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Comment by NonNefarious | Hacker News Reader

Or the oligopolies that are allowed to operate unfettered in the USA.

I doubt the lightbulb cartel is still a thing. While oligopolies and monopolies exist, it's not the answer to every inflating article.

>> Or the oligopolies that are allowed to operate unfettered in the USA.

> I doubt the lightbulb cartel is still a thing. While oligopolies and monopolies exist, it's not the answer to every inflating article.

An oligopoly doesn't have to also be a cartel, it just has to have few competitors.

I think the GP is complaining about how the US as pretty much allowed any market consolidation short of outright monopoly for a long time, which means a lot of companies have too little competition and therefore too much market power.

Is an oligopoly that isn't a cartel problematic? If the lightbulb manufacturers jack up their prices, how long can that last until new incumbents come around and compete margins away?

You know what people hate more than oligopolies? High prices. Consolidation is not de facto problematic. Unless said consolidation leads to cartel-like behavior or entrenching regulations (which even Adam Smith recognized as a problem and a propensity of elites, I'm not arguing in favor of laissez-faire capitalism), margins will be cyclical in a free market and colluding oligopolies will eventually face new incumbents, because high margins attracts competition and investments.

There are exceptions like markets where cost is prohibitive for new participants, say telecom (hello Rogers-Bell-Telus), but I don't see how that applies to lightbulbs in the 21st century.

Well that shouldn't come at a surprise since U.S. antitrust law is aimed at protecting consumer interests, not protecting competition.

> Well that shouldn't come at a surprise since U.S. antitrust law is aimed at protecting consumer interests, not protecting competition.

And a lot of people are now questioning the wisdom and effectiveness of that approach.

Also a, "that shouldn't come [as] a surprise" response doesn't really address anything in this subthread. I don't think anyone is surprised that was the approach that was taken or its result, they just disagree with it.

> I don't think anyone is surprised that was the approach that was taken or its result, they just disagree with it.

You mean you disagree with it, despite there being many markets where less competition doesn't hurt or even benefits the consumer.

Also, addressing the tone or being grammar nazi doesn't add much to discussion.

I'll put this as simply as possible: you didn't understand what I wrote, but chose to respond anyway.

A 'you didn't understand what I wrote' response doesn't really address anything in this subthread.

Of course it’s still a thing.

Why wouldn’t it be?

Because manufacturing lightbulbs today is a well established process and basically any manufacturer can produce them if they so chose, as opposed to 1925's situation. It also quite empirically is no longer a thing as LED bulbs can last up to 100k hours [1] and are often rated for 50k [2], as opposed to the cartel's 1k [3].

1: https://www.inlineelectric.com/lifespan

2: https://www.bulbs.com/learning/ledfaq.aspx

2: https://en.wikipedia.org/wiki/Phoebus_cartel

You don't seem to understand how modern markets work. See for example Coca-cola. Anyone can create a drink that looks like Coca-cola. However, we know it has a near monopoly on that segment of the market. Just because a product can be manufactured, doesn't mean that companies have the capacity to create and produce it at the scale needed to become profitable.

That's a separate subject to anti-competitive oligopolies. Let me doubt people are loyal to lightbulb manufacturers and that the situation is remotely comparable to one of the most powerful and well established consumer brands in history.

But since you brought up this subject, why should I care consumer brands are exercising their pricing power for as long as I have access to the low-margin alternatives? People paying $5 for takeout coffee at Starbucks doesn't affect me in any way. It would affect me if Coke and Starbucks prohibited the existence of competitors or extinguished them, but that isn't the case (for these examples at least, such anti-competitive behaviors do exist) as you have yourself implicitly noted in your comment.

> It would affect me if Coke and Starbucks prohibited the existence of competitors

In a sense they do, every Starbucks in existence is a store where a traditional coffee shop cannot be stablished. How many more Starbucks it takes to completely shut other competitors out of the market?

I don't think it's useful to debate fictitious scenarios. You know of a place where there are only Starbucks selling coffees? I can't think of one, as someone that never steps in a Starbucks, yet often buys takeout coffee in other fastfoods.

On the contrary, Starbucks is frequently -- maybe even usually -- the only place in a given area that serves fresh coffee of fair to moderate quality. You can get coffee in McDonalds or Burger King, but it's not very good, and the employees know even less about coffee than someone working for Starbucks. The absence of competition in that midrange market means that Starbucks faces relatively little pressure to maintain lower prices and higher quality.

I can only think of a single other dedicated coffee shop near my suburb of Cincinnati, and it's a cat cafe that serves dogshit coffee (or catshit, I suppose, and I'm not referring to the civet). At least they have cute adoptable cats to play with!

I didn't say it was. But the four meat producers raking in 40% higher profits while whining about a labor shortage should be top of the docket for any politician claiming to want to "do something" about inflation.

Isn't the baby-formula fiasco yet another wake-up call?

While we're at it, let's stop burning our food. Growing (and subsidizing) corn for fuel is asinine.

socialists in 2019: "evil oligoplies are driving down prices unfairly meaning local businesses cant compete and are forced to close"

socialists in 2022: "evil oligopolies are raising prices unfairly causing inflation"

havent found one that could explain why they didnt "collude" to raise prices in 2008-2019.

whereas its quite clear what caused the high prices was rather insane govt spending caused by socialist policies.

1. Between 2008-2019 they just didn't realize they could. I have found the years you quote to be high priced. Competition just went done in every sector I depend on. Banks, cell phone companies, cable, energy prices went up without inflation, etc.

2. The minute we started talking about inflation, every company in my life took advantage of it--overnight.

3. I'm with you on the government spending. I understood the money thrown at Covid, but that's done, and the working poor will never see those checks ever again. And I'm no fan of the Infrastructure Bill.

4. If you don't wonder why gasoline prices fluctuate by a dollar hourly at some stations, while making record profits; I don't know what to say.

5. Every large company made record profits during Covid, and we don't know why? They didn't lower prices.

Again the $300 extra per week for unemployed people affected by Covid was a one time thing. Companies might get free money as usual, but not the little guys.

It was conservatives (Trumpy) that passed first 2 trillion stimulious package.

America has just a few badly run "socialist" programs.

I think we all have seen our homeless population get bigger each month.

Oh yea, federal government programs. Basically (Cal-fresh, and medi-cal)have gone back to make qualifying very hard.

You are spot-on about your criticism of oligopolies as an explanation. But for your theory, you have to explain the absence of inflation from 2008-2019. It's not like government spending was sane during those years...

Take a look at the stock market, housing, education and medical from 2008 to 2019 and tell me there wasn't inflation.

https://datalab.usaspending.gov/americas-finance-guide/defic...

^^ that chart.

also, giving people money directly with stuff like unemployment and stimulus checks is extremely stimulative compared to say building a bridge.

massive supply shocks didnt help either. but they govt knew there was supply shocks and increased demand anyway. despite warnings by democratic economists. (we just found out yellen herself had misgivings about the 1.9T price tag)

The core aspect of socialism is the means of production and the fruits of labor [and exchange of all this] in the hands of the people. Only the distribution part are what any safety net programs are about. I assume socialist policies means govt programs.

The people you’re referring to would not be saying companies are taking advantage of the zeitgeist and raking in bigger profits knowing inflation talks will take all the blame or straw manning like your 2022 line. Gas prices rising so much providing incredible profits is an obvious example of this.

No one in the White House or Senate are socialists. Bernie is like the Nordic model: capitalism + large safety nets + govt programs. The senate has been in republican control or with the useless Dem leaning current situation with too many conservative Dems. Trump’s regime did some of the biggest “socialist policies” spending. It is wild to assert the right pass socialist policies.

isn't the whole "walmart cycle" of "aggressively undercut local businesses until a monopoly has been established, then increase prices once you have control of the market" pretty well-established at this point? you're phrasing the two halves of that cycle as if it's supposed to be some sort of a contradiction.

Applies to Amazon too nowadays.

no actually walmart has been keepign their prices low. thats paritally why they took a massive stock hit in may. (same with target).

guess its just a coincidence that they chose now to do it. and not 2017

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