Philosophy Now Forum

Dalek Prime wrote: ↑Tue Jul 24, 2018 3:23 amDepends on the type. There are vertical and horizontal monopolies. And then there are oligopolies, with few competitors making deals so they don't have to compete with one another, but sit back and enjoy the money flow.

What businesses do this?

Sir-Sister-of-Suck wrote: ↑Tue Jul 24, 2018 9:18 pm

Dalek Prime wrote: ↑Tue Jul 24, 2018 3:23 amDepends on the type. There are vertical and horizontal monopolies. And then there are oligopolies, with few competitors making deals so they don't have to compete with one another, but sit back and enjoy the money flow.

What businesses do this?

Opec does that. It is a description of price cartel behaviour in general, for which a google search of "price cartel examples" will give you a list of others who do it as well. For an example of a vertical monpoly, the classic one is the Carnegie Steel Company. More recent examples can be found by looking for absolutely any internet company which is also described as a 'platform' because that is the point of platforms in this context.

If you are genuinely having difficulty thinking of free market resultant monopolies (uhm, google it... or bing I suppose if you are that one guy) the best known example would be Standard Oil and Bell (AT&T). Neither of those can be accurately described as resulting from government intervention.

Recent examples aren't as strong, because those two in particular changed the way anti-competitive practises are regulated now, and no company is likely to acquire the same degree of rent-seeking monopolistic power. They will usually be prevented from buying competitors sufficient to gain enough market dominance in the first place (Nasdaq and the NYSE for instance). If they acquire excessive power anyway, they face massive fines for market abuses such as bundling services (see Google's recent fine from the EU for instance). In extreme circumstances they can be forced to sell off entire business units (See the recent sale of TSB bank in Britain for an example). But competition is still regularly limited by business factors. Network effects will always create natural monpolies such eBay for instance.

ISPs and telecoms firms naturally form oligopolies without government intervention by the way. this is because it's practically impossible to have more than 3 companies serving any particular market because the investment cycles don't permit 4th entry... The first company to spend billions rolling out a new service such as 4G wireless gets all the early adopter customers. They run up a huge debt doing this, but they make extra returns by selling at a high price while there is no direct competitor. The next company in the market waits a while until kit prices are down, and all the contractors have finished installing the other company's networks. They run up a smaller debt, they get lots of customers, and make their returns at a lower pricepoint. In some cases, the addressable market is big enough for a third company to now join in. It's best not to put too much money into this player, they have almost as much debt to service at the end of the install as remains on the other two companies' books, but they have fewer customers so they need lower margins to win business. The 4th company in this game will shelve their plans because nobody wants to lend them the dough. The game starts again when the next tech comes along. If one of the 3 incumbents overspent, they have a debt hangover and can't play the next round.

There are lots of examples where government regulation has aided the market in creating strict monopolies in telecoms, but those aren't in the developed world. Best example is America Movil of Mexico whose owner Carlos Slim was considered the richest man in the world for a couple of years. The Mexican state sort of liked the idea of a monopoly telco owned locally instead of by the French and Spanish once upon a time. They therefore allowed excessive consolidation, as well as creating weird but politically expedient laws to prevent phone companies owning TV stations and vice versa. that dude became the richest man in the world because he was allowed to make excessive profits this way.

Then again, if you look at the way Berkshire Hathaway has funded its operations over the years, that only make sense if there is a certain degree of similar rent-seeking in the US insurance industry. Which is well known to be the case. So, actually everyone who has in recent years been that 'richest guy in the world' has done so with the benefits of some hint of monpolistic excess returns.



But there's a broader point than all of that. Some monpolies are exploitable. You can corner a given market and then cut R&D and live off the rents generated (as Microsoft did for a long time with Internet Explorer). But many monpolies are not exploitable that way in the long term. Capitalists famously take note of other capitalists excessive returns on capital (which is what rent-seeking is) and look for away to get their share of that pie... As Google did when they funded Firefox to break IE's monopoly, and then kind of took over the whole market themselves with Chrome.

A really good example of a shit monpoly that cannot be exploited is the Chinese grip on Rare Earth production. They once attempted to jack up export prices, and all that happened was competition they didn't think they would face, so they gave up and dropped the prices again. Processing Rare Earths is shit work, it creates all sorts of nasty pollution problems. The Chinese basically cornered the market in producing something nobody else wants to make, and still weren't in a position to make monopoly returns.

Sir-Sister-of-Suck wrote: ↑Tue Jul 24, 2018 9:18 pm

Dalek Prime wrote: ↑Tue Jul 24, 2018 3:23 amDepends on the type. There are vertical and horizontal monopolies. And then there are oligopolies, with few competitors making deals so they don't have to compete with one another, but sit back and enjoy the money flow.

What businesses do this?

Rogers, Bell and Telus in Canada, for a start. Add Shaw minus Telus, if we're talking broadcast distributors.

Sorry for the late reply.

FlashDangerpants wrote: ↑Wed Jul 25, 2018 12:43 amOpec does that. It is a description of price cartel behaviour in general, for which a google search of "price cartel examples" will give you a list of others who do it as well.

If there are multiple big oligopolies, they are still generally encouraged to compete with each other, though, so I was just confused as to what Dalek Prime had in mind. Prime made it sound as if these companies are like colluding in order to gouge prices.

For an example of a vertical monpoly, the classic one is the Carnegie Steel Company.

Why are you telling me this? Was this in response to something I said? Frankly, your post is a tad bit confusing because you seem to be replying to a whole bunch of stuff that I've said without providing quotes. I can tell what most of your post is aimed at, but I would have appreciated some more context.

If you are genuinely having difficulty thinking of free market resultant monopolies(uhm, google it... or bing I suppose if you are that one guy) the best known example would be Standard Oil and Bell (AT&T). Neither of those can be accurately described as resulting from government intervention.

I just wanted to stress the importance of not buying into this common misconception of where monopolies are typically born, because the first ones the average person thinks about are almost certainly not going to be. Standard Oil did come to mind, but I think there's actually a greater debate about that. The supreme court had the perception that it was leaning to become a monopoly, but it never actually owned the entire market share of its industry. Similarly, Microsoft and AOL were often considered to have a monopoly in the late 90s-early 2000s, but I'm not sure how strong that basis is considering there were other options to Windows OS and AOL, as well. I see that you go on to mention Ebay, so maybe you could explain why people would consider these services which in fact have other options as having a monopoly.

Is it because, despite the fact that there are other auction sites like craigslist, atomic mall, or bonanza, Ebay doesn't directly compete with them?

ISPs and telecoms firms naturally form oligopolies without government intervention by the way.

That maybe so, but they don't naturally form monopolies to specific regions. The right-of-access to cities these US ISPs have to negotiate for from that city is an expensive process that doesn't guarantee approval. It's not to say this is just an issue for new companies that may not have an initial investment to be able do it, but it's an issue of profitability for other companies that want to move in.

There are a whole spew of other issues that local governments bring to the table, and there's the license you need to work as a wireless ISP, in general. I think all these things contribute to the reason why the US is specifically worse for internet access than a few other leading nations. I wouldn't be surprised if it was far less consistent in speeds across all regions.

Sir-Sister-of-Suck wrote: ↑Tue Jul 24, 2018 9:05 pm

gaffo wrote: ↑Tue Jul 24, 2018 3:02 amyour Libertarian

I'm actually not, but your attempt to boil my statements down to a mere partisan disagreement is dishonest, when you clearly have no idea what you're talking about and make no substantive argument to the contrary. What you quoted is not something something disputable by party lines, it is necessarily true that actual competition cannot lead to a monopoly; Take a second to think about that. Like I said, you can think an open market gives way to no competition, and the frequency of that is something we can debate.

I welcome open discussion.

you arguments in this thread seems "libertain".

my appoligies to you from one to another if my conculsions were wrong.

I apologize, and welcome discussion/clarification on your view on the matter.

Sir-Sister-of-Suck wrote: ↑Tue Jul 24, 2018 9:05 pm

to me the view "free market will provide all" - is bullshit.

without needed regulation by gov, all "Free markets" end up as monopolies.

I never even said that, in fact I basically told you that it won't

ok, i missconstruded(sp).

Sir-Sister-of-Suck wrote: ↑Tue Jul 24, 2018 9:05 pm

FIJA, Helicom96

I have no idea what either of those things are, gaffo.

FIJA - fully informed Jury.right to conscience - igorning law if law is unjust as a juror to reject the law in the case one is involved with in a trial --
- vote ones conscience - apart of guilty per the law in question per the trial the juror is involved with.


Hellicon Act = Telicom act of 1996...............Clinton's/congresses "legalisalization" of a few to own most/all radio stations/newspapers/Tv stations....................

i.e. ownership of a few (clear channel/Sinclair/etc,,,,,,,,,,,,,,) of the media the masses have access to.

thus deminisioning Democracy......toward Oligarchy.