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Post by libertylover on Apr 15, 2009 20:29:12 GMT -8
Lady,
I agree with you that big businesses should not have unfair advantages. The only way that they gain unfair advantages legally is through government. Lobbyist groups often attempt to create advantages for their big companies through lobbying for subsidies, regulation (which creates barriers to entry), or other interventions in the market. Without the government, the only way a business gets big legally, is through serving the customer the best. This is why limiting government is the answer to our problems.
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Post by Lady S. on Apr 15, 2009 20:37:55 GMT -8
Maybe so, but think Microsoft. I completely agree with the fact that Mr. Gates earned and should get to keep every penny they make, but at the same time, you open yourself up to getting fucked in the ass. How? Think about it...when technology or money (aka being a smaller business trying to get into the market) doesn't allow, certain companies aren't allowed the chance to break into a certain type of industry. Therefore, there are fewer, richer companies who can jack prices to a point where we don't have the choice but to pay more. Smaller businesses don't stand a chance. In Global Economics, you learn about the importance of giving each person a fair shake with respect to the world (ie types of government that have NOT worked in the past). Giving unlimited power of growth to big business won't allow the little guys to be as successful as they could be in Capitalist society. It also greatly limits the power of the consumer to choose who they purchase from.
Obama has been criticized of turning our country into a socialist nation. I wonder if we will begin to lean that way in the coming years. I think the important thing is not to abandon our current policies (which work given the proper regulation) just because we are going through a rough patch.
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Post by ericdietrich on Apr 15, 2009 20:53:49 GMT -8
The way I see it, if the big companies take advantage like you say, new companies can still rise up and sell the same services or products at a fair price. Then say, the big companies start undercutting the small companies and the consumer still gets a deal. Allowing this competition one, gives the consumer a better deal, and two, forces people to innovate if they want a fair shot. Whether it be more efficient cars or energy supplies, or whatever. It forces innovation, and gives the consumer a better deal.
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Post by Lady S. on Apr 15, 2009 21:31:54 GMT -8
The way I see it, if the big companies take advantage like you say, new companies can still rise up and sell the same services or products at a fair price. Then say, the big companies start undercutting the small companies and the consumer still gets a deal. Allowing this competition one, gives the consumer a better deal, and two, forces people to innovate if they want a fair shot. Whether it be more efficient cars or energy supplies, or whatever. It forces innovation, and gives the consumer a better deal. Not so. Think Wal-Mart. Because they have TONS of money, they can undercut the smaller businesses (one major reason Wal-Mart stores are banned from and will never be allowed to do business in Portland). The top two reasons new businesses fail are: #1 Lack of Capital (money, resources, land, etc) #2 Lack of experience It takes money to make money. If the bigger companies can do the same exact thing and charge less for the product, they will be the only ones to thrive. Yes, this works for a few years. However, those businesses begin to gain SO much influence over the economy that it becomes unfair to the little guys. So yeah, average joe buying a lawn mower might get a good deal-but what if that same person wants to open a lawn mower store? He can't because Wal-Mart will always under cut him. In the short term, we save money on common goods. In the long run, the rest of us lose our autonomy in terms of starting businesses of our own. And thus, there becomes a HUGE gap between upper and middle-classes. Unfair? Maybe not. But at least in the end, with government regulation we are all given more of a chance to succeed on our own. |
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Post by libertylover on Apr 15, 2009 22:09:58 GMT -8
Think Wal-Mart. Wal-Mart uses the government to insulate itself from competition. Do you know that the average Wal-Mart employee makes more than the average employee of Target and K-Mart? Guess what Wal-Mart did: They lobbied to the government to raise the minimum wage. Target and K-Mart would be forced to pay their employees more. Since Wal-Mart wouldn't have to raise the pay of hardly any of their workers, it would hurt them much less than it would hurt their competitors. This is one way that Wal-Mart uses government to keep out fair competition.
In a free market, the only way that a monopoly could arise, is if the consumers unanimously preferred purchasing products or services from that company exclusively. In reality, this has never happened. Name me one time that there was a monopoly that was harmful to society without government insulating that company from competition. You can't, because this has never happened. It is a myth that companies undercut until monopoly and then jack the prices up through the roof.
In a free market, businesses can only exist if consumers decide to do business with them. No one forces me to shop at Wal-Mart. No one forces you to shop their either. That is how it should be. The reason why Wal-Mart is so big is 1. Because many people have chosen to shop at Wal-Mart out of all the places they could shop. 2. (very distant #2) Because they have lobbied for government intervention that helps insulate them from competition.
The two reasons that you listed as the most common reasons that new businesses fail, are meaningless. In a free market, a business fails when it does not organize its capital in a way that is pleasing to the consumer and efficient enough to make a profit.
Free market capitalism (laissez faire), by definition, has no coercive barriers to entry into a market. This ensures the most opportunity to start a small business.
The gap is widening between classes, for sure. However, this is not because of the free market. This is because the government messes with the economy.
The more government regulation, the less chance we will have to succeed on our own.
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Post by username on Apr 22, 2009 10:41:25 GMT -8
The way I see it, if the big companies take advantage like you say, new companies can still rise up and sell the same services or products at a fair price. Then say, the big companies start undercutting the small companies and the consumer still gets a deal. Allowing this competition one, gives the consumer a better deal, and two, forces people to innovate if they want a fair shot. Whether it be more efficient cars or energy supplies, or whatever. It forces innovation, and gives the consumer a better deal. Not so. Think Wal-Mart. Because they have TONS of money, they can undercut the smaller businesses (one major reason Wal-Mart stores are banned from and will never be allowed to do business in Portland). The top two reasons new businesses fail are: #1 Lack of Capital (money, resources, land, etc) #2 Lack of experience It takes money to make money. If the bigger companies can do the same exact thing and charge less for the product, they will be the only ones to thrive. Yes, this works for a few years. However, those businesses begin to gain SO much influence over the economy that it becomes unfair to the little guys. So yeah, average joe buying a lawn mower might get a good deal-but what if that same person wants to open a lawn mower store? He can't because Wal-Mart will always under cut him. In the short term, we save money on common goods. In the long run, the rest of us lose our autonomy in terms of starting businesses of our own. And thus, there becomes a HUGE gap between upper and middle-classes. Unfair? Maybe not. But at least in the end, with government regulation we are all given more of a chance to succeed on our own. Sorry about being a dick before. I tend to get a little worked up when it comes to liberty. Anyway, government regulation necessarily limits competition based on the exact model of monopoly you are talking about. Regulations are very expensive to comply with. Since regulatory costs relative to the total capital base of a company decrease as the size of a business increases (think $1000 to a company with a net income of $10,000 versus $1000 to a company with a net income of $10,000,000), regulatory costs disproportionately affect small firms. Large firms spend a staggering amount of money on lobbying for precisely the sort of regulations that politicians insists make us safer and more productive. Why do you suppose this happens? I contend that it is an effort by the overclass to use their coercive capacity to limit competition and increase government control. Large companies benefit by driving their competitors out of the marketplace; government benefits by being the recipients of lobbying efforts and an ever-increasing amount of control. The consumer and small business-person, who are not members of a protected class,absorb the costs of regulation while their protected counterparts gain wealth and power at the expense of the common man. For a more comprehensive explanation of this class struggle, see Marxist and Austrian Class Struggle by Hans Hermann Hoppe: mises.org/journals/jls/9_2/9_2_5.pdf |
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