A History of US Economic Law Part 6: MONOPOLY!!!
The Climate
Post Civil War America created the perfect conditions for the development of massive corporations and the emergence of a few men as the captains of industry or the more derogatory term robber barons. This is due to a variety of factors- labor became extremely cheap with a multitude of former slaves now faced with the unenviable position of having to provide for themselves and their families with no education, facing extreme racism and absolutely no significant personal property. Many of them headed north in hopes of getting jobs in factories or west in hopes of getting jobs building railroads and were willing to work far cheaper than whites. Add in large populations of Chinese were immigrating in due to economic problems in China and soldiers returning from war looking for new work and you have the ingredients of a depressed labor market.
Another key factor was the railroads which had expanded dramatically to assist the war efforts of both sides leaving a new, faster and cheaper form of transportation throughout most of the east and was ready to expand west. Taking advantage of the cheap labor railroads quickly expanded, both privately and through government projects making it possible to exploit the natural resources in large areas of the midwest and eventually the rockies that were previously too far away to be useful. Areas that once took months to reach by wagon were could now be reached in days. Led by the railroads, virtually every industry experienced a boom; especially agriculture, steel, coal and oil.
Federal regulations were virtually non-existent, taxes were low except for tariffs and state regulations were easily gotten around through the law or by simply bribing politicians. As JP Morgan famously said, "Well, I don't know as I want a lawyer to tell me what I cannot do. I hire him to tell how to do what I want to do." A group of men became extraordinarily wealthy by running their businesses aggressively, doing everything they could to not only make their own business more profitable but also to run their competitors out of business. Having more money than they could possibly spend in their lifetimes, these men used capital as chips in a giant game where money was merely a method of keeping score. These men would often socialize, throwing extravagant parties, making backroom deals creating friendships, rivalries and feuds.
Meanwhile, workers unions were on the rise as an opposing force. The corporations ran by the wealthy were obsessed with being efficient and labor being the largest expense was an area they were constantly looking to keep under control. The combination of workers/unions pushing for higher wages and better working conditions against the pressure of the corporations attempting to keep their costs below the costs of the competitors produced a constant friction between employers and employees as well as racial tensions against minorities who were often not allowed in unions and willing to work cheaper.
By the 1900's most of the American economy was in the hands of few men who were regularly successful at running their competitors out of business. The political climate was developing a strong populist movement. Progressive and communist ideas were becoming popular among the intellectual elites and the ideas were attractive to a large portion of the population. Even the average American who didn't care for leftist ideals had little sympathy for the extremely wealthy. Theodore Roosevelt was a young charismatic president who was a progressive but shied away from the more extreme communist ideas. Rather than attacking business in general he sought a middle ground of reigning in big business with regulation.
The Panic of 1901
On May 17th 1901 the New York Stock Exchange experienced a large financial battle for control of the Northern Pacific Railway resulting in the first crash in the history of the NYSE now called the Panic of 1901 E.H. Harriman attempted to monopolize the Chicago rail market by purchasing control of the Northern Pacific Railway. The market was cornered by James Stillman and William Rockefeller using Standard Oil money and James J. Hill, financed by J.P. Morgan attempted to prevent the takeover.
Initially the battle over the Northern Pacific led to a massive increase in the stock price which the stock market in general followed. Small investors, believing the stock market was booming rushed to buy. In the afternoon, the buying spree turned around and prices began to fall. Realizing they had overpaid for the stocks they had bought in the morning a panic hit the trading floor and stock prices collapsed.
A newspaper article from the following day describes the beginning of the panic.
Of a sudden, Burlington stock, which had been more or less heavy all the morning, began to show unmistakable signs of weakness, while almost coincidently the Erie issues were depressed. The rank and file watched and wondered, and as they watched, the prices of the issues went lower still. Then in the general list, prices also began to fall. First it was St. Paul, then it was Missouri Pacific, and then it was Union Pacific. Finally the whole market was declining. Some holders of stocks not knowing the why and the wherefore of it and thinking it only one of the many ordinary reactions that have from time to time appeared in the market since election, "sat" on their stocks and looked for a recovery. Other holders, more timid if might be more conservative, of even less able to hold proceeded, however, to part with their holdings. Soon the contagion spread, the professional bears on the floor of the Exchange the while aiding in this by hammering the whole list.
Quotations thereupon began to break, not quarter or half points between sales, but one and two points. That settled it. The entire Street proceeded to sell. Where before the cry had been only. "Buy, buy, buy," it became, "Sell, sell, sell." Stocks were literally tumbled out sold without rhyme or without reason-anything "to get out."
At the end of the day, E.H. Harriman failed to gain a sole monopoly on the Chicago region, however a deal was struck between Harriman, Hill and Morgan that created the Northern Securities Company, a holding company that held majority stock in the Northern Pacific, the Great Northern and the Burlington effectively owning a monopoly on Chicago are rails.
Trustbusting
I discussed the Sherman Act in my first blog on this topic, but up to this point in history it had been used sparingly. The largest Supreme Court Case at the time United States v. E.C. Knight Co. 156 U.S. 1 (1896) ruled against the government so Harriman, Hill and Morgan thought nothing of the legal consequences of forming their monopoly. President Roosevelt ordered his justice department to file a lawsuit against the Northern Securities Company- a move that reportedly surprised Morgan who wrote the Roosevelt,
If we have done anything wrong, send your man to my man and we can fix it up.
To which Roosevelt replied,
That can not be done. Nobody treats as a sovereign equal to -- of the President. No company can presume to be -- no private interest can presume to be equal to the government. The government must be superior to all of these.
To prevent antitrust cases from becoming bogged down in legal proceedings, Roosevelt pushed the Expediting Act through congress. The Expediting Act moved any lawsuit filed under the Sherman Act to the front of the legal line, allowing for them to be ruled on quicker and eventually reach the Supreme Court faster as well as added staff to the antitrust division of the justice department.
The Expediting Act is one of those rare government laws that performs exactly as advertised. The case against Northern Securities Company was decided by the Supreme Court in March of 1904 only two years after the initial prosecution. In Northern Securities Company v. United States 193 U.S. 197 (1904) the Court found that the NSC was violating the Sherman Act and ordered it broken into separate companies. An emboldened Roosevelt filed cases against 40 other companies, 25 of which were eventually broken up. Taft and Wilson followed Roosevelt's lead and filed even more antitrust cases.
Was It Necessary?
I have been doing my best to keep my opinions out of these blogs, but I feel that here I need to say something. The theory behind breaking up monopolies is that monopolies use their size to prevent anyone from entering the market. They are so large that they can afford to sell at a loss and provide products so cheaply that their competitors go bankrupt or are forced to sell out and merge with the monopoly. Once the competitor is gone, the theory states that the monopoly raises its prices and screws the consumer leading to lower quality and high prices. This is probably what you were told by your Keynesian economics teacher in high school as absolute gospel. But is it true?
Andrew Carnegie argued that the concentration of wealth was temporary, the result of a series of events that led to a group of men exploiting previously unknown technologies. Being the first to provide the benefits of those technologies to the general public is extremely profitable, but once others can copy the technologies and mimic the techniques the distribution of wealth is broadened out to a wider number of people. In other words, monopolies are temporary.
The principal complaint against our industrial conditions of to-day is that they cause great wealth to flow into the hands of the few. Well, of the very few, indeed, is this true. It was formerly so, as I have explained, immediately after the new inventions had changed the conditions of the world. To-day it is not true. Wealth is being more and more distributed among the many. The amount of the combined profits of labour and capital which goes to labour was never so great as to-day, the amount going to capital never so small. ...
You may be sure, gentlemen, that the question of the distribution of wealth is settling itself rapidly under present conditions, and settling itself in the right direction. The few rich are getting poorer, and the toiling masses are getting richer. Nevertheless, a few exceptional men may yet make fortunes, but these will be more moderate than in the past. This may not be quite as fortunate for the masses of the people as is now believed, because great accumulations of wealth in the hands of one enterprising man who still toils on are sometimes most productive of all the forms of wealth. Take the richest man the world ever saw, who died in New York some years ago. What was found in his case? That, with the exception of a small percentage used for daily expenses, his entire fortune and all its surplus earnings were invested in enterprises which developed the railway system of our country, which gives to the people the cheapest transportation known. Whether the millionaire wishes it or not, he cannot evade the law which under present conditions, compels him to use his millions for the good of the people. All that he gets during the few years of his life is that he may live in a finer house, surround himself with finer furniture, and works of art which may be added…. But truly the modern millionaire is generally a man of very simple tastes and even miserly habits. He spends little upon himself, and is the toiling bee laying up the honey in the industrial hive, which all the inmates of that hive, the community in general, will certainly enjoy.
http://www.archive.org/stream/empireofbusiness00carnuoft#page/n9/mode/2up
So were these large trusts fixtures that would be able to maintain their power and grow in perpetuity or a product of a particular moment in time destined to decline over time as the men who created them disappear?
I think it is a fairly straight forward question to answer, many trusts were broken up, but many were not. The courts were divided in how to apply antitrust law and whether or not a particular trust would be busted was a coin flip. So lets look at the trusts that were not broken up- did they become large monopolies that gouged the consumer? Were they able to maintain their dominance by destroying their competition?
The first trust to survive a court challenge was the American Sugar Refining Company, which in 1907 after changing it name to Domino had an astonishing 98% of the sugar refining capacity in the US. Another suit was brought against it, but by 1921 the suit was dropped when Domino disclosed that they only had about 25% of the market share. I credit this large decline mostly because American Sugar attempted to control the price like anti-monopolists fear. It did try to raise prices because of its market dominance. When smaller companies appeared and started selling sugar cheaper it attempted to buy them up which was about as effective as trying to remove fruit flies from your house by killing them one at a time while leaving rotting fruit on the table. Currently, the largest US sugar producer is United States Sugar Corp which only produces 8% of the sugar in the US. Meanwhile, the remnants of the great American Sugar Refining Company sold in 2001 to Florida Crystals for a mere $180 million considering that it was founded with a $50 million investment had over $90 million in capital during its hay day, it really went downhill.
US Steel also survived their lawsuit. At its founding in 1901 it held over two thirds of the market share 10 years later it held only 50%. 100 years in the future, US Steel produces little more steel than it did at its founding. While still the largest steel company in the US by a hair it is hardly dominant and isn't even in the top ten list of world producers anymore. Perhaps the best description of US Steel is stagnation. It was gigantic at its time, but a combination of conservative policies and an inability to adapt to a changing market has led it to slowly lose its grip on the steel industry.
http://old.post-gazette.com/businessnews/20010225ussteel2.asp
International Harvester won their anti-trust lawsuit- it was a company that held a near monopoly on farm equipment in the 20's. Today it is no longer in business, its bits and pieces were bought up by a variety of corporations while the "little" companies they were accused of abusing you probably recognize a lot better; John Deere and Ford Motor Company.
Kodak at one point held 96% of the photography market faced several antitrust cases over the years which it settled by making concessions. In 1921 it agreed to not sell film under any brand other than its own. In 1954 it had a secret process for developing their Kodacolor film, to avoid a lawsuit it agreed to license the process to third parties. Despite these concessions Kodak maintained its market dominance well into the 70's having over 90% of the market in both camera and film sales. Yet even Kodak's 100 years of dominance eventually fell to the wayside. Struggling in the 90's with adapting to the rapidly changing market Kodak remains a major player in photography but can hardly be considered a monopoly.
My point is that monopolies in a free market are not permanent. A company can only maintain its monopoly by providing consumers with better and/or cheaper products than anyone else can offer. The lack of any significant competitor at the moment does not mean that a company can relax, start charging more, lower the quality etc. Smaller companies always exist and will always have access to funding the moment there is an opportunity to fill in a gap left by the larger company. If the large company raises prices, the smaller company will charge less, if the larger company lowers quality the smaller company will offer a higher quality product. A large company can only maintain its dominance as long as it continues to produce newer, better and cheaper products faster than anyone else can. Since large companies tend to become bureaucratic, especially when the founder dies or ceases taking a direct interest in running the company they tend to stagnate. When they do there are plenty of entrepreneurs out there who will do better than them and build a company that will eventually take the throne. Worrying about how wealthy Google, Facebook, Walmart, Microsoft or Apple are today is absurd. It is unlikely that they will maintain their dominance. Already Microsoft has seen a huge decline, and Walmart has been struggling. The dominant companies of today are unlikely to be the dominant companies 50 years from now- none of them existed 50 years ago (well July 2nd Walmart will be official 50 years old). They might still exist, they might still be large but most likely newer more innovative companies will begin the process of pushing them out of the market place.
Antitrust laws protect us from a threat that simply isn't real. A monopoly that exists without the assistance of government coercion doesn't have the chance to fix prices or cut quality. As long as it is legal for another company to be founded to compete it is irrelevant whether that company currently exists. As soon as the behemoth has a weak point someone will aim for it because doing so is extremely profitable. The danger of monopolies is when they are backed up by violence, whether that be the violence of governmental police force or the violence of quasi-governing organizations like the Mafia. A company that maintains its monopoly through peaceful means by offering better products and/or better prices is not a threat, and is in fact a great benefit to us all. Instead of worrying about anti-trust lawsuits our governments time and money would have been better spent preventing the growth of the Mafia, government corruption and the gangsters that used violence to control commerce in many localities. The gangster who says "If you compete with me I'll kill you" is a threat, the robber baron saying "if you compete with me I'll charge less to the customer than you ever could" is not.
If, if a white man puts his arm around me voluntarily, that's brotherhood. But if you - if you hold a gun on him and make him embrace me and pretend to be friendly or brotherly toward me, then that's not brotherhood, that's hypocrisy.- Malcolm X
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Thank you professor, and for
Thank you professor, and for someone who rightfully blasts the existence of "robber barons" you need to get a fucking clue yourself and stop blaming the middle class and working poor for the economic squeeze they did not create.
Less government can only depend on introspection and since I see none at that point from people like you and your bullshit utopia that less government can work MISSES THE POINT that it cannot under our current conditions of selfishness which you suffer from. Less government now would be throwing gas on the fire and creating that robber baron society neither of us should ever want.
If the gap continues to grow like it has it will only serve to hurt both you and me, you are just to fucking stupid to realize it.
YOU KEEP GETTING STUCK ON STUPID SIMPLE SOLUTIONS AND PROJECT YOUR OWN FUCKING DESIRES ON THE REST OF A COMPLEX SOCIETY
What will always happen when the gap gets too big and you have more hungry people in that society you will end up with a situation of unrest. What caused the American Revolution was the same fucking thing that caused the rise of Stalin. Too many people feeling a squeeze. And all squeezes are caused, by money monopolies. China's communist party would NOT have a grip if it had no money, so it can force people into line. The King of England had a money monopoly too, but fortunately at the time of him trying to keep us in place, it was not enough.
But it will fall like any society if enough people don't have food on the table, so most people in china stay in line because right now, the money of the Communist party is too big and there are, right now, enough of their population who have food on the table to be placated with.
You stupidly think CAPITALISM is a form of government, IT IS NOT, it simply means to make money and Gadaffi was a billionaire and owned stock in GE so do not give me this fucking bullshit that wealth is the only thing that matters.
Less government can only depend on those in the private sector not abusing the system anymore than we would want a political monopoly. But RIGHT NOW the motif of "less government" WILL NOT WORK.
AND AGAIN MR PROFESSOR if higher taxes and bigger government is so fucking bad all the time, we wouldn't have the Hoover dam or our modern highway system. THAT TOOK higher taxes, and the private sector back then did not stop existing so do not give me any shit. The difference between the private sector after WW2 and your loony childish idea that you have nothing in common with Republicans, no YOU ARE SIMPLY A REPUBLICAN ON STEROIDS.
The difference between the private sector back then and idiots like you today is that THEY CARED you dont.
"We are a nation of Christians and Muslims, Jews and Hindus -- and nonbelievers."Obama
Check out my poetry here on Rational Responders Like my poetry thread on Facebook under Brian James Rational Poet, @Brianrrs37 on Twitter and my blog at www.brianjamesrationalpoet.blog
Quote:Antitrust laws protect
Don't shit on the First Amendment and then lie to me and tell me you are not. WHAT THE FUCK IS THE FIRST AMENDMENT IF NOT A BAN ON MONOPOLIES? THE FIRST AMENDMENT IS AN ANTI TRUST LAW JACKASS!
GO SERIOUSLY FUCK YOURSELF, I am glad you had no hand in writing the Constitution.
What you want is separate rules for you and the "peasants" like me. But unfortunately for you I vote, so get the fuck over yourself, WEALTH IS NEEDED but it is NOT the only thing in life and there will never be a utopia where having a huge pay gap and exploding pay gap make things sustainable.
So start caring, get others at the top to start caring that way the more they give directly the less selfish they are the less dependency on government. POOF you get what you want and so do I, but only a fool thinks a robber baron society wont happen with the current greed at the top.
"We are a nation of Christians and Muslims, Jews and Hindus -- and nonbelievers."Obama
Check out my poetry here on Rational Responders Like my poetry thread on Facebook under Brian James Rational Poet, @Brianrrs37 on Twitter and my blog at www.brianjamesrationalpoet.blog
Brian37 wrote: AND AGAIN MR
But the government today takes in far more money and doesn't do much of these type projects anymore. Back then they made people work if they wanted money from government, today just their vote is all the politicians require.
How many technologies that increase food production were created via capitalism vs. government created?
Taxation is the price we pay for failing to build a civilized society. The higher the tax level, the greater the failure. A centrally planned totalitarian state represents a complete defeat for the civilized world, while a totally voluntary society represents its ultimate success. --Mark Skousen
Beyond Saving wrote:My point
I think what you need to distinguish between are monopolies based upon a technical or personnel advantage and those monopolies based upon ownership of a natural resource.
If an automobile company is dominant and making large profits, other capitalists could start another company, lure the workers away with higher salaries sell cars at a lower price and still make a profit. But if one company buys up all the iron ore mines and refuses to sell any, they do have a permanent monopoly and can charge whatever price they please. Only government could correct this situation, not the free market.
This is in part why I'm against private ownership over natural resources. It is an unfair advantage the rich and corporations use to keep out competition.
Taxation is the price we pay for failing to build a civilized society. The higher the tax level, the greater the failure. A centrally planned totalitarian state represents a complete defeat for the civilized world, while a totally voluntary society represents its ultimate success. --Mark Skousen
EXC wrote:Brian37
Why does it have more money? Because the monopoly of money over it! Once again, your well intended notion of less government is fucked by a monopoly and only one monopoly is causing it MONEY! To claim otherwise is fucking absurd.
You pontificate about cutting out the middle man but have no problem begging it for every dime you can get and for what? FEAR! The stupid fear that we want to rob you.
Bigger government vs less government is what politicians want us to fucking buy because the money that buys them keeps us divided. If you want me out of your wallet by force of voting booth, then don't fucking use that same voting booth to protect your own fucking narcissism.
People like you are great at "I did it all myself", and are too stupid to see that in reality that is never the case. I am fine with the IDEA of less government, but not under our current conditions.
Seriously, do you think if Stalin had no money and was dirt poor like me, he would have gotten to be the abusive monster he became? Agendas of any kind take like minds, and monopolies arise when narcissism is the focus and money is the only thing that can fuel it.
SO DO ME A FUCKING FAVOR AND STOP CALLING CAPITALISM A FORM OF GOVERNMENT! Capitalism is merely making money, it has nothing to do with the morality of those who do it.
"We are a nation of Christians and Muslims, Jews and Hindus -- and nonbelievers."Obama
Check out my poetry here on Rational Responders Like my poetry thread on Facebook under Brian James Rational Poet, @Brianrrs37 on Twitter and my blog at www.brianjamesrationalpoet.blog
Quote:This is in part why
Please don't give me a sympathy fuck here. You do know that Cuba does that, not just with fuel but even with food. I am not prepared to give up the private sector to the degree of Cuba.
This is what you don't get and Beyond does not get. I am HAPPY for anyone who makes it to the point where they don't have to struggle. But I am not happy with the narcissism that if you get to that point, most who do get to that point forget that most people DON'T and the people the people who do make it depend upon the most are the majority who if lucky manage to pay their bills.
If we are going to outlaw private ownership of natural resources then food is a resource and for all the great burger joints and slop houses and Pancake houses that exist, would fuck most business owners.
Which is why I have constantly said, it is and never will be about wealth, but attitude. It will never be for me anti business, but self introspection in getting there. How one gets to a position of power is far more important to me than inequity. If they can keep things in perspective I will never be against "GO FOR IT".
People are not things and cannot nor should ever be treated as numbers. Gaining resources is natural, but so is abuse in our species and money is the easiest way to forget how drunk on power our history has produced.
I know and rightfully so you hate Castro, and so do I. But he is only in power because of the money his party takes in.
"We are a nation of Christians and Muslims, Jews and Hindus -- and nonbelievers."Obama
Check out my poetry here on Rational Responders Like my poetry thread on Facebook under Brian James Rational Poet, @Brianrrs37 on Twitter and my blog at www.brianjamesrationalpoet.blog
Brian37 wrote:Please don't
No. Cuba has a political monopoly. So the natural resources are owned by Castro and his cronies. It's Castro brothers Inc. The public has no say in how they are used.
http://www.ascecuba.org/publications/proceedings/volume15/pdfs/werlau.pdf
A main reason why the states are going broke is because we have monopolies in teaching, police and firefighting: Unions. Scott Walker is breaking up the teacher's monopoly in Wisconsin, so why isn't he a hero?
But it is inevitable what you get when there are too many.
Taxation is the price we pay for failing to build a civilized society. The higher the tax level, the greater the failure. A centrally planned totalitarian state represents a complete defeat for the civilized world, while a totally voluntary society represents its ultimate success. --Mark Skousen
EXC wrote:Beyond Saving
True but the paradox you pose only holds if one person (or one company) could own every iron ore mine on the planet and iron ore was the only material needed to produce automobiles, neither of which is in any real danger of happening during our lifetimes. The problem you pose might have theoretical value, but as a practical matter you might as well worry about a random joe shmoe breathing all the oxygen. No company owns every ore mine nor does any company have any chance of owning every ore mine anytime in to forseeable future.
If, if a white man puts his arm around me voluntarily, that's brotherhood. But if you - if you hold a gun on him and make him embrace me and pretend to be friendly or brotherly toward me, then that's not brotherhood, that's hypocrisy.- Malcolm X
Brian37
The First Amendment is a protection of free speech and the freedom to practice religion and the freedom from a state established religion. If the public at large all accepts a particular religion or a particular speech it does not punish the popular religion/speech simply because 90%+ people support it. I fail to see how the first amendment has any relevance whatsoever to the topic I posted. To portray the first amendment as an antitrust law either displays complete ignorance of what an anti trust law is or a complete ignorance of the first amendment. And for the record, I have absolutely zero problem with the "robber barons" I think they were amazing men and our country would be far better off with more people like them. The robber barons were men you should be thanking because without them your life would not be nearly as comfortable.
If, if a white man puts his arm around me voluntarily, that's brotherhood. But if you - if you hold a gun on him and make him embrace me and pretend to be friendly or brotherly toward me, then that's not brotherhood, that's hypocrisy.- Malcolm X
Beyond Saving wrote: True
But the price importing iron ore from overseas is prohibitively high as would using alternative materials. Such an mining company would be able to make obscene profits without fear of a competitor. Miners have no other place to take their services so they have no negociating power.
The US government had to get involved in the production of rare earth metals because China Inc. had cornered the market. Apparently the free market was not correcting the problem on it's own.
The world has a similar problem with oil. Opec has created a monopoly and there is nothing one government can do to stop them.
The problem is when you allow ownership of natural resources is that the owners will collude and use scarcity to make huge profits without any work or contribution to the economy. The value of a natural resource is dependant on it's scarcity, not labor or investment. It is a welfare entitlement for the wealthy class. I don't understand why so many conservatives support it because they otherwise decry wealth with work.
Taxation is the price we pay for failing to build a civilized society. The higher the tax level, the greater the failure. A centrally planned totalitarian state represents a complete defeat for the civilized world, while a totally voluntary society represents its ultimate success. --Mark Skousen
EXC wrote:But the price
Is there a company that owns all the iron ore mines in the US? No, there are dozens of them. You have a big "what if" that isn't going to happen, hardly a good reason to change the whole basis of our economy.
I don't know how you imagine that a government takeover of our domestic resources would have any effect whatsoever on the realities of international trade and the fact that resources are not distributed evenly around the world. China would still have a wealth of rare metals and OPEC would still have a lot of oil and they will continue to rule their economies using government power. The only thing you can do with international trade is to develop your domestic resources, something our government has been actively limiting, negotiate favorable trade deals and in the most extreme go to war. No matter how we organize our economy that reality isn't going to change.
If, if a white man puts his arm around me voluntarily, that's brotherhood. But if you - if you hold a gun on him and make him embrace me and pretend to be friendly or brotherly toward me, then that's not brotherhood, that's hypocrisy.- Malcolm X
I'd say Microsoft has well
I'd say Microsoft has well proven the evils of monopolies not based on natural resources. All the tactics suggested to be alleged dangers of a monopoly are tactics Microsoft has used to keep a monopoly.
Fortunately, at least some governments are willing to take them down a billion notches.
Enlightened Atheist, Gaming God.
Vastet wrote:I'd say
But the way Microsoft behaved led to the devlopment of Linux, the reemergence of Apple, web based computing, etc... By the time the case against them was litigated they were no longer a monopoly. Only the lawyers got richer. Same thing was true of IBM in the 60s. Technology moves way faster than the courts.
Taxation is the price we pay for failing to build a civilized society. The higher the tax level, the greater the failure. A centrally planned totalitarian state represents a complete defeat for the civilized world, while a totally voluntary society represents its ultimate success. --Mark Skousen
Microsoft still has a
Microsoft still has a monopoly. Only the tech savvy use anything but Windows. Almost every computer sold comes with Windows installed. Even Macs now. Almost every corporation uses Windows. Almost every consumer uses Windows. The only part of the Windows pie which has actually been lost to competitors is IE.
Thinking there isn't still a monopoly is deluded.
Enlightened Atheist, Gaming God.
Let's not forget the ones
Let's not forget the ones who own the infrastructure. How are start-ups supposed to compete when the basic infrastructure needed for an industry (eg. telecom) is owned by a monopoly (or a few)?
Neetish wrote:Let's not
Start ups can't because the government has laws making it illegal. You can't build a power plant or install telephone lines without government approval which in most areas go to a single company, sometimes two. This is an example of a coercive monopoly, ie they use government law to ensure the continuation of the monopoly. The industry would probably tend to have a small number of competitors anyway because of the extraordinarily high cost of building the infrastructure and the length of time it takes to get a net profit discourages investment if a company is already providing the product at a reasonable cost. When extensive regulations and a crazy expensive, time consuming permit process is added on with permits being denied more often than not, only large experienced companies are likely to even try.
When the railroads were built there were both public and private railroads and the private railroads remained numerous and able to compete with the public ones despite millions in government subsidies going to the politically connected. But in the early 1900's the government took on a much larger infrastructure role and basically blocked competition in the power and telecom industries than it did during the railroad boom leading to virtually every project being government supported either directly through subsidies or indirectly through promises of monopolization.
The airline, radio and network television industries have similar obstacles that are both natural and government created that make it difficult to create a startup. Technology has found ways to create competition for radio and television and we can see the benefits in the much larger variety of radio and tv shows compared to what we had twenty years ago. Airlines will probably forever be limited due to the realities of the necessity to control airspace both from a security standpoint and the safety standpoint.
If, if a white man puts his arm around me voluntarily, that's brotherhood. But if you - if you hold a gun on him and make him embrace me and pretend to be friendly or brotherly toward me, then that's not brotherhood, that's hypocrisy.- Malcolm X