preventing monopoly is not a goal itself, for there is nothing wrong with monopolies which provide the best possible product for the best possible price. Do not loose sight of the fact that, in the end, what matters is the maximization of utility.


The problem is that you assume conditions that exist with government regulation continue into this deregulated market.

What, for example, would happen with water electricity and gas supplies that are privately owned and unregulated? The best possible product for the best possible price? Not if they've got you by the balls.

The problem is that you assume conditions that exist with government regulation continue into this deregulated market.

What, for example, would happen with water electricity and gas supplies that are privately owned and unregulated? The best possible product for the best possible price? Not if they've got you by the balls.
Alberta deregulated its electricity provision. The prices fluctuate a lot due to market forces, but you can always buy power in big pieces (long-term contracts) to avoid that.

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.
Did you ever stop to think that big corporations got so big because *gasp* maybe, just maybe, they outperformed their competitors; that they got to where they are today because they were the best in the bizz at whatever it is they do?

I'll agree that adversity breeds inovation and that a lack of it will lead to stagnation and decay but you usual;ly don't have to worry about that unless there's a monopoly.

The problem is that you assume conditions that exist with government regulation continue into this deregulated market.

What, for example, would happen with water electricity and gas supplies that are privately owned and unregulated? The best possible product for the best possible price? Not if they've got you by the balls.
There's a mistake in this argument. You're assuming monopolies exist in a vacuum (as well as assuming they profit-maximise opposed to, say, sales-maximising). They do not. A monopoly that overcharges whilst being efficient will earn high profits. This will attract competitors, especially on financial markets. It will therefore have to still compete.

If the monopoly is inefficient, its costs will be higher than they could have been otherwise. Other more efficient firms will see this as an opportunity for profits, and again compete with the monopoly for its share of the market. There are many, many very large, powerful firms out there that can cause serious problems for monopoly firms that are inefficient. The only way for a monopoly to create effective barriers to entry in a market is precisely by virtue of being efficient (assuming it doesn't manipulate government regulation to favour it, or even use it to outlaw competition), and undercutting potential competition. And anyway, a monopoly stands to gain the most profits where it can price-discriminate, in which case markets will be priced according to their ability to pay.

If monopolies arise in perfectly competitive markets, it means those monopolies are providing the best possible utility to its customers, and is thusly a good thing. Either the dominant company provides exactly what a customer wants, or as near as possible, or a competitor will arise to serve the market.

Either way, monopoly or a wide field of competition, a free market will ensure that consumers gain the maximum utility possible. Preventing monopoly is not a goal itself, for there is nothing wrong with monopolies which provide the best possible product for the best possible price. Do not loose sight of the fact that, in the end, what matters is the maximization of utility.

As I stated before, the only way a monopoly will come about in a free market is if having that monopoly maximizes the benefit to consumers. Now if you take this out of theory and into reality, no one corporation will ever be able to provide everything to everyone with any reasonable efficiency. Thus competitors will be created to serve the market and provide consumers with what they feel they have been lacking (be it more innovative products, better service, better prices, or just a logo they like better).

Your reference to limited resources belies that you either consider economics to be a zero sum game (which it most certainly is not) or that humanity is close to reaching absolute perfect efficiency and exploitation of all resources as well as having reached the pinnacle of technological innovation. I happen to disagree and say there is boundless room for improvements, and thus we will never reach such a finite limit.

There are no industries in existence which have such astronomical entry costs which eliminates the possibility of competition. I challenge you to name just one industry which has such a barrier. Without government protection (use of force by the state – which is not compatible with free markets) there is no such thing.

Corporations are not ‘required’ to be conscienceless. The CEO of a corporation does not wake up one day and say “even though I am a good person, I will do evil things today because I run a corporation”. There is absolutely nothing about the structure of a corporation that forces men to do evil things. Nothing.

Corporations have legal status precisely because they are made up of individuals who may come and go. Corporate entities are bound by law so that you cannot simply fire someone and then deny all legal liability because you blame it on a mistake one of the employees made.

Limited liability exists precisely to protect investors, which encourages investment (which, in case you haven’t been paying attention, drives modern economies). Without such protection, investments would become a far riskier proposition and therefore would only be limited to those who could afford to take such risks. In the event of a company going bankrupt, the shareholders are not personally liable for the debts of that company so that you do not loose your retirement savings because of a failed business.

To give you a completely unrelated example which might help give you an idea of being risk averse, doctors who were liable for the death of any patient they treated no matter what the circumstance, would never risk helping a patient who was at risk of death. Doctors are only at risk if there was gross incompetence or negligence – much like individuals in a company are criminally liable if there is any fraud (which is kind of ludicrous in my mind that you get a shorter jail sentence for murder) – so that they can take the risk of operating on a patient near death. Without such protections, only the foolhardy would take such a risk.

Would you risk not only your life savings, but the potential to be plunged into massive debt if someone in a company made a bad decision? I don’t think most people would, so remove limited liability and you remove most of the capital for investment from the economy. Companies would crash, economies of scale would be lost, efficiencies from large-scale coordination would be lost, and you suddenly return to an economy entirely comprised from cottage industries. Welcome to the third world.

First off, the reason why monopolies are bad is because any concentration of power is bad. I don't particularly relish the idea of being beholden to just one corporation for my means of survival. I don't think most people do either. When power concentrations exist they will be abused. Absent state intervention, many of these massive vertically integrated corporations would become the de facto state, (think Old West railroad towns). Not only were there horrible human rights and labor rights abuses (being killed by privately owned police, etc.), they effectively created their own state monopoly of power, and prevented unwelcome competition from coming in until the State intervened.

What if one groups obtains a monopoly on the means of sustaining life? What then? At that point, everyone is "free" to sell themselves to that giant or they are "free" to perish. Nothing in economic or social theory can justify the existence of a monopoly.

Corporations are conscienceless because of the flipside of limited liability. By law, a corporation is required to maximize profit. Now this might not seem bad, but legally a corporation can be sued by its shareholders for not breaking the law or for not trying to do everything possible (including coercing opponents or beating/murdering striking workers) to maximize profit. Through either action or inaction, the law requires corporations to be conscienceless. Thus, caring for the environoment is permissible only if it doesn't reduce profits. Paying workers enough to live on is a cardinal sin.

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.

Breaking up corporations is often a good thing, but it shouldn't be done arbitrarily. It's like surgery. It can be done to correct a serious problem, but to just decide that everyone should have their apendix out a week after they turn 25, but not a day before or after, would be stupid and harmful. To remove dangerously infected and inflamed apendices is lifesaving and necessary.

Same with corporotomies.

No, the free market is a good thing, do not fear it.

I am constantly dismayed by the faith that people seem to have in the Invisible Hand of the Market. It's almost a religion the way that people will credit the market at arriving at whatever result they think is best simply because it's a good thing and the market makes good things happen.

It's the same way that racists think God hates blacks and homophobes think he hates gays. Except that the free market people often argue for the opposite of what they really believe. "The market would have abolished segregation had you been faithful."

The free market is not a good thing, or an evil thing. It's a thing. And like most things it needs to be controlled or else it's going to make bad things happen. Like how a fire can cook your food, or burn down half the west coast depending on how well you control it.

Ok, I mislead you in the title. I don't mean break them up totally.

However, I would propose that an arbitrary limit be set as the maximum size any corporation should be allowed to grow to (lets say, for example, 50 billion dollars worth of assets as a tentative limit) at that point, the company must be broken into pieces, and different branches of the company must be made independent, running on their own.

In theory, this shouldn't reduce the total value of the company.

Hold on, if a corporation divides and de-centralizes, it DOES in fact lose its value, especially if each branch is independent in expenses and revenues. It would be a refresing change too see a CEO make less than 450 times what his secretary makes, however. :cool:

I am constantly dismayed by the faith that people seem to have in the Invisible Hand of the Market. It's almost a religion the way that people will credit the market at arriving at whatever result they think is best simply because it's a good thing and the market makes good things happen.

It's the same way that racists think God hates blacks and homophobes think he hates gays. Except that the free market people often argue for the opposite of what they really believe. "The market would have abolished segregation had you been faithful."

The free market is not a good thing, or an evil thing. It's a thing. And like most things it needs to be controlled or else it's going to make bad things happen. Like how a fire can cook your food, or burn down half the west coast depending on how well you control it.
I disagree. The market is often wrongly characterised as a separate "thing". In reality, the market is a sum of all our demands backed up by all our abilities to trade to get them. We are the market.

First off, the reason why monopolies are bad is because any concentration of power is bad. I don't particularly relish the idea of being beholden to just one corporation for my means of survival. I don't think most people do either. When power concentrations exist they will be abused. Absent state intervention, many of these massive vertically integrated corporations would become the de facto state, (think Old West railroad towns). Not only were there horrible human rights and labor rights abuses (being killed by privately owned police, etc.), they effectively created their own state monopoly of power, and prevented unwelcome competition from coming in until the State intervened.

Once again, you are stating that monopolies are bad because there is a lack of a free market. With a free market, the only way to stay a monopoly is to provide a good service at a reasonable price. Ergo, being a monopoly in and of itself is not a bad thing. Likewise, stating that any concentration of power is bad is ludicrous as you are basically society as a whole is abhorrent and that everyone should be a completely autonomous unit. Abuse of power is a bad thing; power itself is not inherently bad.

What if one groups obtains a monopoly on the means of sustaining life? What then? At that point, everyone is "free" to sell themselves to that giant or they are "free" to perish. Nothing in economic or social theory can justify the existence of a monopoly.
How do they obtain this monopoly? How do they maintain holding this monopoly?
The use of force to kill or maim others in order to keep their monopoly is a bad thing, not the presence of a monopoly. If a monopoly exists in a free market, it is more efficient and provides a better service than any potential competitor, and being a monopoly likely gives it a better economy of scale than would otherwise be possible. Thus a monopoly can be a good thing.

Corporations are conscienceless because of the flipside of limited liability. By law, a corporation is required to maximize profit. Now this might not seem bad, but legally a corporation can be sued by its shareholders for not breaking the law or for not trying to do everything possible (including coercing opponents or beating/murdering striking workers) to maximize profit. Through either action or inaction, the law requires corporations to be conscienceless. Thus, caring for the environoment is permissible only if it doesn't reduce profits. Paying workers enough to live on is a cardinal sin.

I don’t know where you live, but there is no such law in any nation with which I am familiar. Executives in corporations are legally required to abide by the wishes of the shareholders, as they are the owners of the company and thus the executives could be personally liable for the misuse of other’s property. If those running a corporation want to operate at a loss, they are completely free to do so (provided a majority of the shareholders do not object at the annual meeting).

The executives in a corporation cannot be sued for not breaking the law. That is not possible. They can be sued for being negligent and not respecting the wishes of the shareholders. I have no idea where you get the idea that those running a corporation are legally required to break the law and use immoral means to make a profit.

If you actually look around at what happens in the real world rather than getting 100% of your information from a highly biased communist publication, you might find the world is not what you think. I can give you dozens of examples from my own personal experience of how people in businesses do not behave immorally to maximize profit.

Ask anyone who has actually worked in managing a business and you will find that everyone in business is not skulking in the shadows plotting to rape and murder in the name of profit. I don’t know where you get your ideas, but you seriously need to get out of your parent’s basement and into the real world once in a while.

Once again, you are stating that monopolies are bad because there is a lack of a free market. With a free market, the only way to stay a monopoly is to provide a good service at a reasonable price.

Hahahaha, no.

The way to stay a monopoly is to ensure high barriers to entry and crushing the competition. Normally, you don't see monopolies for milk or bread brands, but that's because barriers to entry are low. But for stuff like cars, construction, aviation, microprocessors, the barriers to entry are naturally high. Meaning, you need huge gobs of money to start it up.

Established monopolies suppress their competition by either offering temporary low prices, which they can absorb with their existing bankroll, or adding more features. This only lasts until the competition folds. Then they jack up prices/cut service support.

Monopolies can charge whatever they feel the consumer is willing to pay, which can be fairly ludicrous if it is a vital product/service, simply because there isn't a viable alternative. Furthermore, as a monopoly, there is hardly any reason to innovate or significantly improve over a short time. Why? Because nobody can challenge them without getting the short end of the stick.


The use of force to kill or maim others in order to keep their monopoly is a bad thing, not the presence of a monopoly. If a monopoly exists in a free market, it is more efficient and provides a better service than any potential competitor, and being a monopoly likely gives it a better economy of scale than would otherwise be possible. Thus a monopoly can be a good thing.


Monopoly's by their very nature, are slower to innovate than in more decentralized markets. Observe Soviet public goods innovation compared to American public goods innovation. One was monolithic in the sense that it had only one driving force for innovation, a monopoly. The other one was freer. Which one had better goods?

Or how about the age old Linux vs Microsoft? Microsoft is without a doubt, a monopoly in the OS software market, yet Linux and other freeware related software have always kept one step ahead of the giant in terms of improved security, resource management and other key functions.


Ask anyone who has actually worked in managing a business and you will find that everyone in business is not skulking in the shadows plotting to rape and murder in the name of profit.

CEO's answer to shareholders. Shareholders answer to their pocketbooks. Shareholders will almost always demand the company produce profits within their expected margins or greater. Whether for their own benefit (Enron), or due to shareholder pressure, CEO's will investigate and possibly take, whatever underhanded means there are to maximize profits and minimize competition.

To think otherwise is naive in the extreme.

The way to stay a monopoly is to ensure high barriers to entry and crushing the competition. Normally, you don't see monopolies for milk or bread brands, but that's because barriers to entry are low. But for stuff like cars, construction, aviation, microprocessors, the barriers to entry are naturally high. Meaning, you need huge gobs of money to start it up.

High barriers to entry are fairly irrelevant if there is a high rate of return – a market in which there is only one other firm is likely to yield high profits in the long run. There are “huge gobs of money” out there if you want to enter into a profitable field.

The only way for a monopoly to ‘crush’ the competition is to offer a better product at a better price – in which case this ‘crushing’ of the competition is good for consumers.

The barriers to entry for construction are negligible. The only real barrier you face is finding competent and experienced contractors.

Cars and aviation are not that difficult to get into, there are many firms in both fields – the reason why everyone isn't producing cars or planes is that they simply are not very profitable businesses these days. The exception would be in military aircraft, in which case the profit is derived from it not being a free market as it is driven by being politically connected.

Microprocessors are likewise not very difficult to get into, there are many firms making chips and thus the profit margin is not sufficient to attract many more. They are a bulk commodity.

Point out any industry with high profit margins and I will point out that it is not a free market – the exception to this would be fashionable things because branding distorts the system. Only commodities are really equivalent, so high end luxury items are exempt from this simply by the nature of such specialty markets. Even within such high end markets, profits are not very high as there is some degree of substitution possible

Monopolies are simply not possible without government protection.

Established monopolies suppress their competition by either offering temporary low prices, which they can absorb with their existing bankroll, or adding more features. This only lasts until the competition folds. Then they jack up prices/cut service support.

Monopolies can charge whatever they feel the consumer is willing to pay, which can be fairly ludicrous if it is a vital product/service, simply because there isn't a viable alternative. Furthermore, as a monopoly, there is hardly any reason to innovate or significantly improve over a short time. Why? Because nobody can challenge them without getting the short end of the stick.

New entrants are likely to be more innovative and offer better service than a monopolistic company. Thus they will be able to capture market share. The market does not operate in a single-instance, past behavior influences current consumer behavior. Many consumers take their previous poor opinion of the monopoly and will likely choose the new entrant based upon their previous poor experience. Undercutting price does not work – if there are profits to be made, new entrants build in the initial price war into their business model and extend the time they expect to turn profitable.

The only way for a monopoly to beat out a new entrant is to offer such a substantially better product than the competition to overcome the poor reputation it has earned before and extend this beyond the timeframe any new entrant can survive. In which case the consumer benefits from said competition. The moment prices go back up and service becomes poor again, they have reestablished the consumer bias against them and inspired a new entrant, who is further encouraged by the vastly diminished ability of the monopoly to survive another price war. This cycle is effectively a competitive model, despite temporary monopoly status. Shareholders of a monopoly will not tolerate protracted price wars in this fashion. The whole inspiration behind the ‘monopolies cut prices to starve out new entrants’ view is Standard Oil, which was possible a hundred years ago, but not today.

There is always an alternative, because if there ever isn't, and the monopoly is not providing a quality product at a reasonable price, some other company will come in to capture profits. The one and only way this does not work is if there is not a free market – such as government mandated monopolies for cable companies. Even then they are feeling the pressure from satellite television.

Monopoly's by their very nature, are slower to innovate than in more decentralized markets. Observe Soviet public goods innovation compared to American public goods innovation. One was monolithic in the sense that it had only one driving force for innovation, a monopoly. The other one was freer. Which one had better goods?
Once again, the Soviet system was not a free market by any stretch of the imagination.

Or how about the age old Linux vs Microsoft? Microsoft is without a doubt, a monopoly in the OS software market, yet Linux and other freeware related software have always kept one step ahead of the giant in terms of improved security, resource management and other key functions.

Perhaps you need to lookup what ‘monopoly’ means. Microsoft is the dominant company in the industry, but it is nowhere near a monopoly. Consumers have always had alternatives to Microsoft. There has not been one single moment when Microsoft has had a monopoly. That most consumers choose Microsoft products may be confusing to you, but it is a free choice.


CEO's answer to shareholders. Shareholders answer to their pocketbooks. Shareholders will almost always demand the company produce profits within their expected margins or greater. Whether for their own benefit (Enron), or due to shareholder pressure, CEO's will investigate and possibly take, whatever underhanded means there are to maximize profits and minimize competition.

To think otherwise is naive in the extreme.
Shareholders demand that companies maintain a reasonable share price mostly, which does include keeping profits high (especially those who expect a good dividend). This in no way implies that shareholders demand the executives commit criminal acts. Suggesting that the very structure of corporations somehow force people to commit unethical and heinous acts is lunacy.

People ignorant of the business world love to hold Enron up as an example, but it is ludicrous to extrapolate that every company is run like Enron. That is prejudice in the extreme. While Enron and Worldcom were badly managed, they are in the minority. There are over 5 million corporations registered in the US alone, how can you possibly state that a small handful of executives behaving in such a manner is indicative that every executive is wholly unethical? This kind of statement simply belies that you do not personally know any executives and hold highly prejudicial views based on nothing more than a few smattered news reports of the acts of a couple of individuals (yes, I said individual. Executives are actual people and not identical clones. Some people are good; some people are crooks – what job you have does not change that).

High barriers to entry are fairly irrelevant if there is a high rate of return – a market in which there is only one other firm is likely to yield high profits in the long run. There are “huge gobs of money” out there if you want to enter into a profitable field.

Of course markets with only one firm will yield the highest profits. There's nobody else to take a slice of that pie.


The only way for a monopoly to ‘crush’ the competition is to offer a better product at a better price – in which case this ‘crushing’ of the competition is good for consumers.

Hah, you'd think that wouldn't you? Better prices? You're out of your gourd. WalMart pushed for higher minimum wages once before, and it certainly wasn't for that nice fuzzy feeling. By enforcing higher minimum wages, lesser competitors can get snuffed out by the higher costs, which WalMart can easily absorb and then turn around and charge higher costs to the consumer once there isn't any competition.

1500cc of morphine may feel good for you, until you end up dying that is.

Monopolies only, and only, consider lower prices when there is serious competition, by which they are no longer monopolies. But once they have consolidated their hold, there's nothing to stop them from jacking prices up to the moon until the next sucker manages to scrape enough capital to form a startup.

As
The barriers to entry for construction are negligible. The only real barrier you face is finding competent and experienced contractors.

Have you ever even looked at what is required before you can get into the business?

As
Cars and aviation are not that difficult to get into, there are many firms in both fields – the reason why everyone isn't producing cars or planes is that they simply are not very profitable businesses these days. The exception would be in military aircraft, in which case the profit is derived from it not being a free market as it is driven by being politically connected.

Unless you're into home built cars or microlights, automative and aviation industries require huge amounts of resources to enter, much less make a foothold. Factories, R&D, marketing, testing, licensing and all that create initial costs that spiral into the millions. And that's just startup infrastructure. Let's not forget the cost of experienced and capable staff.

You're really naive aren't you?

As
Microprocessors are likewise not very difficult to get into, there are many firms making chips and thus the profit margin is not sufficient to attract many more. They are a bulk commodity.

Hahahahahaha, many firms making chips maybe, but how many of them had massive backers when they started? It's not something you can start without really deep pockets and a highly trained crew of engineers.

As
Monopolies are simply not possible without government protection.

That's what you'd like to think. Without government protection or regulation, the largest corporations would be more than capable of creating monopolies all on their own.

As
New entrants are likely to be more innovative and offer better service than a monopolistic company. Thus they will be able to capture market share.

For as long as it takes for the monopoly, with it's deeper pockets, to outlast the rival in a price war. Or simply buy them out.

As
The market does not operate in a single-instance, past behavior influences current consumer behavior. Many consumers take their previous poor opinion of the monopoly and will likely choose the new entrant based upon their previous poor experience. Undercutting price does not work – if there are profits to be made, new entrants build in the initial price war into their business model and extend the time they expect to turn profitable.

Not counting government intervention, the only way new entrants can outlast a price war against monopolies is if they've manage to attract enough customers to stay afloat before their accounts run dry. Can you show me an example where that has happened?

As
The moment prices go back up and service becomes poor again, they have reestablished the consumer bias against them and inspired a new entrant, who is further encouraged by the vastly diminished ability of the monopoly to survive another price war.

And how long before this new contender shows up hmm? You cannot manufacture a competing business out of thin air nor can you make it appear overnight, no matter how rich you are. A new rival in the makings would have to prepare before it can officially compete, by which then a watchful monopoly would be prepared for it.

As
Once again, the Soviet system was not a free market by any stretch of the imagination.

No, but the Soviet system did have a monopoly on R&D of goods. We all saw what happened there.


Perhaps you need to lookup what ‘monopoly’ means. Microsoft is the dominant company in the industry, but it is nowhere near a monopoly. Consumers have always had alternatives to Microsoft.

Alternatives I can think of are Linux and it's derivatives, Apple, Oracle, and....no one else. Linux cannot really considered to be a competitor despite affecting market share simply because it is free.


There has not been one single moment when Microsoft has had a monopoly. That most consumers choose Microsoft products may be confusing to you, but it is a free choice.

Anti-trust lawsuits were filed at times when Microsoft appeared to taking steps towards becoming one.


Shareholders demand that companies maintain a reasonable share price mostly, which does include keeping profits high (especially those who expect a good dividend). This in no way implies that shareholders demand the executives commit criminal acts.

The shareholders certainly do not explicitly demand executives commit criminal acts, but at the same time, they do not explicitly demand that they do make profits above board.


Suggesting that the very structure of corporations somehow force people to commit unethical and heinous acts is lunacy.

See Bhopal disaster involving Union Carbide. Or Shell refinery fire incident (I forget the name). Both instances were the result of severe corporate negligence in terms of safety inspections and regulations in order to minimize costs. Union Carbide denied negligence on their side while Shell blamed refinery staff, some of whose actions actually prevented the disaster from worsening. Neither company accepted fault for their actions.

Why?

For negligence, the bottom line. For the denial, public relations.


People ignorant of the business world love to hold Enron up as an example, but it is ludicrous to extrapolate that every company is run like Enron.

Enron is but one of many, many corporations which are more than willing to engage in unethical, illegal and dangerous actions in order to minimize costs. Aircraft disasters caused by extremely tight scheduling, toxic waste dumping into waterways, insufficient testing for pharmaceuticals, negligent maintenance on critical infrastructure, all these and more are commonplace practices by corporations globally wherever they can get away with it.

I do not know where you live, but one such example, illegal toxic waste dumping by corporations, is a chronic issue here.


That is prejudice in the extreme. While Enron and Worldcom were badly managed, they are in the minority.

You hold that corruption and unethical practices are in the minority. I contend that they are in the majority. Enron only made papers because the scandal was so huge, it became the flagship example.


There are over 5 million corporations registered in the US alone, how can you possibly state that a small handful of executives behaving in such a manner is indicative that every executive is wholly unethical?

All executives? Of course not. That would be a gross exaggeration. Most executives is closer to the truth.


This kind of statement simply belies that you do not personally know any executives and hold highly prejudicial views based on nothing more than a few smattered news reports of the acts of a couple of individuals (yes, I said individual.

You do not know me, thereby you are not exactly fit to judge who I do, and don't know personally. However, I do know people of the executive level, and what I've seen leaves a bitter taste in my mouth.


Executives are actual people and not identical clones. Some people are good; some people are crooks – what job you have does not change that).

In the dog eat dog world of today, more often than not, it is the ruthless and cunning who rise up to become executives and leaders. And ruthless people are hardly bound by the rules of ethics.

I disagree. The market is often wrongly characterised as a separate "thing". In reality, the market is a sum of all our demands backed up by all our abilities to trade to get them. We are the market.
Yeah, but that's difficult to visualise in our heads, so we make stuff up. It's like "mother nature". Or "nations" or "races" or "classes".

We always seem to want to attach personalities and behaviours to random phenomena or abstract ideas. Silly us!

Yeah, but that's difficult to visualise in our heads, so we make stuff up. It's like "mother nature". Or "nations" or "races" or "classes".

We always seem to want to attach personalities and behaviours to random phenomena or abstract ideas. Silly us!
Fair enough, but it isn't always just a matter of semantics. Many people who deride the concept of the market do not realize that they are attacking the average person's choice of purchases.

I think a lot of people make stupid choices of purchases. However, I will try to convince those people to change their habits rather than have the government force them to do so.

Hah, you'd think that wouldn't you? Better prices? You're out of your gourd. WalMart pushed for higher minimum wages once before, and it certainly wasn't for that nice fuzzy feeling. By enforcing higher minimum wages, lesser competitors can get snuffed out by the higher costs, which WalMart can easily absorb and then turn around and charge higher costs to the consumer once there isn't any competition.

And this is where I point out to you that most anti-business laws do not end up accomplishing what you think they should. We are back to a free market clause – lobbying for an increase in the minimum wage to squeeze competitors is indirectly asking for government protection against competition. It takes government intervention to significantly harm the welfare of the consumer.

Monopolies only, and only, consider lower prices when there is serious competition, by which they are no longer monopolies. But once they have consolidated their hold, there's nothing to stop them from jacking prices up to the moon until the next sucker manages to scrape enough capital to form a startup.

Competition against firms like Walmart is difficult precisely because they are so efficient, when monopolies become stagnant, inefficient, and over-priced, they open the door for competitors. These competitors will appear at a speed directly relative to how poorly the monopoly is performing.

Have you ever even looked at what is required before you can get into the business?

Quite well acquainted with starting companies in several industries on a first-hand basis.

Unless you're into home built cars or microlights, automative and aviation industries require huge amounts of resources to enter, much less make a foothold.

Yes they do, largely because the competition is sufficiently fierce that they are not highly profitable industries (for the most part). Even small producers of durable goods offer competition to a monopoly and can very rapidly eat away the dominant company’s market share were it to behave monopolistically.

Factories, R&D, marketing, testing, licensing and all that create initial costs that spiral into the millions. And that's just startup infrastructure. Let's not forget the cost of experienced and capable staff.

This actually reminds me of the movie Austin Powers – when Dr Evil asks for one million dollars in ransom. A few million in startup funds is fairly minimal for many industries. A new small plane, just for example, takes about $15 million to startup and get going on any significant scale. Were the general aviation industry not completely in the toilet but you actually had the possibility of turning a profit within 5 years, getting that kind of money would be fairly easy.

You're really naive aren't you?
No, I probably just have a different base of experience.

That's what you'd like to think. Without government protection or regulation, the largest corporations would be more than capable of creating monopolies all on their own.
Though I am sure I could come up with a theoretical model fairly easily, I cannot think of a single industry in the real world where there is the danger of a monopoly in a free market.

Not counting government intervention, the only way new entrants can outlast a price war against monopolies is if they've manage to attract enough customers to stay afloat before their accounts run dry. Can you show me an example where that has happened?
If a competitor cannot attract customers from the dominant firm, then obviously the welfare of the consumer is sufficiently provided for by the monopoly and it is therefore irrelevant that a monopoly existed.

I cannot point to any examples as monopolies are exceedingly rare in the US, and only exist with government protection. On the other hand, I also cannot come up with examples of any companies using a price war to gain a monopoly without going all the way back to Standard Oil.

Price wars between competitors do happen all the time and monopolies do not result from them. All that happens is that they sacrifice some profits in the hopes of gaining market share for a while. Since operating at a loss for any significant amount of time is self-defeating, price wars tend not to last very long.

In the most extreme examples the ‘loosing’ firm declares bankruptcy, has its debts drastically slashed, renegotiates contracts for lower rates, and ends up in a much leaner position better able to compete in a price war. The competitors will eventually have to either declare bankruptcy themselves or give up on the price war as it is truly idiotic to continue a price war against someone operating within bankruptcy protection.

And how long before this new contender shows up hmm? You cannot manufacture a competing business out of thin air nor can you make it appear overnight, no matter how rich you are. A new rival in the makings would have to prepare before it can officially compete, by which then a watchful monopoly would be prepared for it.

The timeframe entirely depends upon the industry – could be anywhere from 3 months to 5 years (heavily skewed towards the former). You can make a lot of noise, such that the market is anticipating your product launch soon, yet never actually get a product on the market with very little cost. Essentially you float the idea to see how the market will react and if you could make a reasonable go of it before investing much money (this is actually incredibly common). . You can also keep fairly quiet about your entry, catching your competitors completely by surprise when you suddenly put the product on the market. Most firms, especially new entrants, like to make lots of noise so they can get investors with minimal effort, but if you have a solid product or strategy it is sometimes preferable to just make a surprise product launch.

If a watchful monopoly is on guard against competitors popping up, then they are effectively behaving as if there was competition already, and thus it is completely irrelevant from a consumer welfare standpoint that there exists a monopoly.

Once again, we are talking purely theoretically as monopolies in free markets do not exist.

Alternatives I can think of are Linux and it's derivatives, Apple, Oracle, and....no one else. Linux cannot really considered to be a competitor despite affecting market share simply because it is free.
There are many companies which produce operating systems (suse/novell, sun micro, apple, red hat, calderra, etc) which mean competition not to mention to plethora of open-source freeware, which completely negates monopoly. How much a product costs is irrelevant as it is still competition (actually it has an impact in that the firm charging money has to provide a significantly better product to justify the price). You seem to be completely missing the whole definition of monopoly – it means that there is no competition. Microsoft has never had a monopoly, nor was it in any danger of achieving said monopoly. Microsoft has always had to compete to maintain its dominant position. Simply because it has been able to maintain that position does not mean that competitors do not exist.

The shareholders certainly do not explicitly demand executives commit criminal acts, but at the same time, they do not explicitly demand that they do make profits above board.

Shareholders remove board members for inappropriate behavior on occasion. They do this because the behavior of the management reflects upon the reputation of the company. The company’s reputation has a big effect on its ability to compete in the market; ergo the shareholders do actually require good behavior. That this does not always happen in no way indicates that most shareholders condone unethical behavior.

There are a couple of companies that do not behave in a manner which I find acceptable, so I simply do not do business with them. This is no different than in your day to day life. If you run into someone at a bar who is a complete asshole do you automatically assume that everyone at every bar is an asshole? I could tell you a couple stories of really bad behavior on the part of a few individuals, but fortunately I am wise enough to attribute that to the individuals in question rather than projecting them on millions of people.

See Bhopal disaster involving Union Carbide. Or Shell refinery fire incident (I forget the name). Both instances were the result of severe corporate negligence in terms of safety inspections and regulations in order to minimize costs. Union Carbide denied negligence on their side while Shell blamed refinery staff, some of whose actions actually prevented the disaster from worsening. Neither company accepted fault for their actions.

Everyone makes choices every single day. Do you decide to wear a padded helmet every time you stand up on the off chance you might fall over and hit your head? Do you constantly wear knee and elbow pads everywhere? How about safety goggles? Then perhaps you are being negligent with your own safety. There is always a tradeoff – people choose as best they can. Not everyone is perfect. Proclaiming anything short of perfect choices with perfect foreknowledge by every single person who works for a corporation is indicative of unethical and criminal behavior is as ludicrous as this exaggeration of your point of view.

Some people do behave unethically. Some people do behave criminally. It is wholly inappropriate for you to paint everyone with that prejudice. It is wrong for someone to claim every black man is a criminal because some black men commit crimes. It is no less wrong for you to claim every businessman is a criminal because some commit crimes. Your opinion that most businessmen are unethical and criminal is highly prejudicial.

I do not know where you live, but one such example, illegal toxic waste dumping by corporations, is a chronic issue here.

You hold that corruption and unethical practices are in the minority. I contend that they are in the majority. Enron only made papers because the scandal was so huge, it became the flagship example.

All executives? Of course not. That would be a gross exaggeration. Most executives is closer to the truth.

Those are issues with the individuals who made the decision to dump the waste. The individuals. The particular people who made that choice.

Obviously Enron got so much press coverage because of its size, but it is more than a little bit of a stretch to assume that there is such fraud inherent in all corporations and that it only doesn’t get reported because it isn't on such a massive scale.

You are entitled to your opinion. Somehow you seem to think it OK to describe most executives and being criminals simply by virtue of what job they have. Do you do the same for people based on other such groupings? How about by race? Gender? Whether or not someone wears glasses? And don’t forget those people who prefer Pepsi to Coke… I met a couple guys who preferred Pepsi and they were jerks so most people who prefers Pepsi must be jerks.

You do not know me, thereby you are not exactly fit to judge who I do, and don't know personally. However, I do know people of the executive level, and what I've seen leaves a bitter taste in my mouth.

Nor do you know me, yet you seem quite sure of yourself when you describe most of my family, friends, and me as unethical criminals.