> Since older firms, tend to be larger, slower growing, and less competitive, it's not wonder we've seen an increase in monopolization.
This is self-contradictory.
This is self-contradictory.
Firms that are monopolistic are less competitive, larger, and slower growing. Reducing monopolistic tendencies increases capital growth, competition, and reduces average firm size. This is well understood economics.
Monopolies arent' some hypercompetitive ultra capitalist battlespace, they're fat and happy, and the most impactful teams they employ are lobbyists and policy folks in DC. Look at like, comcast and what they did with the FCC.
This is why the solution of making the government ever more powerful isn't going to work.
https://techcrunch.com/2019/10/04/snap-ceo-isnt-expecting-mu...
Licensing, permits, etc, are all ways to limit and prevent competition.
"The AMA strictly controls the number of seats, and the government has a medical licensing process, therefore the AMA's actions are the government's fault."
Nope.
https://www.amazon.com/Competition-Monopoly-Medical-Care-Fre...
Plenty of evidence and cites.
And once a company does build a network, absent government regulation requiring them to let other companies use it, the existing infrastructure is an enormous barrier to entry.
Before the government stepped in to anoint winners and losers in the phone business, companies sprang up everywhere and strung their own wires.
There is no history of a successful, large scale infrastructure project built without government assistance. Either directly or due to the fact that much of it was built on government land.
(unless maybe you consider some case where private infrastructure was built in one large area controlled by a small group of owners, but that's basically just a government by another name and doesn't apply to modern America.)
Even so, a railroad is private property and they can choose to allow or not someone stringing wires along it.
It's hard to argue that the railroad builders were not given "assistance" (the granting of land).
I think it's reasonable that people should have local control over their city environs, even if it means a multinational like Google can't come in and build new infrastructure. It's not a "will of the people, unless Google wants to build fiber huts everywhere" kind of society. Maybe they should just go surfing instead.
This is an idealistic line of thinking, but as a practical matter, is completely untrue. Essentially 0% of America understand their county commissioners' stance on ISP competition, myself included. No one campaigns on those things.
It's a lot like saying that electorates are responsible for police violence because sheriffs are elected officials after all.
Oh? Network effects don't exist? Economies of scale don't exist? Dumping doesn't exist? Branding doesn't exist? The only kind of moat in existence is regulatory capture?
Regulatory capture is real, but it's one of many tools that suppress competition. I can think of one single solitary competitive analysis I've been party to where we decided it was the largest factor.
If only fixing anticompetitive markets were as easy as "drowning the government in a bathtub" we'd have solved this problem ages ago.
I didn't say "only".
For example, if I said "Star Wars" was "the movie" to see in 1977, I obviously did not mean it was the only movie.
If I meant it was the only tool, I would have written "the only tool".
If you need to insert the words "only", "always", "never", "100%" into my words in order to argue, you should reconsider the strength of your argument.
Even so, I'm happy to engage with your new argument: that regulatory capture is the first tool companies reach for to unfairly suppress competition. That's still wrong. Regulatory capture is slow, unwieldy, and opportunistic. The first tool a company reaches for is typically either M&A or dumping.
When WhatsApp was getting popular, did Facebook respond by crafting legislation with a plausibly deniable dual purpose, cultivating connections with campaign contributions and a held-open revolving door, wait for a wave of public sentiment that could carry their law up the priority list, through congress, and onto the books, and then sit back and pray that the resulting wind blowing at their backs and in WhatsApp's face would tip the balance enough to keep them on the throne? No, of course not! Facebook bought WhatsApp. Where there were two competitors, a free market exchange happened, and then there was one competitor. See also: banks. Yeah, they need FTC approval, but the free-er the M&A market, the easier it is for competitors to just merge together, and the more anti-competitive the result.
As for dumping, you'll often hear people blame legislation for the big ISP monopolies we have. Certainly there are no shortage of legislative failures in this space, yet it's not illegal to start an ISP. If you set out to create an ISP of your own, you'll probably be able to find a municipality willing to deal with you. The actual trouble will appear when you start selling your service. Your first few customers will gladly switch in order to take advantage of the better deal you're offering, but once the regional ISP monopoly notices the churn, suddenly you'll find that all of your prospective customers recently received a promotional discount from the monopoly and are no longer interested in your service. Then you go out of business, and customer rates go back up. It wasn't a law that kept you out of the market, it was the fact that your competitor had a larger war chest.
In both cases, more market freedom = less competition. Certainly, regulatory capture also exists and is also a problem, and in that case more market freedom = more competition. In some cases, it's even more complicated: economies of scale create genuine value by amortizing costs across volume, but they also create an anticompetitve moat. They have good aspects and bad aspects that are inextricably linked and inseparable from each other.
Still, focusing exclusively on regulatory capture will lead you to misdiagnose most markets. The cure will appear obvious, but where your diagnosis is incorrect, it won't work.
The distinction is that there are plenty of other tools companies can use to suppress competition, and Government also can be used as a tool to encourage competition.
A strict black and white view point that more government = less competition is absurd.
Yes, and fortunately I didn't say otherwise.
Take away the government's power to suppress competition, and they'd still have and use many other tools.
Attacking the government is a distraction that's quick, easy, and wrong, like blaming surfers for the tsunami washing over the city.