Does the game of capatalism only have one winner?

BilPrestonEsq

Self-organize?

"Companies only dictated by there inherent drive for monetary gain in a totally free market system would eventually lead to one company supplying all the work and all the services and goods that a civilization needs. That is the nature of a free market."

Let me prove that statement. Again I am going to use walmart and again I am not picking on walmart in particular.

If you own a hardware store, you buy the products you sell from a factory for a certain price. You only have a certain amount of investment capital. Now walmart wants to get in the business. They make a deal with that same factory to buy the same products. Except they can buy in larger bulk for less money than what you pay. They can then sell the products for less in their store ultimately putting you out of business. They (walmart in this case) has even more money, more investment capital. No matter what market they want to get into they can. The hardware store example can be used in any market. They have the power to buy for less allowing them to sell for less putting any smaller company out of business.

If that statement about the nature of the free market is untrue why do we have monopoly laws?

BilPrestonEsq

"The most moral economic system is the one most free of coercion and the one which creates the greatest material and moral well-being of it's participants."

Agreed, but thats not the free market, the free market is about making money.
Are you going to invest in a company that abides by some moral code or are you going invest in a company that wants to make money for themselves and you.

russ_watters

Doing what? Walmart isn't anywhere close to being the only good/service provider. Yeah, the're big, but they don't come close to being an example of what you described in the OP. No, they really couldn't.
If Walmart existed for a hundred years in a non-reglated environment, perhaps they could start buying car companies and oil companies, but no, it isn't the law that is preventing Walmart from doing that: they are not capable of it right now. Since this contrived thought experiment doesn't bear any resemblance to reality, how is it a flaw in the free market? I suppose you could say it is a flaw in some hypothetical but nonexistent market, but how is that useful? Well, the closest thing leading down a path in the direction of what you describe would be monopolies and as you correctly note, they've been dealt with pretty effectively. So whether that flaw existed 100 years ago or some other hypothetical but nonexistent market, it doesn't exist in the real world, today. So it's already been made better than that. IMO, the market in general already has too much regulation in a lot of ways, though I think the anti-monopoly regulation is just about right the way it is.

BilPrestonEsq

If Walmart existed for a hundred years in a non-reglated environment, perhaps they could start buying car companies and oil companies, but no, it isn't the law that is preventing Walmart from doing that: they are not capable of it right now

Right now? Of course not. This is a undetermined amount of time I am talking about. I am saying it will happen eventually by design.


Since this contrived thought experiment doesn't bear any resemblance to reality, how is it a flaw in the free market? I suppose you could say it is a flaw in some hypothetical but nonexistent market, but how is that useful?

I just gave a real world example. So your saying that doesn't happen??? That it hasn't already???

If you own a hardware store, you buy the products you sell from a factory for a certain price. You only have a certain amount of investment capital. Now walmart wants to get in the business. They make a deal with that same factory to buy the same products. Except they can buy in larger bulk for less money than what you pay. They can then sell the products for less in their store ultimately putting you out of business. They (walmart in this case) has even more money, more investment capital. No matter what market they want to get into they can. The hardware store example can be used in any market. They have the power to buy for less allowing them to sell for less putting any smaller company out of business. So this doesn't happen in a free market?

Antiphon

Only the free market lives up to that definition. The free market is not "about making money." Making money is the most common but not sole motivation for trade. The ultimate motivation is survival of yourself and your family. Making money is simply the practical face of maximizing your survival.

The free market is exactly that- free because the parties making the trade come to mutually agreeable terms without coercion. It's a market because the point is to trade goods and services.

russ_watters

No, I'm saying your real-world example bears only passing resemblance to the extreme picture you painted in the OP because of how extreme it is and therefore how much time it would take in an unregulated market...which doesn't exist. And you seemed to acknowledge this with what you just said above: Since the US already saw the effect of unchecked monopoly power and has corrected that flaw in the market, the time for a company to be capable of what you described in the OP has passed. It isn't possible anymore, even with "an undetermined amount of time".

BilPrestonEsq

Originally Posted by BilPrestonEsq
I just gave a real world example. So your saying that doesn't happen??? That it hasn't already???

"No, I'm saying your real-world example bears only passing resemblance to the extreme picture you painted in the OP because of how extreme it is and therefore how much time it would take in an unregulated market...which doesn't exist. And you seemed to acknowledge this with what you just said above:" RUSS

"Right now? Of course not. This is a undetermined amount of time I am talking about. I am saying it will happen eventually by design." ME

No, I said that in response to your accusation that I meant walmart was going to take over the world tomorrow to which I replied the quote above. And the example that I gave describes the steps that any company in a free market would take to get to the extreme picture I painted in the OP. Which would be the final outcome in a free market without regulation or humanity. You still fail to see the point.

"Since the US already saw the effect of unchecked monopoly power and has corrected that flaw in the market, the time for a company to be capable of what you described in the OP has passed. It isn't possible anymore, even with "an undetermined amount of time". RUSS__________________

I made a reference to monopoly laws in the OP. I am aware. My question for you and everyone was simple. First I made a statement about the design of the free market, wondering if anyone else has the same opinion. It was meant to be a critique of the free market system. How it can be altered to serve us better. I was hoping for insightful commentary. Apparently to some it's perfect the way it is. OK

WhoWee

Clearly, the "immortal" requirement would only be applicable to a corporation. With that said, perhaps the debate would be more relevant if it applied to a new (future) world - such as Mars?

BilPrestonEsq

Ha! Maybe if I structured it in that way it would have been a lot more productive! Still relevant considering it's the system we have here on earth. And it effects us and the well being of future generations. But if I said mars then we could've taken the ideas meant for some ideal mars market and just applied them here.(head in hands)

WhoWee

Part of the problem in the here and now is everyone plays by slightly different rules (countries). The easy response is for everyone to get together and agree. However, that would not be in our (US) best interest. Instead, it would be in our best interest to bring the rest of the world up to our standards - but it would also be the most expensive alternative - and we can't afford to pay for it.

For now, I think we need to accept that people who live in tents will probably be willing to accept lower wages. At the same time, we need to comprehend that our graduate programs are filled with foreigners - our education system needs to be rebuilt and designed for excellence (IMO).

brainstorm

That would be unlikely to happen. More likely would be for the person with all the money to begin lending out to various people, who would in turn pay others and further lend out their money, continually expanding the economy in a way that would maintain the person with all the money as holding all the obligations of all their debtors.

In reality, capitalism can generate extreme wealth but when the markets function correctly, businesses would simply lower their prices until a price-equilibrium was reached where products were getting sold. Of course, the very rich could buy up everything with a fraction of their money, but why would they want to do so unless they had something they were trying to get from the people who needed the goods?

In reality, true free market capitalism doesn't exist because there are barriers to entering every market. A real free market would be like a serfdom where the serfs were liberated from their obligations to the landlord and suddenly became free to choose how to use their land and what to do with the products.

What is currently called "free market capitalism" is more like a multitude of landlords with an even greater multitude of potential employees who need income to repay debt. Both the landlords and the employees attempt to increase their incomes in order to consume products produced by other lords and their employees. Then, when their enterprises are failing to produce sufficient income, they seek government assistance to maintain their liquidity and ensure they don't have to go into farming just to feed themselves.

In a true free market, surplus personnel would eventually be driven to no other choice but to plead for the resources to at least self-sustain. Instead of doing this, they try to utilize democracy to secure funding to avoid the need to take up the most basic menial forms of neccessary labor.

WhoWee

Competition will always be the equalizer - and present on both the supply and demand sides.

brainstorm

It could be, but there are reasons why it doesn't work out that way. Consider dividing people into two teams: 1) the Scrooges; who consume and spend very little and end up with lots of savings to show for it and 2) the Live-it-ups; who want to use their economic means to enjoy themselves instead of conserving and saving all the time. Theoretically, competition between the two types of consumers would result in the Live-it-ups being forced to conserve and save to avoid bankruptcy since the Scrooges would obviously not be spending much money on them when they ran out. However, the Live-it-ups may figure out ways to convince the Scrooges that they should invest in businesses that Live-it-ups spend their money in, so as to make more money. By doing this, the Live-it-ups could maintain their high-spending lifestyles while getting the Scrooges to perpetually fund them. Of course, this would be risky because the Scrooges might eventually get tired of investing in enterprises that cater to Live-it-ups, and then what would the Live-it-ups be able to do except adopt the conservative lifestyles of the Scrooges?

WhoWee

Wouldn't competition on the supply side increase production to meet the consumption needs of the Live-it-ups?

brainstorm

It should, if resources are sufficiently abundant and demand sufficiently low to be relatively non-competitive. Once the Live-it-ups reach a standard of consumption high enough to generate scarcity and competition for access to that consumption, price would rise until a sufficient number of Live-it-ups are excluded from consumption to ensure a balance between resource-availability and total amount produced/consumed.

However, seeing prices rise due to competitive consumption, the Scrooges would invest in the profit-industries that service the Live-it-ups and save the money they make. This would gradually result in the flow of money decreasing, at which point the Scrooges would have to decide whether they wanted to keep investing in the consumerism of the Live-it-ups for a lower profit. They might decide that the lower levels of profit were not worth the resource-waste and decide to invest in more resource-conservative industries.

Of course, the Live-it-ups would resist and try to bolster their shrinking lifestyle industries by making them profitable again, perhaps by distributing fiscal stimulus money and otherwise trying to drive up revenues and income to levels that would sustain lots of jobs and consumer spending.

WhoWee

It's not logical that Live-it-ups would want to pay higher taxes - to enable stimulus funding - is it?

brainstorm

They would if they got to the point of believing that "living it up" was more important than money itself and if they had faith that the economic machine they created by doing so would never hurt them in any way. They might, like during fascism before WWII blame a certain religion/class/race of people for being Scrooges and believe that if they just eliminated or intimidated them into investing all their money into the high-consumption economy, that it would continue working forever. Of course, by doing this they would set a fascist precedent that would result in periodic eliminations and/or other population control to ensure that a high standard of consumption was available to all. If they didn't want to get their hands that dirty, though, they could just exclude a certain class of people from their standard of living and prevent them from saving and otherwise acquiring greater economic power.