How Does a Free Market Prevent a Monopoly?

[Al68]

Im referring to this statement, which is not a negative.:

Monopolies have existed in relatively free mixed economies like the U.S., but only with the aid of government.

I don't think its supportable.

Sure it's a negative, since it asserts that there are no examples of a monopoly existing without government aid, which can't be proven. What if I reword it to say "There are no monopolies that were not aided by government"? The support lies only in the lack of evidence of any such examples existing.

It's similar to claiming that there are no cows that can fly. I can't prove it, but there are no examples otherwise.

 

[Al68]

Al68, you need to substantiate your claim that the government gave Standard Oil substantial aid to facilitate the growth and formation of the monopoly...
Ie, the concept of a "trust" was developed by Rockerfeller for the purpose of circumventing legislation to limit the size of companies.

Well, you just gave an example of legislation that "aided" Standard Oil significantly, even if it's not obvious to everyone that it was beneficial to Standard Oil. Their competitors were effectively limited by the legislation while Standard Oil circumvented it.

In other words, you gave an example of legislation that kept Standard Oil's competition from being competitive.

I'll try to find some links to info about the government loans, land, and other examples related to Standard Oil.

 

[Al68]

My argument is still the same. What difference does it make if all people engaging in business are treated the same way? Laws that apply to all individuals whether or not they are engaged in business are just as restricting of freedom of enterprise as ones that only apply to people who are engaged in business.

Yes, either way, everyone's freedom is restricted. But there is a distinct advantage to equality under the law.

Owning a business is an element of circumstance, it is not fundamental to the person.

I've already pointed out that it's not in the same category as racial discrimination, etc. I never meant the phrase "treated differently" as any reference to that sort of different treatment. Obviously people are not born owning a business or not, they have a choice. It's not like it's impossible to be "treated differently" for reasons that are not fundamental to the person.

So a company that raises, slaughters, and distributes meat from several cows a year should have no more expectation placed upon them to make sure the meat is safe than a man who owns a single cow and eventually slaughters it for meat once it is no longer giving milk? Even though by circumstance the company is far more likely to wind up with tainted meat? Or would you require the man who by circumstance is significantly less likely to wind up with tainted meat to go through the expense of having it tested?

I already addressed this. A law that required every tenth cow to be tested would allow both to sell the first 9 untested. But if it's that important that every single cow be tested, then yes, the single cow owner's cow should be tested if it's sold. Either it's important that every cow is tested or it's not.

My dispute between myself and my neighbour is private. Theoretically my actions, whether it be shooting punching or yelling at them, may have an impact on society and so it is deemed in the interest of society to have such 'private' interactions regulated by law.

That's not a private interaction. The dispute may be a private one where government should not be involved, but the shooting of someone is not. Similarly, a companies internal operations may be private while their external actions may not be.

 

[russ_watters]

Well, you just gave an example of legislation that "aided" Standard Oil significantly, even if it's not obvious to everyone that it was beneficial to Standard Oil. Their competitors were effectively limited by the legislation while Standard Oil circumvented it.

In other words, you gave an example of legislation that kept Standard Oil's competition from being competitive.

I'll try to find some links to info about the government loans, land, and other examples related to Standard Oil.

That isn't good enough, Al68. Previously, you asserted (or seemed to assert) a direct link between government regulation and the rise of monopolies (that the government helped create the monopolies via the creation of a regulatory framework that aided their existence) - now you are only asserting the government failed to successfully prevent it, which is a very different assertion. Failure to hinder is not the same as actively helping. You need to substantiate or retract that previous assertion of the government actively working to help create monopolies as it is central to your thesis in this thread. What you are now saying about Standard Oil is in direct contradiction with your asssertion that monopolies cannot arise in a free market. The government did exactly the opposite of what you are asserting it did: the monopoly arose in spite of efforts to prevent it. This is prima facia evidence that monopolies can form in a free market: they can even form in a market that it set up with restrictions against them.

An example of the former would be (formerly) AT&T and the power companies, which are government sanctioned/sponsored monopolies: the government purposely helped create these monopolies because it recognized that large public utlities must have centralized/standardized infrastructure to function.

 

[Al68]

Well, you just gave an example of legislation that "aided" Standard Oil significantly, even if it's not obvious to everyone that it was beneficial to Standard Oil. Their competitors were effectively limited by the legislation while Standard Oil circumvented it.

In other words, you gave an example of legislation that kept Standard Oil's competition from being competitive.

I'll try to find some links to info about the government loans, land, and other examples related to Standard Oil.

That isn't good enough, Al68. Previously, you asserted (or seemed to assert) a direct link between government regulation and the rise of monopolies (that the government helped create the monopolies via the creation of a regulatory framework that aided their existence) - now you are only asserting the government failed to successfully prevent it, which is a very different assertion.

You must have misunderstood, I never said that government only failed to prevent it. You gave an example of legislation that actively helped Standard Oil, not just fail to stop them. And in the case of your example, the help was indirect, not direct. Standard Oil successfully circumvented it completely, while its competitors didn't. The actual net result was (indirectly) beneficial to Standard Oil by its (direct) negative effect on their competition.

Any government action that in any way negatively effected Standard Oil's competition indirectly helped Standard Oil. Is that not obvious?

Failure to hinder is not the same as actively helping.

I agree

What you are now saying about Standard Oil is in direct contradiction with your asssertion that monopolies cannot arise in a free market. The government did exactly the opposite of what you are asserting it did: the monopoly arose in spite of efforts to prevent it. This is prima facia evidence that monopolies can form in a free market: they can even form in a market that it set up with restrictions against them.

I never said a monopoly couldn't form in a market when government (unintentionally) helps one by its "efforts to prevent it." "Efforts to prevent it" is not the opposite of "unintentionally helping it".

A monopoly forming while government is trying to prevent them is obviously not evidence that a monopoly could form in a free market. And the "intent" of the regulation is completely irrelevant. Obviously actual effect is often very different from intended effect.

 

[russ_watters]

You have been given ample opportunity and failed to support your assertion. TheStatutoryApe, you have your answers: Monopolies are not prevented by free market economics and specifically, Standard Oil was not enabled by legislation, it arose naturally and was only failed to be prevented by legislation.

Thread locked.