As an engineer with a math degree, this all seems like unnecessary complexity, imposed by a pro-complexity politician in the interest of preventing feigned-natural-selection of markets from evolving a proper fit solution.
What am i missing?
What am i missing?
Google, Facebook, Amazon, etc. do not "own" anything. They are businesses that exist in a fiercely competitive environment in which consumers have zero loyalty and will gladly switch to the next hot thing at the drop of a hat. These businesses are successful because they continually innovate and deliver products that people want. There's no guarantee that any of these companies will still be around in a decade, much less "own" the market they operate in.
And monopoly regulation put an end to that and allowed Netscape to come in and make it a competition.
It was really an absurd case considering that 100% of internet users use a free browser these days.
Netscape was selling their browser before Microsoft got smacked down by the DOJ.
In fact, Microsoft's bundling of IE with Windows was some of the strongest evidence showing that they were abusing their market position. By bundling a free alternative they basically destroyed the market of for-pay web browsers, and killed off Netscape while they were at it.
Also, even if we wanted unregulated capitalism and natural selection of markets, we would need to first eliminate the existing monopolies, oligopolies, and externalities, since they all cause market failure.
Trade in the market creates wealth. The efficiency of the market lowers the costs of goods. These two things work together to make everyone richer.
> Also, even if we wanted unregulated capitalism and natural selection of markets, we would need to first eliminate the existing monopolies, oligopolies, and externalities, since they all cause market failure.
Market failures are only made worse by government intervention. Unforeseen negative consequences distort the market which causes more problems.
Yes, I agree. That's basically why politics exists.
> Market failures are only made worse by government intervention.
This is a blanket statement that doesn't really make sense. There is no way to correct externalities without regulation, right? Genuine question, I am obviously not an economist. Government intervention distorts the market, which is desirable in some cases. This seems like a pretty uncontroversial statement. There would be a market for paid assassinations, but we've made that market "worse" by outlawing them. I feel like it's impossible to argue that the market is always "right".
> Unforeseen negative consequences distort the market which causes more problems.
Government intervention doesn't have to be unforeseen. Good regulations are announced in advance, and businesses are informed during the legislation process and given guidelines to adapt and comply.
> Government intervention doesn't have to be unforeseen. Good regulations are announced in advance, and businesses are informed during the legislation process and given guidelines to adapt and comply.
You seem to not understand what is meant by "unforeseen negative consequences". These are results of a policy which weren't foreseen by the proponents of that policy. Often, policies meant to have positive_effect_A have negative_effect_B, C, D, etc. Sometimes they entirely fail to have positive_effect_A and even have the opposite of that effect. Rent control is one popular example (meant to reduce the cost of housing for the poor, but in reality raises the cost of housing by reducing the supply). Sometimes nobody sees these issues coming, but often opponents of the policy point out these problems but the policies are pushed through anyways, due to emotional support.
Now for the rest
> This is a blanket statement that doesn't really make sense.
Yeah it is a little too absolute, I should have said "Market failures are rarely improved by government intervention, and often made worse".
> There is no way to correct externalities without regulation, right?
Common misconception. Often externalities are caused by government policy in the first place, so reversing that policy can fix it. Another option is increased liability tort law: allow individuals to sue for damages and you'll quickly see companies make changes.
In my opinion, one of the policies with the most negative consequences is the creation of "limited liability corporations". Of course when the owners and operators of a firm aren't liable for the actions of the firm, they don't have a vested interest in instituting internal policies to limit the firm's harm.
> Government intervention distorts the market, which is desirable in some cases.
Desirable to some, again it's subjective. Often distortion is created and used by rent-seekers at the expense of everyone else.
> There would be a market for paid assassinations, but we've made that market "worse" by outlawing them.
Assassinations are in an entirely different class of action, one which is not part of an ideal free market. A free market is one in which all interaction is purely voluntary. Violent crimes, fraud, theft, etc are actions in which the victim did not consent.
Actions which violate consent should be illegal, and the justice system should be focused on taking every possible action to make the victims whole. This is different from how the justice system currently works, which is focused on punishment of criminals rather than reparations to victims.
Market failures result from actions which do not violate consent but do still cause harm to a third party. Air pollution is one strong example, and regulations for that (and other forms of pollution) are the most justified regulations IMO.
People will also bring up "natural monopolies" and "oligopolies" when talking about market failures. However, there is very little evidence of a hostile monopoly or oligopoly ever existing without government assistance, while there are countless examples of cartels failing and diseconomies of scale destroying large organizations.
> I feel like it's impossible to argue that the market is always "right".
Because "right" is subjective, that is impossible. There are things like so-called "price gouging" in disaster situations which many people perceive as wrong, but in actuality are a necessary signalling behavior of the market in order to allocate more resources to those areas. Banning such things only results in shortages which _do have_ measurable negative consequences.
We can look at metrics like cost-of-living adjusted standard of living, inequality, innovation, economic growth, etc and all of those correlate strongly with how free an economy is.
I am having trouble putting my thoughts in order to respond. One thing I can say is that I agree with your criteria for justifiable regulations, I think I (and Elizabeth Warren) just have a much more expansive definition of "harm to a third party". I think a lot of important harm is not captured by metrics like average standard living and economic growth and "innovation", and I was unable to find any correlation between inequality and the Fraser Institute's economic freedom ranking.
> There are things like so-called "price gouging" in disaster situations which many people perceive as wrong, but in actuality are a necessary signalling behavior of the market in order to allocate more resources to those areas. Banning such things only results in shortages which _do have_ measurable negative consequences.
It doesn't make sense to talk about appropriate market behavior in a disaster situation, which can never be a functioning free market. In a disaster, buyers are forced to buy immediately, they cannot shop around, compare products, and choose not to buy if the price is too high. A key feature of a free market is that nobody is forced to buy or sell. High prices are only an effective signal when there is a low barrier to entry to enter the market, and willingness to pay roughly correlates with need. Neither of these are true in a disaster.
This is similar to healthcare, another "market" that by definition cannot be free and should never be treated as such. Participants are coerced into buying, knowledge about quality and price of goods is hidden from buyers, comparison shopping is impossible in an emergency, and ability to pay has nothing to do with need. A market cannot function when many mandatory purchases cost more than many participants' net wealth.
There have been quite a few technology IPO's over the last couple years and I'm sure many of these companies were approached by incumbents but did not sell. And some of these companies will become giant slayers.