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Comment by Geisterde | Hacker News Reader

By the time the lawsuit against standard oil had concluded, they had lost market share, because price fixing doesnt work in real life, as more than a few industrialists have had to learn the hard way. Rents and mortgages are too high, but you are looking in the wrong place thinking housing costs are high due to price fixing.

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> price fixing doesnt work in real life

Yeah you're gonna need some pretty strong support to make a claim like that - and not just an anecdote from the internet. Do you have any new proof upending long solidified economics?

Do you have some papers to back up the claims that price fixing doesn't work?

Sure, I would recommend you start with "basic economics", 5th edition, by thomas sowell.

I would recommend going beyond Econ 101, as well as observing the real world and reams of empirical evidence. Housing is not a perfectly competitive market for widgets with an abundance of sellers where everyone has perfect information and there are no transaction costs. "(illegal behavior X) could never happen because markets" is freshman dorm at UChicago thinking

Are you speaking in the long term?

Because it certainly works over decades-term.

Standard still had 70% market share when it was charged, and 64% by the time it was broken up.

Over the ~40 years it existed, it was incredibly profitable.

I submit that the long term issues we are having in the united states, are in fact the result of short term solutions. Also, standard oil controlled more like 90% of the market, so in that context they had lost more like 25% by the time the trial concluded.

64% is still an incredible pricing and profitability position. Most firms would kill to be in such a situation!

Apple has, what, 20% smartphone market share?

And look at the margins they're able to run. Granted, boosted by platform lock-in.

Except, at 64% its not really fixing prices, is it?

Your assertion was "price fixing doesnt work in real life".

I offer that if you get to fix prices for a good chunk of 40 years, and then still end up with 64% market share... it does work.

In the sense that your company will have made obscene amounts of money, by price fixing, while the above played out.

If your rebuttal is that in the end they lost market share, true. But they made enough money before that happened that it's still a win.

I'm pretty pro-market, but Standard Oil used a lot of techniques to fix prices. Having a lot of refinery control and the ability to undercut anyone who didn't play ball with them (and thus kill the small independent) did happen. They didn't need a true monopoly, just enough power to tank any smaller company that tried to undercut them.

If you're interested in the subject, The Prize: The Epic Quest for Oil, Money, and Power by Daniel Yergin is a fascinating read.

I am not finding the phrase price fixing anywhere in that book. Am I holding it wrong?

Its a book on basic economic reasoning, price signals, competition, those things are covered from a principled basis, sorry if it doesnt ctrl+f to tell you how irrational the idea of price fixing is.

You make an interesting point. While the concept is never introduced in the book, the sum total of the information of the book is that price fixing doesn’t work.

How do I square that with the lesson that I learned from the Bible? While price fixing is not mentioned in it it is pretty clear that it says that price fixing works

Well, I wouldnt belittle you for getting your economic education, the bible, Qur'an and others have discussed some economic matters; though, it may be advisable to consult one of the best economic textbooks regarding economic matters.

I did, and it’s obvious if you read it that it says price fixing works. It is a lesson that becomes clear when you read the book cover to cover

You know, maybe some people arent cut out for economics, but, the spirit of rothbard compels me, economic education is for the masses so I will provide a quote from chapter 2, prices and cost subsection.

"While you may put whatever prices you wish on the goods and services you provide, those prices will become economic realities only if others are willing to pay them, and that depends not on whatever prices you have chosen, but on how much consumers want what you offer, and on what other producers charge for the same goods and services."

So, maybe the 6th edition could be better equipped for ctrl+f economists, with all the communist propaganda words indexed to subsections.

We both agree that price fixing does not need to be mentioned in a book for that book to be clearly obvious in its position on it, and also that any book that mentions anything tangential to price fixing can contain an immutable and unarguable truth about it that becomes apparent only to those with the intellectual capacity to glean its hidden meanings.

I’m not really sure why you would impugn my mind for economics but perhaps since “read a book” qualifies as an argument, I might recommend that you try out The Living Bible? It is written in a plain English for those that may struggle with the vocabulary of the King James Version. There is no shame in not being able to get the clear and obvious message here, but thankfully the Good Book has versions for every level of reader :)

Oh, my bad, I assumed you were trying to be belligerent on basic economics not containing this information. Id actually be happy to adopt just about any world religions economic regulation, as opposed to what we have today.

We’re not discussing religious economics writ large. We’re discussing your book’s position on price fixing and my much more popular book’s position on price fixing.

I look forward to hearing your thoughts after reading it!

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