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3/1/2018 9:23:16 PM
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Economics is theoretical in nature. While you try to sound intellectual you miss the entire purpose of these words. Google definition: Monopoly- the exclusive possession or control of the supply or trade in a commodity or service. This is really the opposite extreme of another theoretical term [i]perfect competition[/i]. Google definition: the situation prevailing in a market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers. Neither of these truly exist in real life but they are vital in accessing prices. If you know basic microeconomics perfect competition sellers make zero profits while monopolists are able to set the price that will maximize their profits. If you estimate the demand and supply for a product you can determine which type of market you are closer to. There’s a lot of very complicated factors that influence how big a difference there is in monopoly vs competitive pricing that varies for every market. So monopolies are not always super bad. Your assumption that monopolies only exist when the government allows them too isn’t true either. Natural monopolies exist based on many things but prime examples are limited resources, intellectual property, and incredibly high market entry costs. The government antitrust department actively prevents it. An easy hypothetical to understand is if all ISPs joined and then raised prices to the profit maximizing price. No one could possible enter the market as the infrastructure is far too difficult and costly to implement especially with the knowledge that the existing monopoly could drop prices dramatically and run the new firm out of business then go back to its higher prices. If you need more research antitrust cases and learn microeconomic modeling. It’s pretty basic and easy to see the implementation of the term monopoly and that economics as a whole doesn’t necessarily describe the market but describes a theoretical one that can help understand our own.
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  • SpiRitsにより編集済み: 3/2/2018 4:16:20 AM
    [quote]Economics is theoretical in nature. While you try to sound intellectual you miss the entire purpose of these words.[/quote] Asserting economics is theoretical doesn't refute the conclusions and logic I put forth. Math is also theoretical based on axiomatic postulates, in which I can make logical deductions. Perhaps I am doing the same here by entertaining the heterodox Austrian school in logical deduction from an axiom. [quote]Your assumption that monopolies only exist when the government allows them too isn’t true either. Natural monopolies exist based on many things but prime examples are limited resources, intellectual property, and incredibly high market entry costs. The government antitrust department actively prevents it.[/quote] You have committed multiple strawmans. My claim merely states that in the free market (as defined above, where the state does not exist), a natural monopoly can not be formed, as there is no state to aggressively use force to exclude others from a production process. When I refer to "natural" I am referring to some spontaneous free market in which somehow a single firm can exclude others from competing with them at the hand of coercion.This is contrary to the free market where all exchange is free from force and coercion in favor of mutually beneficial voluntary exchange. I explained above how you need to drop your prejudice of the status quo when entering this discussion, as appealing to the status quo would be suggesting I am arguing something I simply am not. Yes monopoly can exist today, you suggested the patent. Apparently you didn't read any part of my post because in the expanded description of the free market it clearly says: "It is a system of maximally free trade. Taxes, tariffs, quotas, price restrictions, mandated licensure, labor regulation, and intellectual property never exist in this market. Everyone is free to copy and remix others' work, acquire cheaper materials, and produce a good in any industry." The patent very clearly fits my definition of monopoly, a corporation can use force (the state) to remove others from competition. You suggest natural limited resources, and again on the free market, as I explained: "...the logical dichotomy between “monopoly price” and “competitive price” is a false one. This comparison is nothing more than an illusion. Therefore, from this logical conclusion, because “monopoly price” can not be determined in the free market, ALL prices are competitive." Incredibly high entry costs are still not reflective of the merits through the free market. Aggressive barriers to entry are erected from the state, which are backed by force. Under free competition no such barriers exist, competition is always apparent directly or potentially. [quote]An easy hypothetical to understand is if all ISPs joined and then raised prices to the profit maximizing price. No one could possible enter the market as the infrastructure is far too difficult and costly to implement especially with the knowledge that the existing monopoly could drop prices dramatically and run the new firm out of business then go back to its higher prices.[/quote] Again, you keep appealing to the status quo. I'm not making any arguments referring to the state capitalist system. You haven't directly refuted anything I have stated above, merely filibustered on multiple strawmans. To be very clear here: My position is that some monopoly is a mere myth in the free market, it seems you really didn't read through anything I said, because you mentioned none of it....

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  • You’re argument consists of defining a free market can only exist in a world without government, then defining a monopoly as only existing with government intervention. Then you go on to conclude monopolies can’t exist without government. I mean it’s literally just reading the definitions. You just fancied it up and made it drag on. Even so this conclusion is meaningless because a Monopoly is an economic term that has a set modern definition that differs from the one you chose. The whole premise is flawed. I assert that economics is theoretical because that’s where these terms perfect competition and monopoly exist. I’m sure you’re aware of the basic economic assumptions that clearly distinguishes it from the real world. No text book monopoly or competitive market can exist in any world. Government or not. So if that’s your point, again it’s blatantly obvious and you made it in a very round about way. A natural monopoly doesn’t require anyone to actively prevent others from entering the market, it happens naturally hence the name. Let’s go back to my ISP example. In a world without any government, so no taxes or regulations or anything of all ISPs merged into a single firm, they would be a natural monopoly. No competitor could realistically compete because they couldn’t profitably create a far reaching infrastructure at a competitive price. Even if they could the existing ISP could easily use predatory pricing and run them into the ground. Basic game theory tells us this game will never actually be played because all players know how it will play out. In your OP your water example is wrong. Primarily, a monopoly price is not equivalent to price gouging. A monopoly price maximizes profits according to the demand. A monopoly price would never result in reduced profits. From your example it seems you don’t know what a monopoly price is. Natural monopolies can exist in other ways as well such as limited resources, intellectual property (not patents), or like the ISP example. [quote]"...the logical dichotomy between “monopoly price” and “competitive price” is a false one. This comparison is nothing more than an illusion. [/quote] It’s not, they are theoretical definitions that literally mean basically the opposite things. In reality they are never truely achieved (because they’re theoretical terms) but they are good reference points to evaluate a market.

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  • SpiRitsにより編集済み: 3/4/2018 9:01:18 PM
    [quote]You’re argument consists of defining a free market can only exist in a world without government, then defining a monopoly as only existing with government intervention. Then you go on to conclude monopolies can’t exist without government. I mean it’s literally just reading the definitions. You just fancied it up and made it drag on. Even so this conclusion is meaningless because a Monopoly is an economic term that has a set modern definition that differs from the one you chose. The whole premise is flawed.[/quote] The entire point is that monopoly can not be maintained without force being used exclude other from potentially or directly competing. I'm not "defining myself into correctness", merely pointing out that the free market represents exchange in the absence of force, and such monopoly privilege can not be upheld without force. No one has a monopoly on definitions, even your google definition supports my original refutation of a "single supplier of a goods or service" as it includes the "...exclusive control...". If you are going to appeal to googles definition you are supporting my assertion that the definition "single supplier of a good or service" yields no useful economic information. [quote]I assert that economics is theoretical because that’s where these terms perfect competition and monopoly exist. I’m sure you’re aware of the basic economic assumptions that clearly distinguishes it from the real world. No text book monopoly or competitive market can exist in any world. Government or not. So if that’s your point, again it’s blatantly obvious and you made it in a very round about way.[/quote] Ok, you can claim to dislike my definition of monopoly and then appeal to orthodox and mainstream economics to do so, but you are yet to refute it. You are merely complaining about it. I have already explained this - monopoly exists in the status quo - Intellectual Property, roads and highways, police services, market regulation, fiat currency, fire services, postal services, military and "defense", legislation and law, judicial and court, education, etc. Intellectual property is again monopoly privilege to supply a good while legally being able to use force to exclude other from competing. All public sectors state supplied services are monopolized at the hand of the state. They reside on the monopoly power to provide these services and forcefully use legislation to exclude others from competing, this is monopoly. Without the state and its ultimate monopoly power to use force in the first place, such monopolies couldn't exist. [quote]A natural monopoly doesn’t require anyone to actively prevent others from entering the market, it happens naturally hence the name.[/quote] A natural monopoly in the context I am using it would be through the free market. [quote] Let’s go back to my ISP example. In a world without any government, so no taxes or regulations or anything of all ISPs merged into a single firm, they would be a natural monopoly. No competitor could realistically compete because they couldn’t profitably create a far reaching infrastructure at a competitive price. Even if they could the existing ISP could easily use predatory pricing and run them into the ground. Basic game theory tells us this game will never actually be played because all players know how it will play out.[/quote] Why could no competitor realistically compete? Were talking about a market in which no aggressive forceful barrier of entry could possible exist, you are also assuming in a much more wealthy environment such ISP service would only be acquired through large and expensive infrastructure. If they merged into a single firm, they all the sudden weren't granted access to use force and exclude others and usurp entry barriers. I have already debunked your further reasoning also. Predatory pricing is a gain for the consumer as they are enjoying large discounts. Like in my water example, if a firm tried to raise prices due to some mythical "monopoly privilege", it would be an exercise in futility as this firm would lose such a good reputation and consumers would rather do business elsewhere without the threat of pricing be raised randomly even if they must pay marginally higher costs. In freed markets reputation is crucial to the success of every firm in every industry. Reputational damages caused through exploitation of the consumer would run this firm into the ground and destroy future business prospects, as this firm can not use force to exclude competitors. You also assume that this merger would somehow result in the firm gaining mass "power" in the market. I've already described why this isn't true. "“A cartel is a group of individual firms in like-industries which decide to coordinate their practices as a means to maximize profits. These coordinating efforts can take the form of setting production quotas or “fixing” prices.” Just from this description we can see how absurd a practice is to keep prices above market equilibrium. Such practices is surely to be temporary under free competition. The hardest part of cartelizing is actually having entrepreneurial businessmen come together and decide on fixed prices and production. Entrepreneurs by their nature are efficient, and that is directly contrary to restriction in production. The second an efficient oriented member of cartel can break from such fixed production, he will do so. Even those remaining in the cartel will be tempted to lower prices from the fixed ones, or increase production to gain a larger market share. Even considering the scenario a cartel can successfully set fixed prices and production and remain so, outside competition can merely undercut and take customers." "There are also multiple benefits from cartels and merger in the market. The obvious benefit is an economic concept known as economies of scale. This idea that greater production through more efficient capital goods produces greater productive output. We see this when purchases are made in bulk, as this yields lower prices. The larger a firm, the more capital goods it acquires, greater division of labor, lower overhead costs, cheaper credit, etc… Access to greater amounts of capital, mergers can afford greater investment and expand resource capacity. With greater production from new and improved capital goods, employees can yield greater production with the same amount of resources driving up wages and lowering prices." [quote]In your OP your water example is wrong. Primarily, a monopoly price is not equivalent to price gouging. A monopoly price maximizes profits according to the demand. A monopoly price would never result in reduced profits. From your example it seems you don’t know what a monopoly price is.[/quote] When did I ever claim in would result in reduced profits? I said reductions in income. You literally have't directly quoted and refuted anything from my water supply example. My example was set up to entertain the worst case scenario under free competition: That a company raises their prices without increases to overhead costs. I have already explained how monopoly price is not definable under free competition. Like I said, a company price gouging would be met with the might of the consumer through social and economic ostracism. So unless the firm is actively using force to exclude other from competing with him (only possible with a state) then your claim that consumers would just go back to doing business with the firm because of predatory pricing is fundamentally incorrect. You seem to be missing the point. [b]There is no such thing as monopoly price under the condition of liberty and the free market.[/b] [quote]Natural monopolies can exist in other ways as well such as limited resources, intellectual property (not patents), or like the ISP example.[/quote] [quote]It’s not, they are theoretical definitions that literally mean basically the opposite things. In reality they are never truely achieved (because they’re theoretical terms) but they are good reference points to evaluate a market.[/quote] This does't refute my point. It supports it if anything. Claiming such definitions are theoretical would further my conclusion that the dichotomy is false, and since monopoly price cant be determined under free completion, all prices are competitive.

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  • Tosevite 187により編集済み: 3/2/2018 5:27:39 AM
    Responded to wrong post

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  • Again: "...the logical dichotomy between “monopoly price” and “competitive price” is a false one. This comparison is nothing more than an illusion. Therefore, from this logical conclusion, because “monopoly price” can not be determined in the free market, ALL prices on the free market are competitive." I defined monopoly, and from that deduced how monopoly price is achieved. If you have an issue with the premise or deduction please actually point it out and refute it, because you are yet to do so.

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