Defending Capitalism

[NghtRppr]

From: http://www.nathanielbranden.com/catalog/articles_essays/question_of_monopolies.html

The question is often asked: What if a large, rich company kept buying out its smaller competitors or kept forcing them out of business by means of undercutting prices and selling at a loss—would it not be able to gain control of a given field and then start charging high prices and be free to stagnate with no fear of competition? The answer is: No, it would not be able to do it. If a company assumed heavy losses in order to drive out competitors then began to charge high prices to regain what it had lost, this would serve as an incentive for new competitors to enter the field and take advantage of the high profitability, without any losses to recoup. The new competitors would force prices down to the market level. The large company would have either to abandon its attempt to establish monopoly prices—or else go bankrupt fighting off the competitors its own polices would attract.

It is a matter of historical fact that no “price war” has ever succeeded in establishing a monopoly or in maintaining prices above the market level, outside the law of supply and demand. (“Price wars” have, however, acted as spurs to the economic efficiency of competing companies—and have thereby resulted in enormous benefits to the public, in terms of better products at lower prices.)

In other words, it will never happen.

[­­­Atlas_]

The closest thing to such a monopoly was Standard Oil but even that was affected by state laws preventing the formation of national companies. In addition, it gave us the lowest oil prices ever. So, it was a natural and quite healthy monopoly.

[MoonShadow]

Then why doesn't Microsoft charge $10,000 or $100,000 for their operating system? If they truly have the market cornered then they could do that and they would do that. Obviously, they don't. The fact is, if they were to start charging absorbent prices people would switch to Apple or Linux. Just because everyone likes a certain brand at a certain price doesn't mean they have a monopoly. A monopoly implies you can charge whatever you like and people will pay it. Even though Microsoft dominates the desktop market the mere threat of competition is enough to keep them in line. They want to keep their dominant position and part of doing that is not charging ridiculous prices. You really need to read more about economics since it's clear that you're just regurgitating misinformation.

You have a very narrow definition of monopoly. Microsoft is a de-facto monopoly (or natural monopoly) on the desktop. Please note that there's nothing wrong with that. If you provide a service or product that is far superior to everything else out there and everyone buys it, you have a monopoly. How do you keep such a monopoly? By charging a little less than the "pain threshold" of switching to something else.

Charging what the market will bear (before customers switch) is not the hallmark of a monopoly.  In a true monopoly, customers cannot switch.  Once upon a time, this may have been practically true with Microsoft, but it was a temporary monopoly permitted only because of copyright laws.  It's obviously no longer true regardless.

[JA37]

From: http://www.nathanielbranden.com/catalog/articles_essays/question_of_monopolies.html

The question is often asked: What if a large, rich company kept buying out its smaller competitors or kept forcing them out of business by means of undercutting prices and selling at a loss—would it not be able to gain control of a given field and then start charging high prices and be free to stagnate with no fear of competition? The answer is: No, it would not be able to do it. If a company assumed heavy losses in order to drive out competitors then began to charge high prices to regain what it had lost, this would serve as an incentive for new competitors to enter the field and take advantage of the high profitability, without any losses to recoup. The new competitors would force prices down to the market level. The large company would have either to abandon its attempt to establish monopoly prices—or else go bankrupt fighting off the competitors its own polices would attract.

It is a matter of historical fact that no “price war” has ever succeeded in establishing a monopoly or in maintaining prices above the market level, outside the law of supply and demand. (“Price wars” have, however, acted as spurs to the economic efficiency of competing companies—and have thereby resulted in enormous benefits to the public, in terms of better products at lower prices.)

In other words, it will never happen.

Who said anything about selling at a loss? I was talking about reducing profit to make sure that you can't get your investment back. With economic of scale I should be able to undercut you and still sell at a profit, unless I'm utterly incompetent. You assume that anyone with a monopoly will charge unreasonably much. They won't unless they're morons. They will charge just below what incentivices others from entering the market.

I agree with you if the barriers of entry are low. Then it's not possible to undercut and create/maintain a monopoly.

[JA37]

Charging what the market will bear (before customers switch) is not the hallmark of a monopoly.  In a true monopoly, customers cannot switch.  Once upon a time, this may have been practically true with Microsoft, but it was a temporary monopoly permitted only because of copyright laws.  It's obviously no longer true regardless.

That's a very narrow definition of a monopoly. If there's only one player in a given market, that player has a monopoly. Also if there's no real competition even if there are other players, that would also be concidered a monopoly. Like Microsofts dominance in the desktop market.

Please explain how it was only possible through copyright laws. I don't quite understand that.

[NghtRppr]

They will charge just below what incentivices others from entering the market.

Then obviously that's not an abusive monopoly since the only way to do that will be to charge the going rate of return which is between 5% and 10%. Also, you keep talking about economies of scale as if that doesn't apply to anyone else. It's just as easy for someone to get investors to raise the funds to do the same thing. Can you give me an example where that's impossible? You're going so far off the deep end that even if you are right, which hasn't been demonstrated yet, that it would at most apply to one or two markets which are likely to have substitutes. Oh no, someone has cornered the grape soda market! I guess I'll just drink orange soda. That's hardly something worthy of immoral practices such as taxation, coercive laws, etc.

If there's only one player in a given market, that player has a monopoly.

So what? A small town may have only one drug store but unless they're charging $100 per aspirin then who cares? If they do that then it will make sense to open a second drug store. You keep switching back and forth between monopolies (who cares?) and abusive monopolies (can't exist in a free market) just like you keep switching between violence (again, violence self-defense is fine) and aggression (not cool). Please stick to the real issues. I'm glad you can read a dictionary but a single seller is not necessarily a problem.

[BCEmporium]

Violence/Aggression... everybody speaks of it as if it was something defined "per se".
Pearl Harbor, a few days before US froze Japan's funds, so was it a Japanese aggression or self-defending?
Like anything else it just depends on which side of the barricade you're. In the "right side" you're a "Freedom Fighter self-defending", in the "wrong side", you're an "Aggressive Terrorist".
Reason why anarchy doesn't go; we need some sort of "objective morality", Religion used to do that job in the past, but was doing quite a lousy job, so now we've Governments for such job.

[NghtRppr]

Reason why anarchy doesn't go; we need some sort of "objective morality", Religion used to do that job in the past, but was doing quite a lousy job, so now we've Governments for such job.

Your way of thinking scares me.

[BCEmporium]

Reason why anarchy doesn't go; we need some sort of "objective morality", Religion used to do that job in the past, but was doing quite a lousy job, so now we've Governments for such job.

Your way of thinking scares me.

I'm pragmatic and realist. Just that.
I'll not go dream on a place where everyone is "peaceful" because there's no such place and never will. People is greedy and will follow that greed no matter what. Twisted logics, manipulation, violence, everything is out there and will remain.
And looking at the World today and looking at the World back on the 90's, when you could experience a much better society and freedom than today, I may say it is getting worse. Now every shit is a business, then you got every shit full of insane rules because "it's a business"... fucking World! Governments have some guilt, but so do we. Confucius said «A gentleman blames himself while a common man blames others»; that's what we mostly are... "Common man".

[NghtRppr]

I'll not go dream on a place where everyone is "peaceful" because there's no such place and never will.

I don't expect everyone to be peaceful, just most people. If most people aren't peaceful then we're all fucked no matter what ideology we cling to.

[BCEmporium]

I'll not go dream on a place where everyone is "peaceful" because there's no such place and never will.

I don't expect everyone to be peaceful just most people. If most people aren't peaceful then we're all fucked no matter what ideology we cling to.

And aren't we? By day, specially since 9/11, you see Fascism moving from the Government sphere to the mentality sphere. People is getting fascist by the day, afraid of everything and up to give away their freedom out of fear of poltergeist attacks. Ghosts implanted on the mind of people preventing them from living!
We'd never been further of your dream society.

[MoonShadow]

I'll not go dream on a place where everyone is "peaceful" because there's no such place and never will.

I don't expect everyone to be peaceful just most people. If most people aren't peaceful then we're all fucked no matter what ideology we cling to.

And aren't we? By day, specially since 9/11, you see Fascism moving from the Government sphere to the mentality sphere. People is getting fascist by the day, afraid of everything and up to give away their freedom out of fear of poltergeist attacks. Ghosts implanted on the mind of people preventing them from living!
We'd never been further of your dream society.

I think that might be just your perspectives.  I don't see real people becoming more fascist, just government and media.

[BCEmporium]

If people wouldn't be becoming more fascist, they would be rioting by now... yet they don't. They started to accept to trade their will for "security" and all that governments have to do is to put up a terrorist attack now an then.
Also many people is more and more convinced to be eternal, put death to a bigger tragedy than what it already is.
"You can't smoke near me because that kills me"... does it? So does many things else, yet if you keep running away of everything that may kill you at long term you don't live at all and in the end will die anyway.

It's a utter truth to our kind; «who controls the fear of death, controls humanity».

[Anonymous]

I'll not go dream on a place where everyone is "peaceful" because there's no such place and never will.

I don't expect everyone to be peaceful just most people. If most people aren't peaceful then we're all fucked no matter what ideology we cling to.

And aren't we? By day, specially since 9/11, you see Fascism moving from the Government sphere to the mentality sphere. People is getting fascist by the day, afraid of everything and up to give away their freedom out of fear of poltergeist attacks. Ghosts implanted on the mind of people preventing them from living!
We'd never been further of your dream society.

That is true.

Notice that googles eric schmidt is touted as the next commerce secretary?

If thats not fascism i dont know what is....

[MoonShadow]

If people wouldn't be becoming more fascist, they would be rioting by now... yet they don't.

Nonsense.  Do libertarians riot?  No, socialists do; and fascists are socialists.

[MoonShadow]

I'll not go dream on a place where everyone is "peaceful" because there's no such place and never will.

I don't expect everyone to be peaceful just most people. If most people aren't peaceful then we're all fucked no matter what ideology we cling to.

And aren't we? By day, specially since 9/11, you see Fascism moving from the Government sphere to the mentality sphere. People is getting fascist by the day, afraid of everything and up to give away their freedom out of fear of poltergeist attacks. Ghosts implanted on the mind of people preventing them from living!
We'd never been further of your dream society.

That is true.

Notice that googles eric schmidt is touted as the next commerce secretary?

If thats not fascism i dont know what is....

Fascism is single party political control over a heavily regulated marketplace. 

Okay, you're right, the US is now fascist.

[benjamindees]

poltergeist attacks

SPECTRE

[BCEmporium]

Fascism is when the "Government" take the "State" as the main entity in the society, being so the "State" can then interfere on all issues of individuals, be their private or not. This extents obviously to markets.
Within Fascism is legit to regulate or forbid even masturbation if the "State" decides so (say the State needs more natality), as the individual has no rights or his rights get void when colliding with the "State" for any reason. The "State" is the primarily thing to defend, no matter what that may cost to individuals or how many have to be wiped out.

This is what means Mussolini's words, and the best yet to define fascism: «All in the State, all with the State, nothing outside the State, nothing against the State».

[JA37]

Then obviously that's not an abusive monopoly since the only way to do that will be to charge the going rate of return which is between 5% and 10%. Also, you keep talking about economies of scale as if that doesn't apply to anyone else. It's just as easy for someone to get investors to raise the funds to do the same thing. Can you give me an example where that's impossible? You're going so far off the deep end that even if you are right, which hasn't been demonstrated yet, that it would at most apply to one or two markets which are likely to have substitutes. Oh no, someone has cornered the grape soda market! I guess I'll just drink orange soda. That's hardly something worthy of immoral practices such as taxation, coercive laws, etc.

So what? A small town may have only one drug store but unless they're charging $100 per aspirin then who cares? If they do that then it will make sense to open a second drug store. You keep switching back and forth between monopolies (who cares?) and abusive monopolies (can't exist in a free market) just like you keep switching between violence (again, violence self-defense is fine) and aggression (not cool). Please stick to the real issues. I'm glad you can read a dictionary but a single seller is not necessarily a problem.

How about gas prices? Technically an oligopoly but still. Concidering the profits they make they're overcharging, but there's no competition.

And what happened to this question about our gated community?

It's private property. Everyone who lives there own an equal share and we set the rules by 2/3 majority vote. We decided that everyone +18 with income should pay. Could you refuse, after all you're just born there. You didn't sign anything. Is it an act of agression to toss you out. You're saying no? Correct? Can we keep some of your stuff as payment for services already provided that you decided not to pay for? Is that agresson?
Even more fun, let's say you get a share just by being born there, and the rules say we can't take that share away form you by force, so we can't throw you out unless you give up that share of your own free will. How can we get you to pay the fee? Can we lock you up until you agree to the rules, and pay? Is that agression?

[benjamindees]

And what happened to this question about our gated community?

Who put you in this hypothetical gated community?  Who is responsible?  The property owner?

If someone puts a kid in your backyard, are you obligated to let it stay there?