What prevents monopolies from forming in a free market?

Well, the economy of scale works both ways. Do you know what would happen to a normal non-luxury company if Wal-Mart (the worlds largest single retailer) refused to sell their product? Apparently, they just "get over their heads and can't sustain themselves". Yeah, because you just lost the largest market share in the world instantly.
Ergo, Wal-Mart can begin to say "we want __________ at _____ price, do it, or we'll find other crappy Asian nations that will do it for us."

In addition to this, I watched the Penn and Teller video. Most of it.
It has many glaring errors. (Let me say that I don't hate or love Wal-Mart, I hate the system that allows Wal-Mart to do what it does. You could call it Wal-Mart or crazy fuck happy mart, and it would still happen)
1. Yeah, Wal-Mart may pay an average of over min wage. Key words: average, and "full time". There are (as they admit) literally hundreds of thousands of documented cases of Wal-Mart cheating people out of hours, keeping them on the part-time pay scale indefinitely, and other blatantly illegal tactics to keep the highest cost of operation (wages) low.
2. Wal-Mart benefits third world workers.
Wait, seriously? Yeah, I understand the argument that "well, some job is better than no job", but if you do a serious cost-benefit analysis (since I'm not operating under the retarded idea of having perfect information since no one does) Yeah, you can work for 2.00 a day now, and before you got .50, but this way you're going to get cancer in 10 years, and you could also die in a factory accident that no one cares about. Notice how the prof that they found to agree with this is from "San Jose State University. no offense to anyone who goes there.
3. All you "progressives" are being crazy reactionaries, the change from mom&pop to global economy was inevitable. Not related to the video, but wait a second.
You think that the change was inevitable? It was inevitable that our government would keep interest rates artificially low for years while also cutting capital gains and marginal tax rates to increase the amount of capital even more while spending on top of this? it was inevitable that third world labor would be exploited because of virtually neo-colonial international trade policies? It was inevitable that Wal-Mart would purposefully screw its workers to make a profit?
The change from relatively small to large may have happened either way, but it was not inevitable that we fucked people this hard while doing it. Thats my beef with it.

 

Forming and allowing duopolies prevents monopolies forming.

 

I have two words for you. Drug cartels.

They have a monopoly in what is an entirely free market. You try and compete, you get killed or otherwise completely shut right the fuck outta business. This is certainly and absolutely a monopoly, and there is no government regulation of drug cartels... Besides prohibition obviously, but I can't see that it makes that much of a difference. If anything, it just means that the government obviously doesn't regulate the production and distribution of drugs, meaning that it's MORE of a free market (with no government control) than anything else and is thus the best model to look at when thinking about the free market. And considering that drugs are notoriously controlled by huge cartels with coercive monopolies, it would appear that the free market isn't so self-regulating after all.

Besides, and somewhat away from the topic of coercive monopolies (but also related), I simply CANNOT get behind any philosophy that advocates the total lack of regulation of business. The way I see it is this - who benefits from regulating business practise? The workers benefit, by having standardised pay/working conditions and by having workers rights which the employer must respect. The consumer benefits because the businessman can't rip them off with shitty products, or worse get them addicted to their products by unethical production practises (for a crazy and obviously hypothetical example, putting nicotine in childrens lollies) that are not regulated and thus answerable to anyone. So, regulation (in the forms above, I'm not talking about 'regulation' where the government props up businesses or bars competition from the market - that's not regulation at all, that's fascism) helps and is there for the workers and consumers. A lack of regulation is a ploy that works in the best interests of the businessmen alone, and is a philosophy that gives a great big "Fuck you!" to the workers and the consumers. It gives the businessman power over the everyday people which he, naturally, is going to use to maximise his profits - to exploit the people he relies on for his money. In my opinion, the lack of regulation is a path to the social collapse of equality and the initiation of a dictatorship of the rich businessmen ruling class with the power to do as they please.

 

What you're not mentioning is that this supposed company has already entrenched itself into doing business with WalMart. If they can't remain competitive whether through cutting costs, innovation or strong brand image then they don't deserve to keep WalMart's business.

Can you provide me an example of this happening?

What's your point? Should they do median wage?

Can you provide a source to this hysteria? This is what I found:

Yes, outsourcing benefits third world laborers. Sweatshop conditions are a phase that all industrializing nations must go through. Their standard of living is rising, and then their value of labor will rise and they will no longer work in those conditions.

"Sweatshops" (which are becoming less and less sweaty) more often pay far more than the local average wage. In cases where sweatshops were closed down most of the workers turned to prostitution.

I don't understand the reference to San Jose State University... is the tuition too cheap or something?

I agree, and evidence points towards the state as the culprit of permitting most of the abuse.

 

I was using his logic of a few firms in a market as competition to point out an obvious fallacy.

 

1. Free markets have laws.

2. In a free market they would have legal competition. If you could buy drugs from a store or from an asshole, who would you choose?

 

I'd just like to add that what the pro-capitalists has done is the same thing that the communists have done. They both point out that there has never been a "true" version of their ideology. It's such an awesome arguement because it works.

 

Ok, but you improperly analyzed the nature of the auto industry. There is no competition, a "few manufacturers control the majority of the market" because the state consistently bails those fuckers out.

It's too expensive to enter the auto industry in this country because we have to protect those shitty companies and all the precious jobs that have built up around them.

 

Not really. History is filled with examples of free market successes vs planned market failures. Capitalism has already won.

The people that support socialist economies are morons and the elite. Every great nation starts out capitalist and turns socialist.

I think small communes can work, but large totalitarian super-states will never work. It's stupid to think it would.

 

Laws = government regulation?

And I'd buy from the nice guy, but that doesn't mean there's always going to be a nice guy. If you can only buy from the arsehole, well, you can only buy from the arsehole. I guess it's simple as that? Nice if there's a good dealer, but if there's not/there cannot be then that's that?

 

Taken from wiki:

Regulation refers to price fixing, protectionism, mandates, rationing etc.

Well I'm a nice guy, so I would raise capital and fill that demand. Problem solved.

 

Hmmm... so the government obviously holds a monopoly on law, with the power to enforce their law by force etc. My concern here is that those in government are very likely to have business interests and investments... and thus the cycle begins once more of government involvement in business and the government/businesses exploiting the worker/consumer. Something just doesn't sit right with me about it, you know?

And cheers for being such a hypothetically nice guy and hypothetically selling me drugs man, always hypothetically appreciated

 

That's my concern too, which is why the state that governs best governs least. The US government was originally limited in scope, but we got lost along the way.

If the states had retained sovereignty and the Supreme Court had defended the Constitution we would not be a corporatist nation but a capitalist one.

How do we do this? Jefferson thought a rebellion every 20 years was necessary. I think we should try being a union of sovereign economies again, decentralize the power/corruption.

But you get the idea, right? There's a much higher demand for a nice drug dealer than for a shady one, so some entrepreneur would wisely satisfy it.

I live in a state where the MMJ industry has exploded so I've seen firsthand the effects of legalizing a once criminalized substance. People like drugs, and they like nice people selling them drugs.

 

Agreed, I'm a fan of the nightwatchman state concept too. While I can see how the free market can hypothetically be a good and efficient thing, I'm just not a supporter of the free market as a responsible social solution to providing people with what they need. But like I say, I see where you're coming from and why you support it, and I agree 100% that we need to decentralise power... which, around here, is apparently a frighteningly unpopular concept. 4 in 10 Australians apparently believe in ABOLISHING state governments...

Yeah man, I get the idea, using the opportunity for light hearted lulziness. However, sometimes the nice guy simply isn't going to be available. An example I like is for industries that require a lot to get into or are very specific in their scope, like the refining of mineral sands or the manufacture of elaborate medications. Because they take so much to get involved in, and because the general public is uneducated generally speaking about such a specific industry or product, it means that;

a) There's a shortage of 'nice guy' entrepenuers
b) The few that do know enough to enter the business will likely have nowhere near the right amount of funds to enter the business.
c) If they get a loan, they run an enormous risk, because those with a monopoly by default in the industry have a tremendous advantage over them. Coupled with the fact that they want to run the 'nice guy' out of business, it's a ridiculously hefty risk to take.

But yes, I get what you're saying, in general there's probably going to be SOMEONE who wants to close the profit margin. Yeah, as I say (before I get myself into some huge debate that I am feeling far too crook to want to participate in ), I get where you're coming from and your views - I personally don't hold them and opt for a socialist system of distribution of wealth (at least for the essentials), but I dig your free market beliefs too and hope just as much as you likely do that the government is taken down and put in a much reduced role, some time soon preferably.

 

When you say Wal-Mart has set up a "non-coercive" monopoly... are you saying that Wal-Mart was not helped out by the government? Or are you saying that they weren't doing it on purpose.

The reason I ask is that it's fairly obvious that Wal-Mart had recieved an enormous amount of help from the Government. Without minimum wage laws and public welfare assistance Wal-Mart would not of been able to expand as much as they have since their inception.

 

I dont believe this. Just because parties say they are socialist doesn't mean they are so. The Labour Party in Britain actually widened the wealth gap.

"The gulf between rich and poor has grown wider under Labour than at any time since World War II, according to a devastating report to be published today.
It paints a picture of a country shaped by inequality and an enduring system of class, with the children of the poor destined to live much harder and shorter lives than those of the wealthy.
The 450-page report by the Government's National Equality Panel represents a damning verdict on Labour's 13 years in office and Tony Blair's pledge on poverty in 1996."

I don't care how much you moan that they are socialist because my idea of socialist must be very different from yours.

I do agree with you on the dangers of corporatism. Corporations have penetrated deep into politics. Monsanto, GE, and most major banks either lobby or have former members in some type of office.

I think corporations influence government a lot more than government influences the corporations. When a corporation is given a government-mandated monopoly, it's because of those people influencing the gov't. This isn't socialism, it's corruption at one of it's highest levels.

/rant

 

I'm having a hard time believing that, that's getting more optimistic than most communist ideas.