r/Libertarian • u/OkPreparation710 • 5d ago
How Do Libertarians Deal With Monopiles Question
In wake of the Presidential Election, I have been reading and learning more about alternative ideologies. Libertarianism - particularly Minarchy - has stood out the most to me, but I cannot fathom how monopiles are dealt with. I understand that some people say that if the market is free with no regulations, then there can only ever be a monopoly by having such a good product, but what is there to stop business owners bribing smaller businesses to sell their business to them. For example, if Company A is the largest company in a sector. Then you have many smaller companies. What is stopping the owner of Company A from bribing the owners of all the smaller companies to sell their companies to Company A? Company A could then acquire all the competitors in the market, and hence a monopoly is created.
Sorry if this is naïve, but I just cannot wrap my head around it.
Thanks!
Edit: I just realised I spelt monopolies as monopiles, but I cannot change the title
Edit 2: Thank you for your help everyone, I understand now and the example of Thames Water in London has definitely reinforced the rest of your comments about monopolies being propped up by the Government most of the time
176
u/iggybdawg 5d ago
No government bail outs when "too big to fail" companies are crumbling under their own weight, or suffering consequences from their poor business choices.
69
u/Dollar_Bills 5d ago
Banking monopolies, airline monopolies, would have taken care of themselves. Pharma without government money and protections would have to compete.
11
u/ItsWorfingTime 5d ago
So the top voted libertarian answer is "We don't unless they fail"?
36
u/marfalump minarchist 5d ago edited 5d ago
They DO fail if you don’t give them tax breaks and subsidies and grants and special treatment. And, if they don’t fail, it means they are providing a service people need, at a proper price.
Big companies don’t last forever. Sears was once America’s biggest retailer. Now they are bankrupt.
Here’s a list of some of companies listed on the DOW in the 1930s…
- Victor Talking Machine
- National Cash Register
- Wright Aeronautical
- North American Manville Corporation
- American Brands (American Tobacco B)
- Eastman Kodak
- American Sugar Borden
- Atlantic Refining
- Hudson Motor
- General Railway Signal
- Goodrich
- Nash Kelvinator (Nash Motors)
- Liggett & Myers
How many are still around today? Large companies don’t usually last unless the goverment helps them out.
125
u/WubDubClub 5d ago
Government creates far more monopolies than free market ever has.
60
u/OkPreparation710 5d ago
Through regulations created by industry backed lobbying, I assume?
99
u/Anthrax1984 5d ago
Yep, its called regulatory capture.
A good modern example is Bezos advocating for a much higher minimum wage, while also automating his business as fast as possible. This will allow him to force his competitors out of business that rely on brick and mortar locations and expand his monopoly.
41
u/jasont3260 5d ago
An even better example is Meta meeting with governments to enact “child protection” laws and regulations that basically make it all but impossible for competitors to enter the market since they can’t afford the compliance infrastructure.
17
u/umpteenththrowawayy 5d ago
The same can also be seen with Tesla backing environmental legislation, new startups simply can’t meet regulation standards and remain competitive.
8
2
u/surfnsound Actually some taxes are OK 4d ago
A good modern example is Bezos advocating for a much higher minimum wage
Reddit's favorite bogeyman, Wal-Mart, does as well.
10
14
u/spiffiness Voluntaryist 5d ago edited 4d ago
Well, yes, but also no.
I say this because most people don't realize that things like patents fall under your category of "regulations created by industry-backed lobbying".
Every patent is a government-granted monopoly. Most of the tech monopolies of the last several decades could never have become monopolies without patents.
Every time the government granted right-of-way for a particular railroad, they created a monopoly.
Oil baron John D. Rockefeller wouldn't have been able to build his exploitative oil monopoly if he had not been able to leverage the government-granted railroad monopolies. His oil company originally became successful by doing a better job of satisfying customers, which is great! But then he told the railroad monopolies, "If you still want me to continue to pay you to carry my oil, you have to promise me you won't carry anyone else's oil", and the government-granted rail monopolies went along with it, and that allowed him to start getting away with charging exploitative prices.
Every time the government requires a "Certificate of Need" before a new hospital can be built, that's a government granted monopoly for the incumbent hospital.
Cities create monopolies or maybe duopolies on ISPs (Internet Service Providers; what some people accidentally call "Wi-Fi providers") by only allowing one or two companies to install telecommunications wires on the utility poles or underground. So there were landline telephone monopolies and local cable TV monopolies, and now that we see both as just "ISPs", there's an ISP duopoly in most US cities. There's a limited number of wireless carriers for similar reasons, based on government granted radio bandwidth monopolies and government restrictions that keep more companies from building cell towers.
There are just so, so many different ways that government restrictions create monopolies, and us libertarians realize they all come down to "regulations created by industry-backed lobbying", but a lot of normies don't realize that things like patents and radio spectrum allocation/licensing and a bunch of other things really come down to "regulations created by industry-backed lobbying".
3
u/OkPreparation710 5d ago
Regarding patents, would a better system be to reduce the length of patents, stop issuing vague patents and a use it or lose it policy?
6
u/spiffiness Voluntaryist 5d ago edited 5d ago
Patents started out as blatant crony handouts from monarchs to their nobleman pals. They were continued under American democracy under the false premise that they were necessary or useful for encouraging innovation. There's never been any empirical evidence behind that "just-so story" that patents spur innovation. In fact historical evidence shows that innovation has been greater in markets that did NOT have patents or other so-called "intellectual property" protections, than in markets with IP protections.
See Boldrin & Levine, "Against Intellectual Monopoly", especially chapter 9 on the pharmaceutical industry. http://www.dklevine.com/general/intellectual/againstnew.htm
See also Stephan Kinsella, "Against Intellectual Property"
https://mises.org/journal-libertarian-studies/against-intellectual-propertyTrue to the authors' libertarian principles, both books are available for free online.
If some evidence comes along that says the idea-monopolists are right and IP laws can indeed spur innovation better than a free market without government-granted monopolies would do, then the terms and lengths of protections should be strictly restricted to just the right amount that meets the goal of maximizing innovation. Mandating reasonable and non-discriminatory licensing terms might also be wise (like how anyone can sell their own cover recording of a song as long as they pay the reasonable, congressionally-set licensing fee to the songwriter). But again, I'm not really advocating for any "make IP less bad" policies, I'm against IP all together, because IP is a restriction on freedom and uses government thuggery to create artificial scarcity rather than embracing natural abundance.
3
u/Null_zero 5d ago
No government no intellectual property monopolies. Patents and Copyright go away. You have to compete on your ability to produce the best product and or at the lowest price.
3
u/GaryKasner 4d ago
The biggest transfer of wealth in the history of the world was the coronavirus lockdown.
3
u/Murky-Science9030 5d ago
But there are some cases of naturally-occurring monopolies, from what I can tell. Sports seems to be one of them. I'm a big UFC fan but there is constant talk about how they take advantage of the fighters because they have a monopoly on the sport (it'd be hard to argue otherwise).
5
u/Lagkiller 5d ago
But there are some cases of naturally-occurring monopolies, from what I can tell.
There is literally no such thing. Every single example of a "natural monopoly" ends up being government saying there is a "natural monopoly" and making rules that prevent anyone from entering said market.
Sports seems to be one of them. I'm a big UFC fan but there is constant talk about how they take advantage of the fighters because they have a monopoly on the sport (it'd be hard to argue otherwise).
UFC has plenty of competition, there are leagues other than UFC that exist. UFC just happens to be the largest. They use that power to recruit fighters and talent, just like any large business would. Most people if asked if they wanted to take a job with Apple or some small startup would take the job at Apple - does this make Apple a "natural monopoly"? Of course not.
1
u/Murky-Science9030 5d ago
I guess the question is at what point we consider it a "monopoly". With regards to revenue it seems like UFC has over 90% of the market (from what I remember reading). I know other leagues exist but they are all an order of magnitude smaller
2
u/Lagkiller 5d ago
I guess the question is at what point we consider it a "monopoly".
A monopoly is pretty easily defined as the only participant in a market.
With regards to revenue it seems like UFC has over 90% of the market (from what I remember reading).
And nothing stops anyone else from creating their own league or the smaller leagues from expanding. Even if we accept that Rizin, Evolve, or the PFL aren't competitors, and focus solely on the US. There are many regional and state leagues that run their own competitions. Not to mention that MMA fighting is a niche of fighting events entirely so there are other martial arts that have their own, boxing, and others that take up that space.
So the claim that UFC is a "monopoly" honestly falls flat no matter how you want to narrowly define what it is and what its competitiors are.
1
u/Nickools Minarchist 5d ago
No you don't understand it's the government that is maintaining the UFC monopoly, the government safety regulations make it too costly for anyone else to start a league.
But seriously this is the thing I disagree with the most in this sub. The belief that monopolies only exist because of the government is just silly, yes it contributes but there are many ways for monopolies to exist and if you remove government regulation they will flourish. The mental gymnastics used to explain how every monopoly will dissolve if the government ceased to exist is quite impressive.
3
u/Murky-Science9030 5d ago
Come on man, I'm libertarian but the government's safety regulations aren't the culprit. The consumers don't want to have to keep track of two leagues, they like the simplicity of knowing that a championship fight is for the best fighter in the world and not having to think about another league that may also have the best guy. It's a network effect the same way that social media functions.
2
u/surfnsound Actually some taxes are OK 4d ago
The consumers don't want to have to keep track of two leagues, they like the simplicity of knowing that a championship fight is for the best fighter in the world and not having to think about another league that may also have the best guy.
No one tell this to European Football leagues.
2
u/Nickools Minarchist 5d ago
Sorry I thought the sarcasm was obvious, I agree with everything you are saying. Monopolies form for a lot of reasons, seems like in this sub people only want to talk about government interference.
1
1
u/tox_bill 5d ago
This is only bc govts stop illegal collusion. The market would never correct the most powerful, other countries would
23
u/MannieOKelly 5d ago edited 5d ago
Persistent monopolies not supported directly or indirectly by government regulation are extremely rare because of competition. The idea that a monopolist can lower prices, drive out competition and then raise prices is mistaken since new competition will come in if prices are elevated and there are no artificial barriers to entry. It used to be said that in industries where huge amounts of capital are required, that was a significant barrier to startups, but Tesla showed that lots funding will be available if investors like the opportunity.
7
u/OkPreparation710 5d ago
Say there is an artificial barrier to entry, what happens then? For example, Microsoft installing Internet Explorer on all Windows computers and purposely making it hard to install other browsers (e.g. Google)
10
u/MannieOKelly 5d ago
If it is very significant to buyers--and I don't believe it is in this case--they'll buy Apple or Linux computers.
RE: "purposely making it hard"--I have Chrome on my windows laptop as the default and my absolutely non-technical wife set up Duck-Duck-Go on her desktop for search. Not hard.
In my opinion we're better off letting companies offer what they want to offer, and respond with our choices as consumers, even though they will always look for ways to make profits. That's their job after all in a market economy.
17
u/Oeuffy 5d ago
Hey! Current libertarian and former antitrust absolutist (extend for the doj antitrust team in law school). A few answers:
The second wave school of antitrust on this is actually relatively hands off and libertarian, whereas Lina Khans third wave is more aggressive. The second wave is actually open to this acquisition strategy mainly because it is actually does the opposite of its intent.
Bribing is expensive and is more expensive based on success. If the success is obvious, the market gap and expensive bribe are much more obvious. other entrants see the successful niche open and come in if nothing else because they see a no lose: either they fill the gap and get rich or get bribed to exit and get rich. The monopoly cannot bribe an infinite chain of entrants. But each bribe makes the signal to enter the market stronger. Increasing competition.
6
3
u/wikipisteme 4d ago
Well in the libertarian thought there isn't such a thing as an economic monopoly. Lots of people consider Amazon as a monopoly but they still have to compete with other companies like Walmart, target, eBay, Alibaba and more. And in fact the innovations of Amazon lowered prices so much that they actually cut the inflation. I see that as a benefit of a market economy. But I certainly see a monopoly in things which can't be produced like land and classical libertarians don't have a solution for that.
In addition we in Germany only consider a juridical monopoly as a monopoly by the state not by the economy (Article 105 section 1 of the German constitution).
10
u/Mojeaux18 5d ago
Natural market forces. It’s an illusion that monopoly is a capitalist inevitability. If company A, let’s call them Apricot, buys Banana (maker of the Banana jr), they will have a larger company. But larger companies are plagued by corporate drag. Corporate drag is real and manifests itself with internal bureaucracy, complacency, and a kind of decision making by committee that leads to too many chiefs and political counter arguments, bean counters, and other risk averse behavior.
Small innovative companies tend to be far more efficient than larger companies. Their products and processes are focused, they take risks, they are motivated to change, and often they fly under the radar.
Let’s say Apricot also aquires Camcung and Dellta, Hackard Pewlet, and even Enovo dominating the market for … idk a computer?… a niche producer of computers can easily profit as long as there are no govt impingements on entry. The corporate drag will drive the cost of computers up, the lack of innovation will make it easier for a small company to innovate even to produce compounded products that provide alternatives. People are not monolithic and niche products are always being created that challenge the market paradigm. AT&T even with its monopoly (sic) was challenged and is now a minor player. Same with the duopoly of Verizon and AT&T.
Monopolies are an artifact of govt corruption/influence. They do it in the name of public interest safety or welfare, but it’s the opposite. Exorbitant license requirements, safety regulations, or other impediments serve to protect the establishment and not the public. Even then the industry can be shaken up by an innovator. Look at Uber as they challenged the Taxi establishment. It wasn’t really a monopoly but it was totally dominated. Taxi medallions could cost a million and the taxi rides were horrible and barely convenient. Uber isn’t perfect but it’s miles above what we had before.
Natural market forces would prevent monopolies if it weren’t for government preserving them.
5
u/OkPreparation710 5d ago
So really having many smaller companies is better for innovation, and this can be achieved by no or minimal regulations?
4
u/Mojeaux18 4d ago
Regulations are like speed limit signs. They are meant to protect the public by limiting speeds thereby reducing traffic accidents. Ultimately they are futile and frustrating. People speed and cops use ticketing as a source of revenue. Better is the police citations for reckless drivers AND ultimately responsibility lying with the drivers.
Same goes for corporations. Regulations are paperwork. Better would be awareness and understanding that if your product is defective and hurts someone, you go to jail and lose the money. Soft proportional regulations that depends on the size of your business (larger companies pay more) would make sense.
5
u/gotnotendies 5d ago
What if they also start buying up the rest of the supply chain and prevent others from using it? That’s what happened with Standard Oil. It’s what Amazon does
0
u/Mojeaux18 5d ago
It’s called cornering the market. The graveyard is filled with genius’s who thought they could and lost big. I was part of a electronic component manufacturer who thought they could corner the market on a rare element that produced exemplary esr. They cornered the market and paid a pretty penny for it, more than they expected. When they tried to recoup their losses by hiking up prices, they found customers simply didn’t want to spend that much money and stayed with their original components. Shortly afterward a new mine was found due to the wonderful incentive of artificially high prices. Talk about failure.
Standard oil was what I was writing about earlier. The “standard” was kerosene refinement which was known to cause fires of done wrong. Rockefeller standized oil in an attempt to prevent competition. There were a few studies by Sowell and others to really explore what happened with standard oil. The conclusions were that there was a lot of fear and fear mongering (politicians stoke fears of the power of millionaires). The cases of Rockefeller actually trying to monopolize were in Pittsburg iirc and he never got his money back. When they broke up standard oil, he owned some of each, he ironically ended up being wealthier than before.
6
u/TheIronGnat 5d ago
Remember that the government is not only the biggest monopoly, but a monopoly that will kill (or at least imprison) you if you refuse to buy its goods and services.
7
u/corn__P0p_ 5d ago
Sounds like the smaller company would be voluntarily selling their business. Is this bad?
11
u/Mead_and_You Anarcho Capitalist 5d ago
Funny story about that.
So back in the day, Standard Oil used to do that. Buy any small start up so he could maintain his hold.
Well eventually some guys figured out that they didn't even have to actually really start a competitor, they just had to pretend to and Standard would buy them. It was basically free money.
This was, of course, unsustainable, and eventually Standard had to stop this practice.
THAT is when Standard's near monopoly fell. Long before the anti-trust laws broke it up further.
1
u/surfnsound Actually some taxes are OK 4d ago
I love when M&A is denied by government regulators on the grounds of competition, then the acquisition target just ends up folding anyway because selling really was a last ditch effort to maintain any value for shareholders so all those people are wiped out for the exact some result.
2
u/PuzzleheadedShop800 5d ago
Because firms not only have present competitors but also future competitors, just because you successfully eliminate all competition does not mean new competition will never arise. Specifically if the monopoly raises its prices then it becomes profitable for another firm to enter the industry. If another business innovates the production in some way it then becomes profitable to enter the industry of the monopoly, not to mention individuals, if they do not like a particular firm, may decide to buy from another firm or boycott the monopoly out of spite or some moral inclination. In the free market, market shares are not stagnant, firms are always vying for other firms profits, which is, after all, in the benefit of us consumers.
2
u/Dance_Man93 5d ago
Would you call it a monopoly if only one company supplied one area with all the wants and needs? How about if we change the parameters. What if we change the area from a country to a state? At county? A city? A city block? One house? How small can an area be to be supplied by a monopoly? And if similar services are provided by other companies outside of this area, are they still a monopoly? What if we change all goods and services, all wants and needs, to just a single product? Are they still a monopoly if other companies exist in this area? If not for one service, but yes for all; Then when does it change? 5%? 10%? 50%?
Final question. If another company exists within the area of a larger corporation, for example: america juice sells to all of america. Florida juice only sells in florida. Are they both monopolies? Is one a monopoly while the other is not? Or do the existence of these two players on different scales, mean neither of them are a monopoly?
All this to say, what is a Monopoly? Are they a problem? If so, how are they removed or challenged?
2
u/Iconiclastical 4d ago
Nothing is stopping monopolies at a worldwide level, but few of them exist. Supposedly, there is a large Italian firm that controls eyeglasses. But, even they are being nibbled away at by the Chinese, Zenni, Dollar Store, and others.
2
u/LostInMyADD 4d ago
One thought that came to mind when you mentioned that with a free market completely unregulated, the only way a monopoly develops is with an exceptional product. I think this is true if the market was free from the start of it. Where as if we went through some revolution and the market became free over night, those companies who already have all the resources and capital at the start of the change would definitely develop monopolies regardless of having such a great product.
Idk how this would be solved tbh, and this is just a thought so if anyone can explain with more detail or subtlety for or against what I said, I'm all ears and listening.
1
u/OkPreparation710 4d ago
This is interesting, I didn’t think of that.
If a libertarian party were elected, would the current markets have to be dismantled or would there need to be some sort of transitionary phase where the Government provides subsidies to startups (I know this is the antithesis of libertarianism but it’s the only way I can think of)
2
u/WanderingPulsar Minarchist 3d ago
Monopolies, Oligarchs, Mafias, these are things s*cialism has invented and introduced
None of these can survive in a free society where the ruthless competition shapes out the definition of tomorrow
2
u/Samuel_Fjord-Land 2d ago
Monopolies are inherently unstable and without external forces will fall apart.
- Larger companies move and adapt slower to changes
- Larger companies have a lower innovation threshold
Organizations with more people become misaligned easier, each individual has their own agenda and biases. This means that such an organization will start to do things that contradict
Price setting creates competition, if a large company or a cartel attempts to set prices (outside of regulatory capture) this creates opportunities for new market entrants
Product degradation, if a monopoly attempts to cut costs leading to a subpar product offering this creates opportunities for new market entrants to sell a better product even at a higher price
To sum it up, in a free market we don't have to do anything.
5
u/finetune137 5d ago
As long as there are no artificial barriers of entry then monopoly is a good thing.
9
u/Flat-Dealer8142 5d ago
We love monopolies. If a business serves its customers so well that other businesses can't even compete, it means they're doing a great job.
In reality, they're not nearly as common as you think and they're almost always maintained by using force and coercion (usually with the help of a government).
3
u/pizzaforce3 5d ago
Came here to see what opinions libertarians had on wind turbine supports, and was disappointed.
3
u/Ghost_Turd 5d ago
Don't make the mistake of assuming that monopolies are, in and of themselves, bad things. They are (unless brought about by government meddling) a natural feature of a free market, and important signals about consumer wants and needs.
14
u/dassix1 5d ago
This is where I may disagree. It seems Americans and even Libertarians are in favor of strong IP/patent laws, which requires a large federal agency to oversee and enforce. This to me is "meddling" by the government, allowing companies to patent the most ridiculous, common sense things for years and have the US government protect it.
As long as you have that, there isn't a chance for another company who could come in and produce a similar product for less, because they would be restricted by the US govt. Effectively (albeit indirectly) supporting and sometimes even creating monopolies.
16
u/AToastyDolphin Mises Institute 5d ago
Most libertarians I know are against patents and IP.
6
u/nocommentacct 5d ago
Ya count me out of that vote. The power needed for what it takes to enforce IP or parents eventually turns the govt into the ever growing monolith it is today. There would still be an incentive to invent. You’d just need to have manufacturing and supply lines up with your idea so someone didn’t immediately steal it.
3
u/OkPreparation710 5d ago
So would having a shorter duration of patents and use it or lose it policy, solve this?
4
u/OkPreparation710 5d ago
This is what I was thinking about earlier.
Don’t IP and patents stifle innovation as many companies (Google) domain squat and prevent innovation?
Couldn’t a lot of the issues with ridiculously high medicine costs be reduced by introducing a use it or lose it policy and shorter patent duration - therefore more general medicines can enter the market, driving the price down for the consumer?
7
u/Ghost_Turd 5d ago
I don't believe government has a role in enforcing IP.
3
u/Professional_Golf393 5d ago
3
u/Ghost_Turd 5d ago
I'm aware they exist. I don't believe they should.
5
u/Professional_Golf393 5d ago
Ah ok, I agree.
Perhaps you should’ve said “should have” rather than “has”
5
u/AzureTheSeawing 5d ago
This relies on the public actually making an effort to boycott a monopoly when it starts producing a subpar product, and we don't have a good track record of actually doing anything besides complain.
7
u/bb0110 5d ago
Curiously, if a company were to take over a highly complicated and complex formulation for a medicine, lets say a cure for cancer, and jacked up the price to a ridiculous amount then proceeded to either buy or sabotage in some way every company that tried to replicate said drug, you are ok with that?
4
u/buchenrad 5d ago
Using force to limit competition is a criminal act and does not require antitrust legislation to enforce.
Let everyone voluntarily participate in the market and prosecute those who use force and the market will sort itself out.
3
u/bb0110 5d ago
I never said force. In a truly free market you can buy up any competitor you want and it is completely legal.
2
u/Professional_Golf393 5d ago
So what’s a legal example of sabotage that you referenced earlier?
4
u/bb0110 5d ago
There are endless possibilities. One example would be identifying the smaller companies vertical and either buying those companies that the company relies on or leveraging their large size and getting those companies into an exclusivity agreement leading to the smaller company not being able to get something that is needed and essentially not being able to produce what they need for a time, having cashflow issues then closing.
-2
u/Professional_Golf393 5d ago
So in your cancer drug example, having an exclusivity agreement with a supplier? (that presumably also has a monopoly on production of the precursor). It doesn’t really sound like sabotage to me.
I would say that precursor supplier will face the same challenges maintaining their monopoly within an entirely free market. The problem fixes itself.
7
u/Professional_Golf393 5d ago edited 5d ago
If they jack up the price in a completely free market there is enough incentive for others to replicate and sell at a better price. If they continue to buy the smaller companies, then they become inefficient and more small companies will continue to emerge until they can’t buy them all or the smaller companies can outcompete them on price. (This is currently a thing, building a company with the exit plan to sell the brand to one of the large players in that industry)
Also it depends what you mean by sabotage. In what way? The only legal way I can think of legally sabotaging a smaller company would be to undercut them on price with the economies of scale a larger company would have, and that’s only a good thing for the end consumer.
1
u/LiquidTide 5d ago
To me the bigger question becomes who would bother seeking to find a cure for cancer if the billions spent on dead ends could be avoided by an upstart who replicates the technology and copies the drug? Why bother if there would be zero chance of recovery of investment?
Patents are a construct to address a market wrinkle or complication, much as we need some method to prevent overfishing in, e g., the Great Lakes or Gulf of Alaska.
Patents are property rights, much like titles to land, automobiles, or other property. Intellectual property is property.
2
u/Pwngulator 5d ago
A monopoly is the opposite of a free market. A free market functions via competition; with the presence of a monopoly, there is no competition.
2
u/Percentage-False Minarchist 5d ago
Outside of companies that have very short lived monopolies that are wat get called natural monopolies. they don't exist outside of government sanction and aid, at least not for very long. Even Standard oil and the other monopolists of the Gilded Age could only get to the point they were by bribing public officials to give them massive regulatory carveouts and such. Even with that they couldn't successfully choke out all competition within the market.
-1
u/ForHumans 5d ago edited 5d ago
Standard Oil was already losing market share at the time of their break up.
1
u/ledoscreen Anarcho Capitalist 5d ago
>but what is there to stop business owners bribing smaller businesses to sell their business to them
мarginalism. unbelievably cruel bitch.....
1
u/AlphaTangoFoxtrt Sleazy P. Modtini 5d ago edited 5d ago
Reduce costs to start a business. No bailouts for "too big to fail". No special subsidies or tax breaks only available to the establishes giants.
1
u/OkPreparation710 5d ago
Wouldn’t tax breaks and/or subsidies to giants help establish a monopoly?
1
u/AlphaTangoFoxtrt Sleazy P. Modtini 5d ago edited 5d ago
Exactly why we don't support them. The government should not be picking winners and losers.
Edit: just realized my phone autocorrected "No subsidies" to "So subsidies" my bad, it's been fixed.
1
1
1
2
u/Fair_Performance_251 Libertarian 23h ago
Monopolies should be crushed. Yes government does create monopolies, but monopolies also create governments or buy them thus getting right back to the issue of too big to fail. The real question is how do you stop the corruption of the government by potential monopolies?
1
u/ackbladder_ 5d ago
If a company (amazon is a real life example) temporarily lowers prices at a loss until their competitors die, then jacks them up again at a higher margin, it’s up to the consumer to decide if they’d rather spend more and ensure healthy competition.
If there is a significant backlash against a monopoly and a willingness to pay more, then there is a demand for the product from another company thus dismantling the monopoly.
Amazon isn’t just big because it killed it’s competition, it’s also incredibly efficient and advanced. I’d argue it’s not quite a monopoly yet but even if it were I wouldn’t mind using it.
An example of a real monopoly is Thames water in England which was privatised in the 80’s. Everyone NEEDS water and there is only one supplier. The company and water system are both on the brink of collapse due to underinvestment. Bureaucracy doesn’t allow any competition which would have driven them out years ago.
1
u/OkPreparation710 5d ago
I’ve heard of Thames Water, and they are propped up by the UK Government right? That ties in with these other comments, that Governments create monopolies.
2
u/ackbladder_ 5d ago
They don’t prop them up on a constant basis. They’ve asked for a £40 billion taxpayer bailout despite paying out £70 billion in dividends in the time the debt was acrued. I’d say in this case the government created this monopoly by bureaucracy but efficient monopolies can form naturally.
1
u/TheBUNGL3R 5d ago
So nothing would be preventing company A from buying everyone out. There's not really a problem with monopolies (if they did it legitimately) unless they begin to price gouge, at which point someone can start Company B with lower prices, but maybe inferior products. Consumers fed up with Company A's gouging can now buy from Company B, creating competition. Company A must now either price accordingly or prove to the consumer that their product is superior.
4
u/Jack21113 Libertarian 5d ago
The thing is that company B will never exist in some circumstances and A will never have to face competition
2
u/TheBUNGL3R 5d ago
In the event that A cut off access to a natural resource entirely, sure! I don't know how you'd deal with that, other than if consumers boycotted. Unless it's like fresh water, you can boycott. But yeah I totally see where you're coming from and it's an intelligent and important question
1
u/Some-Contribution-18 5d ago
I see a lot of good answers here but it seems one is missing…the profit motive. Let’s say worst case scenario happens and company Alpha buys up every competitor in existence currently in that industry. You correctly pointed out the only way it can stay the only company is if it can produce cheaper and with better quality than anyone else which is extremely rare and hard to maintain. There are two main reasons why it will not keep the market for long. 1) law of diminishing returns. It would not make sense to service every single possible customer because the company cannot be everywhere at once and be the best at everything. As a result, there will be customers they would lose money serving which would cause it to eventually abandon those customers in local markets opening the door for new entrants to pursue those profits. 2) Businesses exist to make a profit. If company Alpha is making a profit, entrepreneurs will eventually find a way to do it jist a little bit cheaper or better and enter the market to capture market share.
2
u/OkPreparation710 5d ago
Right, that makes more sense. Thank you!
There is one example - however - that I can’t work out. Back in the 1990s, Microsoft were bundling Internet Explorer with all Windows packages and making it harder to install other browsers. I assume this an artificial barrier to entry. How would this be dealt with in a Libertarian country?
1
u/Some-Contribution-18 5d ago
A real life example is that customers who do not like what Microsoft was doing, it would cause customers to flock to competitors (e.g. MAC OS or Linux). Furthermore, once entrepreneurs smell the blood in the water, they would produce new OS to compete.
0
u/chaoking3119 5d ago
Firstly, it doesn’t seem possible for any business to get to such a disproportionate size without utilizing a ton of unfair advantages offered by government. It’s simply just too hard for a big and bulky corporation to compete with lean and efficient smaller businesses. Yes, there is efficiency in scaling up, and that’s great, but it has diminishing returns. It usually doesn’t outweigh all the disadvantages that come with such a massive size, always requiring a ton of internal regulations and approvals just to maintain basic function. A leaner business just has a lot less of that, so are able to stay competitive.
In your example, yes, Company A is able to buy any small business that’s willing to sell. That’s not a bribe. That’s a normal sale, and the small business owner should be allowed to sell their own business. Company A can’t force anyone to sell, and chances are not everyone would. They can only buy out other businesses so long as they’re profitable, and they can only stay profitable by staying efficient and productive. It’s not a bad thing to consolidate smaller businesses into a more efficient one, but it wouldn’t be sustainable to keep buying up all small businesses, anyway, because it adds an additional expense that your completion doesn’t have to face. Company A would bleed out, and could only offset it by continuously improving, but would be a benefit.
1
u/OkPreparation710 5d ago
That makes sense. So by buying up the smaller companies, Company A will become unsustainable so it will either collapse (ending the monopoly) or improve the product?
2
u/chaoking3119 5d ago
Yea, that’s right. It doesn’t necessarily have to be the product that gets improved. Any part of the business could be made more efficient, but yea.
One of the biggest problems is that even creating a business is too over-regulated. If it were easy enough to create one, it wouldn’t be possible to buy each and every small business. People would just create them with the intention of selling them off, and keep creating more so long as they keep buying. The only reason that doesn’t happen is because government gets in the way of creating them in the first place. It's just not sustainable to keep buying out any competition.
•
u/AutoModerator 5d ago
New to libertarianism or have questions and want to learn more? Be sure to check out the sub Frequently Asked Questions and the massive /r/libertarian information WIKI from the sidebar, for lots of info and free resources, links, books, videos, and answers to common questions and topics. Want to know if you are a Libertarian? Take the worlds shortest political quiz and find out!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.