You realize the anti-trust is to create competition don't you?
Before when AT&T monopolized the telephone system in USA there was no competition b/c barrier to entry is too great. The break up of Bell is what allowed competition
Right, and what I say is that microsoft did not get kicked out because of it.
But Bell, is an interesting case because it appears to be unchallenged natural monopoly.
We can believe that Bell got a natural monopoly, permitted by the network effect.
They gained monopoly because people went to AT&T because more people were connected to the network as opposed to later competition as the story goes. And it makes sense.
One objection I would have is : How is it possible that Facebook killed MySpace ? Why MSN Messenger died ? these are example of product that benefited of network effect and thus natural monopoly... for a while.
One point we can have, is that the entry cost in the software industry is marginal, so it lowers barrier of entry.
Also the cost of change is not the same as switching proprietary phone network was. Point taken.
So now, I'll argue why I don't think it is a natural monopoly. And that state exclusively helped Bell to develop at the beginning.
The complete argument can be found here
http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/1994/11/cj14n2-6.pdf1876—94 : Bell develops unchallenged, protected with patent.
One question at this point is to ask whether patents are a good idea at all. One move to prevent monopoly that can benefit from network effect is to not recognize intellectual property at all.
1894—1913 : This period see the rise of competition, with price reduction, and ROI felt from 46% to 8%. "It seems competition helped to expand the market, bring down costs, and lower prices to consumers".
One question here is why this had come to a end ? economy of scale did not prevented competition of entering on this period, as the fairy tale tell us.
1913—21 : "Kingsbury Commitment", AT&T acquired competitors, as well as Western Union. Anti-trust law kicked in, asking to sell 30% of western union, stop buying competitor, and allow competitor interconnection.
However, AT&T could buy system from independant competitor, as long as it sold an equal number.
There was finally a small number of competitor each geographically restricted by the phone system they bought... so there was no competition after all, but several, local monopolies.
Then here is the regulators kicking in. Regulators thought wise to remove waste.
"There is nothing to be gained by local competition in the telephone business"
"Competition resulted in duplication of investment.... The policy of the state was to eliminate this by eliminating as far as possible, duplication."
"Many state regulatory agencies began refusing requests by telephone companies to construct new lines in areas already served by another carrier and continued to encourage monopoly swapping and consolidation in the name of “efficient service” (Lavey 1987: 184—85)"
Anti Trust is here to break 1 big guy to 5 other big guy, but they want to kill the small fish and erects walls around the big fish.
I will not copy paste everything, then came nationalization of AT&T, with the result of regulatory control of long distance Rates, which was above natural rate "to provide a subsidy to rural area", which killed competition in zone not covered by AT&T, not able to match the subsidy.
At the end, "universal service" vision of Vails, A&AT president, were in place thanks to the action of federal and state regulators.
It was not a natural monopoly far from it.
I would be very surprised if you pointed me at least one example of hungry homeless child using Coursera or Udacity!
I am not talking about the dying children, but for the lower income class.
The slums stay like that because we are forbidden to give them wealth by trading their labor against money.
Milton Friedman pointed out that we never had immigration policy until minimum welfare services.
This is not a coincidence. Immigration was seen good as long as they brought labor, but once you can't use them as such, it becomes a liability.
Most African and Asian countries have minimum wages set far below fair price of labor or don't have such laws at all. Nevertheless, these countries are much poorer than ones with such laws.
Give me more specific information so I can know what you are talking about exactly.
Anyway, our laws were erected only once we were already richer. Not before. Wealth is to be made before confiscated.
Then you, libertarians, blame prisons for wasting tax money and urge to abolish imprisonment altogether!
Libertarians are not anarchist. The state has to protect property rights.
However, sending to prison someone that sold Cannabis ? This is a waste of money because no property rights were violated.
And also, those prison would not be so crowded if people in crappy district were legally permitted to trade their labor against money.
Lets imagine you live in ultra-libertarian country that doesn't support raising children at all. On its border there are socialist country that acts opposite. After few generations in former country you will see massive population drop combined with lack of young people, so nearby socialist country will have great incentive to simply wipe out your state having army larger by 2..5..10x!
Send me 100 people with anything but bows, and I will send you a tank.
You can't produce as efficiently as in a capitalist country. At this point, war is not about number but about technology.
Anyway, if the capitalist country lacks labor, its door are open to buy it from outside. There is nothing to protect anyway. (No welfare)
As Friedman said, Immigration was a blessing before welfare services.
Scandinavian countries are not purely socialist, but rather close to this term in areas of child support and education. And contrary to your opinion, in most ratings these countries took top positions.
What is doing Scandinavian country for education ?
The state of private schools, as public, are for the most part disastrous in France, but I know Finland and Sweden are among the best.
