How can Anarchocapitalism break monopolies?

Ringsixty

Ringsixty

Well-Known Member
The Constitution only guarantees the American People the right to pursue happiness.

YOU HAVE TO CATCH IT YOURSELF.

- Benjamin Franklin
 
deprave

deprave

New Member
abandonconflict said:
For if monopolies can exist in anarchocapitalism, you do not have anarchy, you have feudalism.
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I am not an economist or good with money at all, I am a computer programmer but its really not that complicated. I will explain it the best I can in "lamen" financial terms which I understand that these theories argue.

The argument for monopolies in "anarcho-capitilism" (Market Anarchy and variations) AND free market philosophies is in short: Government is a cohesive violent force that fosters monopolies. A government is exactly just that, A Monopoly on power unaccountable for its actions.

In bits:

A) A real monopoly can only be created through the use of violent force!
B) A Monopoly is something that "corners" the market, in a free market someone can simply offer a better price, so its to expensive to corner the market and then Raise Prices!
C) The State is necessary in order for any corporation to have a monopoly. In the absence of the State, anyone could compete against anyone by utilizing their own resources as they saw fit.
D) When you raise the price your overall profit goes down because the demand doesn't change, people just buy less or seek alternatives.
E) As you raise the price the opportunity for others to come in and make profit increases, your competition grows, you lose market share.
F) You simply can't undercut the competition forever.
G) Even if you have a monopoly at 100% strength (100% of everyone in that market is all working together in a conspiracy to corner the market and raise prices). Even if they can circumvent 100% of all alternatives to the product. One of the companies in the evil conspiracy will be tempted to lower the price in the same greed that brought them to the conspiracy and rake in money quick out of greed, possibly even secretively under the table, thus crashing the whole conspiracy because consumers refuse to pay the over the table price. Suddenly the whole monopoly crashes and destroys itself.

Long winded summary from the first hit on google:
Let us suppose that you are a “monopolist.” Suppose that you are the CEO of a widget producing corporation. You currently have 100% of the market share for widgets. Now ask yourself, why isn’t anyone competing against you?

Now ask yourself, what would happen to your market share if you decided to raise your price! Isn’t that the whole point of a monopoly? To be able to cut production and raise the price of your goods by reducing supply?
Let’s say I’m a venture capitalist. My whole job is to scan the market looking for opportunities to invest other people’s capital in highly profitable business ventures. I happen to notice that you have cut back your widget production in order to drive up the price of widgets. I notice that there is a huge profit margin in widget production. What do you think I’m going to do with my clients’ capital? Isn’t it reasonable to assume that if you are not meeting the market demand for widgets, that someone like myself will come along and start a firm to compete against you?
What would my competition cause you to do? Let’s say that my start up firm is tiny and only produces a tenth of the widgets that you produce – what would eventually happen if you did not lower your price by maximizing your production? Clearly my start up firm would get bigger and bigger until it over-took your firm’s market share. If you don’t want to lose market share, you have no choice but to maximize your production even if there are currently no other competitors in the market! Because you know that if you don’t, someone like myself will come along and compete against you.
Let’s look at why people produce things in a free market. Generally, people produce things in order to satisfy two basic types of human needs: good feelings and solutions to problems. If something does not satisfy either one of those two needs, it is highly unlikely that it will be worth anything to anyone in the open market. Is it possible for ONE firm to meet all of humanity’s needs for a specific problem? Is it possible for ONE firm to meet all of humanity’s needs for good feelings? When put into this context, it should become clear that a monopoly by one firm in a free market is impossible.
It may be that there is only one firm producing goods to meet a specific market need, but that does not mean that firm meets the definition of a monopoly. Remember, a monopoly must be able to cut production in order to raise the price of their goods without losing market share to competitors. Clearly as soon as any firm starts cutting back its productive capacity intentionally, they will face new competitors who will move to meet the market’s needs.
A real monopoly can only be created through the use of violent force! Let me give you some examples of a real monopoly:

1. US currency – there is a market need for money, but no one is allowed to create their own money which can be used for the payment of taxes. US taxes must be paid in dollars, and the courts will always discharge debts that are paid in US dollars. Businesses do not have a choice about accepting dollars as payment of debts. These restrictions on currency production are enforced at gun point.
2. US First Class Mail – there is a market need for letter mail delivery. In the United States, it is illegal for anyone to compete against the US Post Office in first class letter mail delivery. The US Post Office has a legal monopoly on first class mail delivery. If anyone tried to start up a company to compete against the Post Office, armed men would raid their business and shut them down. The US Post Office can charge whatever it likes for first class delivery, and the people have no choice but to pay what the Post Office demands if they want first class letter delivery.
3. iPhone production – there is a market demand for iPhones. Apple holds a patent on iPhone production. If anyone tried to copy Apple’s iPhone and sell it, armed men would raid their business establishment and shut them down. Even if they called it something else, it doesn’t matter. Apple has a monopoly privilege on the production of iPhones that has been granted to them by the State. Of course, people could chose to buy a different brand of phone, but clearly if people want an iPhone, they must buy it specifically from Apple. No competition is allowed in the production of iPhones.
Consider that if I use my own factory and my own resources to produce an iPhone replica, I have not stolen any property from Apple at all. Apple hasn’t lost a single transistor to theft. Ask yourself why the State should prevent me from using my own property to create a replica iPhone? Are consumers of iPhones helped or harmed by the State’s actions? Clearly they are harmed because this means there are less iPhones available and their prices will be higher.
What you should take away from my examples is that the State is necessary in order for any corporation to have a monopoly. Violent force or threats of force must be leveled against people in order to prevent them from competing in the open market. In the absence of the State, anyone could compete against anyone by utilizing their own resources as they saw fit. Private security can only protect physical property owned by individuals, they can not go out running around looting people simply because they are copying each other’s ideas. If they did, they would have to face the private security of those whom they wished to shut down.

In a real free market, if Apple wanted to protect itself from iPhone competitors, they would simply have to keep the technical details of iPhone production a secret. If I wanted to replicate Apple’s phone, I would have to first discover how it is produced. Today, all I have to do is look up the patents they have filed with the State in order to discover how an iPhone is built. Patents not only grant monopoly privilege, but they also destroy trade secrets.
For a more thorough explanation of why free markets prevent monopolies, listen to these lectures by professional economist Thomas DiLorenzo
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This is a good perspective, a 25 minute video if you want more info on Free Market Vs Monopolies from Anarcho Capitalist perspective:
[video=youtube;LQms0-jSYqM]https://www.youtube.com/watch?v=LQms0-jSYqM[/video]
 
abandonconflict

abandonconflict

Well-Known Member
Thanks Deprave, I appreciate you taking the time to answer, despite that I have berated you brutally several times. I agree with the copy paste in theory actually, it is similar to other sources I have read. I have actually read quite a bit about economics in the last year. Not only theory such as Paul and Krugman but historical examples, in the US the only coercive monopolies which really apply to this discussion are Standard Oil and Microsoft. I added a nonbiased view of the Standard Oil monopoly in post #3.

The reason I brought it up, indeed was to take a shot at "free-market libertarianism" in favor of libertarian socialism. I find the examples tend to run contrary to the theories. I fond several assumptions in the theories which do not seem so in the historical examples. The assumption that a monopoly cannot be achieved without help from the state, being one of the most obvious. However, the example I posed brings a more alarming concern.

The theories of anarchocapitalism (lets face it, it hasn't been tried before) do not mention private ownership of the means of production of either finite resources or necessities. This is very telling. Particularly in the case of oil and rare earths, the nearest mention is simply of "private ownership" as if to once again instill the fear that if you're not an anarchocapitalist, your a socialist. This is in my opinion a blatant deception, I'm not asking you to share your home or your toothbrush. I'm arguing that the workers should collectively own the means of production which they operate, such as an oil deposit, as opposed to it being inherited by their boss's bratty kid. This in my opinion, was the intended purpose of tradable stock.

As for necessities, while food would seem obviously impossible to monopolize, one only needs to look at how NAFTA put all Mexican corn farmers out of business in favor of an increasingly centralized corn industry in the US, admittedly, one subsidized by the US taxpayer. This statist controlled collectivism is just as coercive in my opinion.

Last but certainly not least, the assumption that immediately raising price would be the goal for establishing a monopoly. In practice, the opposite is true, when one can undercut all competition, they will be the only supplier. In fact, in the case of Standard Oil, prices were reduced, even at cost to the corporation, just to maintain the monopoly. They were recouped later, demand allowing and this was done to prevent competitors from gaining hold of market share, effectively keeping the industry closed to new competition. We have all heard how fabulously wealthy the Rockefellers are, but it all started with Standard oil.

I'm sure this topic won't be touched by too many others if they can't make a partisan jab, but please do, and bring your thinking bong, some of us can actually be swayed by a cogent argument.
 
deprave

deprave

New Member
Standard Oil, a very good example of one of the strongest monopolies in history, they were only involved in kerosene a product which had limited demand especially soon with the advance of gasoline vehicles, To maintain the monopoly they went great lengths to appease the consumers and stomp out competition offering incredibly low prices at times, I don't believe that they took advantage of the consumer, as cited in the article they controlled ~80% of the market which is indeed massive but it is not 100%, further they violated rules set by firms, depending on others to achieve this (the rail roads), required a "trust" which I mentioned in free market theory are doomed for failure for several reasons in my last response. Additionally they took advantage of (jumping throught state hurdles when violating ohio laws and also the black market when bribing railroads). Again even controlling 100% in a truly free market is doomed for failure as is controlling 80% historically time and time again - You mention this is something that has never happened before or some kind of fantasy thats simply not true, this has repeated itself over and over. "Monopolies" Fail every hour.


Microsoft...Don't Even get me started...I am a Linux developer..everything runs Linux now...Phones, Televisions, Rollitup.org... I can go on about Open Source. Microsoft monopoly did not fail because of anti-trust.

btw I also consider myself left-libertarian although I understand market anarchy slash voluntarism and think they are good philosophies which are very easy to argue for. Although I don't consider myself a socialist.
 
deprave

deprave

New Member
[h=3]
Further, there are indications that by the time they were brought to trial, Standard's dominance in the industry was already beginning to lessen. This coincides with Greenspan's formulation. Standard became a dominant company, increased efficiency and augmented profits. However, the entrance of competition after the expansion of the market would have been inevitable. Standard Oil did not hold an unbreakable, coercive monopoly upon the oil industry; it had maintained temporary dominance due to the efficiency with which it operated and its ability to satisfy consumers. Moreover, the entrance of new competition into the oil industry was not the result of the efforts of antitrust legislation, but the product of an increasing demand and thus an expanding market.
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For further information on the case of Standard Oil, I'll refer you to an excellent article written by Lawrence W. Reed, which may be found here .[/h]
 
deprave

deprave

New Member
Theres nothing wrong with Chomskism(aka socialist Libertarianism) slash Mutualism idea of shared business, I see that as a business model more so than a political theory, and that can be very good and work out very well in the free market. It doesn't make any sense to involve the state in that.
 
abandonconflict

abandonconflict

Well-Known Member
deprave said:
Theres nothing wrong with Chomskism(aka socialist Libertarianism) slash Mutualism idea of shared business, I see that as a business model more so than a political theory, and that can be very good and work out very well in the free market. It doesn't make any sense to involve the state in that.
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without private armies...
 
mccumcumber

mccumcumber

Well-Known Member
I have a hotel on boardwalk and park place. Anarchists destroy the hotel on park place. My monopoly is destroyed :(.
 
canndo

canndo

Well-Known Member
abandonconflict said:
No I said a free market hasn't happened.
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there is no free market, there will never be a free market and this is not because of government. Corporations do not what, nor have they ever wanted a free market and they will do anything in order to prevent such an environment.
 
cannabineer

cannabineer

Ursus marijanus
canndo said:
there is no free market, there will never be a free market and this is not because of government. Corporations do not what, nor have they ever wanted a free market and they will do anything in order to prevent such an environment.
Click to expand...
Corporations are the ultimate vehicles of self-interest. The model here never was Marx but Macchiavelli. The corporation's prime principle, "accrue advantage", is in structural conflict with the highest principle of government, "be just to all".
So it astonishes me that we have posters here who genuinely believe in utterly free markets, a codeword for plutocracy, as a force for good. cn
 
canndo

canndo

Well-Known Member
cannabineer said:
Corporations are the ultimate vehicles of self-interest. The model here never was Marx but Macchiavelli. The corporation's prime principle, "accrue advantage", is in structural conflict with the highest principle of government, "be just to all".
So it astonishes me that we have posters here who genuinely believe in utterly free markets, a codeword for plutocracy, as a force for good. cn
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I can add nothing to this.
 
Rob Roy

Rob Roy

Well-Known Member
One of the biggest monopolies? Hmmm, let's see U-N-I-T-E-D S-T-A-T-E-S they're a big monopoly aren't they?
 
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