DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - I Am Convinced that Most of The Lefties here Work for the Govt

**mQb0aVZe** · 03-24-2011, 06:20 AM

I don't care in the private industry--those things tend to work themselves out in some way or another.

It's called C-O-M-P-E-T-I-T-I-O-N.

Competition doesn't always naturally create itself. I work in the utilities space (they're my customers) and it's a natural monopoly. These things form.

HGirl you have read my rants about Pennsylvania's electricity "deregulation"; it's not producing any value to consumers who buy energy. All it has done so far is raise the floor price for electricity so everybody pays a LOT more, and give you a choice over one line item in your bill, and it has added thousands of people into the billing process that were not there before who are just dead weight. Like the marketing schmoes trying to get people to switch to get the 1-cent discount on the generation charges. This isn't real competition, it's Tom Foolery.

Oligopolies are basically a legalized form of price fixing that gets as CLOSE as legally possible to a monopoly. A market with only 3 suppliers in it and most of the employees have only a couple choices to relocate to if they quit their jobs equals a lot of internal shared information, including pricing that gets more sticky and less "free". The ATT buy of T-Mobile is a clear cut case. There is no advantage to consumers at face value in this transaction. However natural monopolies do have weaknesses, like market shutout which can backfire. But it can take decades for a breakout to come. Ask the cable TV industry about this (satellite, FIOS, etc).

Free markets do work, but only where the commodity or service involved can freely float in the market. If you have suppliers holding down supply or only a couple of buyers, the market isn't ever going to be the textbook ideal of a random place where arms-length transactions solely determine price and everyone is on an even advantage.

The Rand school of economics loves to ignore these and/or claim they're immaterial; as they do services which the free market would rather not supply, like fire protection. As you know, Philadelphia was the first place in the US where the idea of a private fire fighting system was established and it was a nightmare for the "consumers" who quickly discovered that it was not so easy to get a fire fighting gang to one's house if one wasn't paying for fire protection to a company that was available and sometimes other fire companies were not willing to extend themselves to "out of network" customers, etc. Fire fighting in Philadelphia in its early stages kind of had the service quality of an HMO insurance that requires referrals before patients are allowed to get a procedure.

Hard core Rand fans also do not believe government policing of fraud is really necessary. Alan Greenspan spoke openly about this; he was a believer of it. The argument goes that if someone in the market is a bad player, the other market players will ferret that person out and not trade with him. The reality is that it's absolutely not true.

And even if you have cops on the beat, if you have cops on the beat who collude with the players and take kickbacks, or are too dumb to understand how the market works, then the Bernie Madoffs are allowed to roam around the free market and inflict heavy amounts of damage.

Will getting rid of the cops get rid of the future Madoffs? I guess you could say, if we stop outlawing rape and give up the justice system from going after rapists, will that help or harm rape victims?

03-24-2011, 06:20 AM	#22
mQb0aVZe Join Date Nov 2005 Posts 425 Senior Member	I don't care in the private industry--those things tend to work themselves out in some way or another. It's called C-O-M-P-E-T-I-T-I-O-N. Competition doesn't always naturally create itself. I work in the utilities space (they're my customers) and it's a natural monopoly. These things form. HGirl you have read my rants about Pennsylvania's electricity "deregulation"; it's not producing any value to consumers who buy energy. All it has done so far is raise the floor price for electricity so everybody pays a LOT more, and give you a choice over one line item in your bill, and it has added thousands of people into the billing process that were not there before who are just dead weight. Like the marketing schmoes trying to get people to switch to get the 1-cent discount on the generation charges. This isn't real competition, it's Tom Foolery. Oligopolies are basically a legalized form of price fixing that gets as CLOSE as legally possible to a monopoly. A market with only 3 suppliers in it and most of the employees have only a couple choices to relocate to if they quit their jobs equals a lot of internal shared information, including pricing that gets more sticky and less "free". The ATT buy of T-Mobile is a clear cut case. There is no advantage to consumers at face value in this transaction. However natural monopolies do have weaknesses, like market shutout which can backfire. But it can take decades for a breakout to come. Ask the cable TV industry about this (satellite, FIOS, etc). Free markets do work, but only where the commodity or service involved can freely float in the market. If you have suppliers holding down supply or only a couple of buyers, the market isn't ever going to be the textbook ideal of a random place where arms-length transactions solely determine price and everyone is on an even advantage. The Rand school of economics loves to ignore these and/or claim they're immaterial; as they do services which the free market would rather not supply, like fire protection. As you know, Philadelphia was the first place in the US where the idea of a private fire fighting system was established and it was a nightmare for the "consumers" who quickly discovered that it was not so easy to get a fire fighting gang to one's house if one wasn't paying for fire protection to a company that was available and sometimes other fire companies were not willing to extend themselves to "out of network" customers, etc. Fire fighting in Philadelphia in its early stages kind of had the service quality of an HMO insurance that requires referrals before patients are allowed to get a procedure. Hard core Rand fans also do not believe government policing of fraud is really necessary. Alan Greenspan spoke openly about this; he was a believer of it. The argument goes that if someone in the market is a bad player, the other market players will ferret that person out and not trade with him. The reality is that it's absolutely not true. And even if you have cops on the beat, if you have cops on the beat who collude with the players and take kickbacks, or are too dumb to understand how the market works, then the Bernie Madoffs are allowed to roam around the free market and inflict heavy amounts of damage. Will getting rid of the cops get rid of the future Madoffs? I guess you could say, if we stop outlawing rape and give up the justice system from going after rapists, will that help or harm rape victims?
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