Here is the latest EconTalk—Don Boudreaux makes the case for getting rid of antitrust laws. It seems a hard case to make but Don points to evidence that the genesis of antitrust was not consumer protection and that large enterprises often bring lower prices rather than higher ones. He has much more to say. Check it out.
Meanwhile, I’m reading parts of Capitalism, Socialism, and Democracy as I prepare to interview Thomas McCraw for next week’s podcast. He’s the author of a recent bio of Schumpeter, Prophet of Innovation. Here is Schumpeter on the claim that the monopoly power of large enterprises at the end of the 19th century must have exploited consumers:
If we list the items that enter the modern workman’s budget and from 1899 on observe the course of their prices not in terms of money but in terms of the hours of labor that will buy them, i.e., each year’s money prices divided by each year’s hourly wage rates—we cannot fail to be struck by the rate of the advance which, considering the spectacular improvement in qualities, seems to have been greater and not smaller than it ever was before…As soon as we go into details and inquire into the individual items in which progress was most conspicuous, the trail leads not to the doors of those firms that work under conditions of comparatively free competition but precisely to the doors of the large concerns…and a shocking suspicion dawns upon us that big business may have had more to do with creating that standard of living than with keeping it down. (Capitalism, Socialism, and Democracy, Third Edition, pp. 81-82)
Why were the Robber Barons so generous? Why did the workmen of the day have a higher and higher standard of living? One answer is that the robber baron’s feared regulation and a political backlash. Another is that they weren’t robber barons after all, they were selfless people who wanted to help others. The third answer and it is the answer of Schumpeter, (and Don Boudreaux) is that the robber barons faced competition or at least potential competition. At a point in time, they had monopoly power. But rather than exploit it and invite competition, they chose to expand their profits via lower prices rather than higher ones.
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"a shocking suspicion dawns upon us that big business may have had more to do with creating that standard of living than with keeping it down."
That same shocking suspicion dawned on the collectivists which took the suspicion to the logical conclusion that one giant monopoly (run by the government) would bring even high standards of living, not to mention heaven-on-earth.
It's rather hard to argue that big monopolies are beneficial but one ultra huge monopoly is not.
Bret,
The difference is not that government is running a monopoly, but that government can use laws to eliminate competition. The Robber Barons could be monopolists, but they also had to watch out for the little guy who does things better that starts up. Most often the Robber Barons would buy the little guy out, enriching him and showing people that innovation is rewarded. The government, on the other hand, would just outlaw or wrap the guy up in red tape, showing people that innovation is a sure way to get the government knocking on your door and causing trouble.
It is not the monopoly power of the Robber Barons that made them successful but the attitude of success and the determination that forced them to deal with innovation in a beneficial manner for the rest of the people.
To add to what trumpetbob is saying, it is also the case that many monopolies cannot sustain themselves because technology renders their products obsolete.This is the other sense in which competition aids consumers, and also one in which is absent from government.
To think of all of the creativity, innovation and progress in private markets is just amazing, but it is equally amazing to think of how little innovation, creativity and progress we have seen in the political arena over the past 200 years. Is there any area of government that has gotten better over the past 100 or 200 years?
The only things I can think of are things like the ability of the US military to track down and kill kill people with fancy weapons. And why is that? Because that is an area where there is defacto competition from "our enemies."
It is astonishing that the phrase "Robber Baron" has not been applied to the political class. At least the Robber Barons (granting their guilty greedy behavior) had to produce something of value in order to get in the positions they were in.
So you're saying that as long as the one ultra huge monopoly is not owned or controlled by the government, then that's fine? In other words, suppose the GE (which already has a larger GDP than many countries), through perfectly fair competition, merger, and acquisition, became 99+% of the economy but remained seperate from the government. That'd be fine by you?
Yes.
Bret,
If GE owned 99+% of the economy and I could start my own business to compete with them with government protecting my right to start a business, then I don't think there would be that big of a problem. However, the potential for any company to take over such a large percent of the economy is remote, mainly because economies of scale work well, but there is always a limitation. Be it from a start-up network competing with NBC to a new form of lightbulb patented by a small-town guy working in his garage, the potential for competition will put an ever increasing amount of pressure on a company to stay competitive. Eventually, one division will choose to coast rather than improve and the door will open for the little guy. Maybe he won't impact the company very much, but just the potential of his entry will force any monopolistic company to look over their shoulders while improving the lives of the little guy's customers and/or potential customers.
While it may be correct that antitrust law was not original "intended" to achieve consumer protection, it could just be that it nonetheless achieves it. (I'm not really of the mind that it's generally possible to know what the "intent" of a law was. They are generally compromises without a discernible intent.)
Csse in point: Horizontal price restrictions. Pretend that on Route 100, there's one exit in the middle of a national forest — the only exit for 50 miles in either direction. By a historical quirk, two plots of land at that intersection are privately owned, each with a gas station on it.
Should the two owners of the gas stations be able to agree on what they're going to charge? It's probably an antitrust violation if they do.
Bret,
When GE takes over even one percent of the economy, then you'll at least have a straw man of substance.
Find me a single company in the world that has as much as five percent of it's nation's economy, and I'll show you a government-protected racket.
Chris,
So, you're willing to support our entire government antitrust infrastructure, and the sand that it unarguably throws into our economic machinery (less so today than before only because of weaker enforcement), just to prevent examples like that? Could you have come up with anything more contrived?
M. Hodak,
For 2006:
GE Revenues: $0.1571 trillion
USA GDP: $13.16 trillion
Ratio GE to USA GDP: 1.15%
Apparently, it is at least a straw man.
Now will you answer my question instead of avoiding it?
OK, Bret. Actually, Wal-Mart would be a better example of over $0.25 trillion, especially since the vast majority of their sales are in the U.S. (unlike GE, which is much more spread out around world). I still suggest you have nudged into straw man territory–nowhere near close enough to take your question seriously.
Thomas Sowell does a fine job of debunking commonly accepted "truths" about monopolies. One of his examples — the A & P chain of supermarkets — was completely dominant for many years in the United States. Of course, the name has virtually disappeared since then. How is that for market "control"?
The fact is, in a free economy, no company "controls" anything, even if in a given year its sales account for 70%, 80%, or ever 100% of a given market.
M. Hodak,
I came up with it because it's a short and easy example of a clear case.
But, ok, here's another example: the State Bar publishes minimum price schedules and then published ethics opinions that say that such price schedules "cannot be ignored." As a result, it is impossible for any potential client to pay less than the published fee schedule.
There are a million variations on that one — doctors, realtors, engineers, etc…. I'd argue that there's real consumer harm there. And, incidentally, it's an antitrust violation.
If you're arguing that because there are so few real situations, antitrust law isn't worth its burden, you may have a point. If you believe that there are no real situations, I don't think you do.
Chris,
Did you notice that each of your examples is founded on government licensing requirements that support these practices?
I am arguing that there are relatively few real situations that don't include government support, and those real situations tend to be transient.
Bret,
The Calculation Problem says that governments cannot efficiently allocate resources because they do not have a profit motive to tell them when an allocation makes economic sense. But, the Calculation Problem doesn't just apply to governments, but to any suffciently large organization. One gigantic corporation would suffer the same resource misdirection that a government would. Because of that misdirection, the corporation grows inefficient and uneconomic.
GE is no exception. GE relies on the many subsidies to size that exist in the corporate state, especially subsidized communications and transportation. Also, GE indirectly benefits heavily from the state through its GE Finance sector, finance being heavily regulated and subsidized. It also directly benefits from selling wares to the military-industrial complex. GE is a good example of corporations needing government to grow large.
What Schumpter and many other Big Business apologists miss is the high cost of low prices. Taxes continued to rise through the rise of big business, and those taxes went to "internal improvements". That is, the state helped big business defray the costs of their business model onto consumers. In effect, what consumers didn't pay at the shelf they paid to the taxman.
M. Hodak –
Well, actually, if it had been government action, it would have been fine — governments can declare monopolies all over the place. But, while Lawyers are licensed by the government (as are many professions), the state bar is not a governmental organization.
I'm currently reading Amity Shlaes' The Forgotten Man and it is a splendid book.
Mention of the book is relevant here because of how well she lays out the departure of common sense once the socialists were able to portray Hoover's bumbling as capitalism's failure, and not simply government policy run amok.
This view of business in general is part of that departure. Viewing big business or simply "rich people" in terms of "us" and "them" was not invented in the early 20th century, but that was when government and academic managed to solidify it in our public conscious.
Joshua Holmes wrote: "One gigantic corporation would suffer the same resource misdirection that a government would."
Exactly. And it would likely trample freedoms just as large and intrusive governments do.
That was my point. There is no real difference between an economy centrally planned by a government and an economy totally dominated by one ultra huge monopoly. In fact, the monopoly would become the de facto government.
A counterpoint here at Cafe Hayek seems to be that such a scenario could never ever actually occur. But, I wouldn't be so sure about that. First, never ever is a very long time, so who knows what might happen over the next million years or so. Second, as you point out governments and large corporations form symbiotic relationships in their unquenchable thirst to exert and extend power (Nietzche's will-to-power) so I think it's easily possible that a government might one day mid-wife one or more ultra huge monopolies. Third, we do have anti-trust laws and while they might be inefficient, it can't really be proven that they haven't had an effect on reducing the likelihood of the formation of ultra huge monopolies.
No doubt the strict Libertarian answer is to reduce the size of government. Good luck! But it'll never happen so for those of us who can pull ourselves away from Libertarian idealism, other alternatives to balance power, such as anti-trust legislation, need to be considered.
I didn't think that Schumpter argued that big business was good, but merely that big businesses are very likely to be eventually driven out of business by technological change. This claim is prima facie true – how many of the giants of the early 20th century are still around? IBM and Sears is all I can come up with. How about countries – the US certainly wouldn't have been 1st on anyone's list to head the global economy at the turn of the 20th century. Neither would Japan for that matter. Most people would have gone for much stronger countries – France, the Ottoman Empire, or the Russian Empire.
The point is quite clear – in the short term, large companies (or nations) seem impervious, but monopoly breeds indolence and stagnation – the cornerstone of any fall from power.
Chris,
To the extent that the state has a monopoly on courts, you're correct. It does not, of course, have a complete monopoly (since arbitration exists), but its pretty close. Courts are of course subsidized by external taxation, so this really shouldn't be a surprise, IMO. I'll agree that government can regulate the monopolies it creates, but I'd rather it not create them to begin with.
Bret,
What do we have to be more afraid of? Huge and oppressive firms funded voluntarily, or huge and oppressive firms funded with compulsory taxation? Market forces work to increase the division of labor, increase the number of stages of production, and decrease the size of the economy relative to each individual firm. It would be massively unlikely for a business to grow, in a free market, to be as oppressive as a government. Its far more likely that government would instead become an oppressor, as it gave itself more and more power (such as the power to enforce antitrust legislation).
Chris,
On route 100, in your hypothetical scenario, two adjacent gas stations at exit 50 collude to set prices on gasoline; the nearest gas stations are 50 miles in either direction. What kind of forest is this again? Oh yeah, that's right. So, if this is the case, couldn't this be government failure for not having other exits where private companies can operate?
Ferrari have a monopoly on the manufacture and sale of Ferraris, but not on the manufacture and sale of sportscars. McDonalds has a monopoly on the production and sale of Big Macs, but not on the production and sale of hamburgers. Apple has a monopoly on the manufacture and sale of Ipods, but not on the manufacture and sale of MP3 players.
The PDA competes with the pen and notepad. The Personal Computer competes with the typewriter. The motorcar competes with the bicycle. The book competes with the television. The chocalate bar competes with the fruit stall. The cellphone competes with the carrier pigeon!
One problem with antitrust laws is that the identification of a 'market sector' is usually an arbitray exercise.
Bret,
There is no way that any single company will ever become responsible for more than 80% of economic activity as measured by GDP unless it could find a way to displace the federal government and its approximate 2.6 trillion dollar monopoly/racket. I am wondering if I should get the state spending numbers and include them as well.
"here's another example: the State Bar publishes minimum price schedules and then published ethics opinions that say that such price schedules "cannot be ignored." As a result, it is impossible for any potential client to pay less than the published fee schedule."
Mandatory minimum fee schedules have been thrown out.
"But, while Lawyers are licensed by the government (as are many professions), the state bar is not a governmental organization."
There are two types of bar associations: mandatory and voluntary.
The ABA is an example of a voluntary bar association, since they have no real authority over their members. Many states (Virginia is a good example) actually have two "state" bar associations, one governmental and one private. Private bar associations may be what you are thinking of, but they can't establish a minimum fee schedule because they (1) can't require everyone to join, and (2) have no real authority to enforce the rules they adopt.
Mandatory bar associations are run by, or under the authority of, each state's highest court, and have extensive statutory or common law authority to discipline lawyers for misconduct. State medical licensing boards have similar authority. Many states (like MD) have established licensing boards to regulate and discipline licensed contractors and hordes of other specific "professions". All of these are government agencies or entities and there isn't anything private about it unless you look at the private lobbying efforts generally used to establish these commissions (because they do limit competition existing businesses like them). While I think you would have a point if you were objecting to this "lobbying to form a commission to keep out the riff-raff", as I state out above, mandatory associations of this kind (at least bar associations) by law cannot enforce minimum fee schedules.
Just a thought…
I have a monopoly on my shoes. There is no other pair of shoes that is exactly like mine, there are none that share the same creases, odour and history as my shoes. In the market sector of 'Lee's shoes' I am the sole trader (excuse the pun). I have an absolute monopoly, and in the absence of competition I am free to charge whatever price I choose.
I use this monopolistic position to exploit the consumer, who must either pay a high price or go without. In fact, to make the situation worse, my monopoly is enforced by law. It is either impossible or illegal for a competitor to enter the marketplace. Surely this truly is an intolerable evil. There is, afterall, no such thing as a good or acceptable monopoly, right?
Hey, Lee food for thought. If you have your previously worn and scented shoes for sale at monopoly prices, you still have to find a willing buyer at your price.
But when government estabishes its monopoly in such services as, say, retirement planning, they do not have to find willing buyers — the service is made compulsory and everyone is required to pay regardless of price, return of equity, or quality of service. Private companies are not even allowed to do this yet they are demonized by the Left and SoCons when their CEOs make too much, their fees too high, or returns do not track some acceptable benchmarch. Why does government get a free-pass from the same people?
"never happen" is also a very long time.
There is a vast difference between dominating (the A&P example used up-thread) and in monopolizing.
The sad truth is that it is impossible for any business to become a monopoly without the aid of government. For one to monopolize one must have the force to crush competition and prevent it from even making a toehold in any area. To do that will inevitably require criminal activity such as the use of raw force against individuals or groups, and regulations favorable to the business purchasing government compliance. That force can only be legitimized when it is done by government.
Government cooperation can be bought, surprise surprise, and has been done so in the past as well as in the present.
Having the exclusive right to sell Ferraris is not a monopoly because that exclusive right only exists with original sales, I can sell my used Ferrari and not worry about Ferrari coming to stop me.
It is difficult for me to imagine a monopoly in any goods other than consumables, because the right and act of resale of used goods means there is no monopoly, just exclusive right to sell new.
Rockefeller's so-called monopoly in oil is an example. Almost all products derived from oil in the late 1800s and early 1900s were consumed in use and therefore the right of exclusive sale of new products would mean a monopoly. Even though, as I understand it, Standard Oil did not in fact have a monopoly, just a huge share.
Without government intervention in the form of real force and the threat of force through favorable regulations, it is hard for me to imagine any business obtaining a complete monopoly in anything.
vidyohs,
In regard to my example of Ferrari's monopoly on Ferraris, I was careful to state that the it is a monopoly on the manufacture and sale of Ferraris, and not the sale of Ferraris. I did not mean to imply that middle-men could not purchase a Ferrari and then sell it on, only that they cannot manufacture and then sell.
I apologise for the ambiguity of the sentence, which could easily have been interpreted either way.
Regards,
Lee
"What do we have to be more afraid of? Huge and oppressive firms funded voluntarily, or huge and oppressive firms funded with compulsory taxation?"
Libertarians seem to fear (or loathe or both) government above all else. Non-libertarians, on average, seem to me to fear concentrations of power regardless of the source.
The fallacy IMO is that you can set up a government that will only enforce contracts and some how be immune to the influence of concentrated wealth using government to further its power and monopoly.
The idea that monopolies are benign entities flies against the facts. I'd submit that when Howard Dean came on CNN and said he wanted to break up corporartions that held too much power or had conflicted interest the course of our elections and path to the current war was laid. When you have a major media outlet owned by a weapons contractor monoplies can get people killed by wielding their power.
I'd suggest that if the corporate media were not so concentrated and monopolized we'd not be in the current conflict, which itself is all about giving away more of the treasury to monopolistic corporations.
The claim is corporations can't make you buy anything??? Please tell me who's pating for the $85 million dollar contract for Blackwater? Who's paying for the recently approved $150 billion to continue the war. Much of which will go to weapons makers and war profiteers, their CEO's and stockholders.
The fact is we'd do just fine without our Robber Barons.
Well, government is, by an extremely large margin, the largest concentration of power in America (and Americans spends less on government than many other countries). Its also the only one with an (effectively) flat demand curve, because if you don't pay for its services, they send people with guns after you. Neither Walmart nor Microsoft does that.
But why did we have concentrated monopolies in media? I'd argue its because of government intervention. I say "did", because the internet makes any such monopolies impossible. If alternative media sources exist and people sill continue to get their news from flawed outlets, there really isn't anything we can do.
Government-funded corporations are not businesses in the market sense of the word. They are, for all effects and purposes, part of the government. Anything which uses force to collect revenues is, by definition, not part of the free market. Just because government-funded corporations are structured as businesses do not mean they act like businesses.
Our government monopolies, such as Social security and other social welfare schemes, consume (and have consumed) much larger portions of the federal budget (and the GDP) than the defense budget. These schemes are funded at the end of a gun. These schemes are proposed and the funding procured by freely elected officials. Just because I loathe these programs, I do not belittle my own or my fellow citizens intelligence by ascribing sinister brainwashing by corporate media to vote for officials who would continue these programs.
As long as there are free elections then voters can manage any and all government monopolies.
Libertarians seem to fear (or loathe or both) government above all else.
Somewhat true. Libertarians are highly suspicious of most government activities because a very large percentage of these activities involve subordinating liberty in the name of:
- Maintaining a growing bureaucracy – a so-called stable government whose entrenched officials create so-called efficiencies because of tenure and whom have no incentives to be great stewards of the taxpayers money.
- Equalizing inequalities without regard to the personal preferences and differences that lead to the inequalities.
- Creating standardized norms for behavior – even when some behaviors outside the so-called standards do not cause harm to others.
Non-libertarians, on average, seem to me to fear concentrations of power regardless of the source.
Explain where you see the evidence (it can be loose evidence with anecdotes) of non-libertarian Leftists and Social Conservatives who fear the concentrations of power of the federal, state, or municipality levels of government, when their desired politician happen to be holding the powerful position?
You made the claim; you provide your rationale for that claim, please! I don't see (have not seen) it and don't believe it. Got something compelling?
lowcountryjoe,
The point is that unlike libertarians, most non-libertarians don't think the current government is all that big and scary a concentration of power. Totalitarian governments like the USSR cause concern to non-libertarians. Our government does not.
Most people don't think that the current business climate in the United States is a scary concentation of power either. The line there is crossed for many when a business is both large and has a monopoly or near monopoly over a critical good or service.
The point is that unlike libertarians, most non-libertarians don't think the current government is all that big and scary a concentration of power.
I've got to disagree with this. I think it's a partisan view depending on what issue is being disputed, which party the official holding the power — the power that could affect the issue — belongs to, and upon which non-libertarian you solicit the "does the branch/president/court have too much concentrated power?" question from.
Totalitarian governments like the USSR cause concern to non-libertarians.
Yeah, only when they have to live under such a government. Many believe that kind of atmosphere as some kind of potential Utopia if only just a little more tolerance were practiced. Need I remind you of just how many Hollywood types have visited Hugo Chavez and fawned over him? Ditto for Fidel Castro.
Our government does not.
If only it did at least concern my fellow paternalists. Perhaps it will on the future, as some liberty that they still hold dear ends up disappearing through the vote of the "Pluralist Democracy" [hat tip to muirgeo].
Most people don't think that the current business climate in the United States is a scary concentration of power either.
Most people do not understand business. Most people do not view themselves as entrepreneurs. Some businesspersons are actually enriched through this so-called business environment by doing their part in reducing the competition by way of legislation of the non-scary non-big government.
The line there is crossed for many when a business is both large and has a monopoly or near monopoly over a critical good or service.
This explains how companies like Wal*Mart are demonized just because they have squeezed inefficiencies out of the non-food and food industries and much of the profits from businesses that used to thrive in their absence (or when Wal*Mart had less exposure). But government cannot cross any line because it is benevolent, does all the right things, and delivers services with the highest qualities with a streamlined labor force? Please!
Neither do I, after all, its a rational thing for them to do. A lot of the voter demographic is the elderly, why wouldn't they vote themselves more loot? Unlimited democracies give people a means to rent-seek and externalize their costs. It would take strong ethics and morals for a voting democratic body to turn down the opportunity to award themselves more and more privileges. As unlimited democracy becomes more and more acceptable to many people, I'm really scared what will happen in America.
Compare, for example, the costs of buying a presidency or congressional seat, with the annual revenues of some larger corporations. The cost is so small, it is clearly rational for profit-seeking firms to engage in lobbying in the USA and abroad. Frankly, I think we are lucky our government is only as corrupt as it is. Short of a massive movement towards free-market principles by voters, or a new constitution with some teeth on it, I think its only going to get worse.
Gawd! The ol' 'men with guns are going to come around to my place, but business doesn't do that' argument. Really if I bought a shipload of goods on a credit card and when the credit agency figured I have no intention of paying the money back, does that mean they write my misadventure off as a bad debt? Actually I think they would want to call the police or a debt collection agency to start knocking at my door. And what if I sternly say "I'm not paying so tough luck!"? That's when the police would arrive to arrest me or, if you prefer in Libertopia, a private police force or aggressive debt collection force will arrive with guns arresting me for non-payment and hauling to a private court with eventual private imprisonment or privately-enforced seizing my possessions or privately-enforcing me working the debt off.
So, oh dear, it seems the 'men with guns' argument is a case of where 'it's not wrong do so unless it's the government that is doing it as it has no right to exist'. Indeed a lot of unpleasant behaviour attributed to Government could, in fact, be repeated in the private arena as part of doing business and, yet, it would be okay. Hence the real argument goes back to the ol' notion of whether Government as a right to exist. (And I know what that reply is going be, so duh!)
A counterpoint here at Cafe Hayek seems to be that such a scenario could never ever actually occur. But, I wouldn't be so sure about that.
I wouldn't say it's impossible, but I would point out that the state is already subsidizing corporations to help overcome their diseconomies of scale. I don't fear a business getting anywhere near 2% of GDP in a genuine free market.
If someone signs an agreement which allows the credit card companies to reposes the stuff they can't make payments on, what exactly is the problem? Is honesty no longer a virtue? Besides, repossession rarely involves men with guns. Typically the collection agencies simply take the goods back when the owners are away. Violence is, after all, often counter-productive.
I would, however, agree that purposefully obfuscated contracts with allow fraudulent lending practices are themselves dishonest and shouldn't be upheld, but that doesn't change the fact that repossessions, in most cases, are things which both parties agreed to prior to the signing of the contract.
The government did not ask me if they could use my money to invade other countries which had not committed any aggression towards me. Article 1 section 8 of the government's charter (the closest thing to a contract I "agreed" to) specifically says it may only go to war in for the common defense or general welfare. Please, forgive me if I do not believe the government is upholding their end of the contract, and I would like to find another provider of government services. Given that I can find nothing in the charter which gives the government exclusive rights over my property (indeed, just the opposite), I don't see why everyone should have to move to accomplish this.
But I do agree that there is nothing special about the private arena that makes it any better. The real issue is voluntary vs. involuntary services. Its easy to see how a "private" entity can become part of government (like Haliburton or Blackwater).
Bret,
Assuming this is true:
"Libertarians seem to fear (or loathe or both) government above all else. Non-libertarians, on average, seem to me to fear concentrations of power regardless of the source.
Posted by: Bret | Oct 2, 2007 12:20:54 PM"
Could it be because government's exclusive power to wield real force means it always holds the "balance" of power no matter what the situation.
If governments power is always used constitutionally and justice were dispensed equally then this discussion about monopolies, and its digressions, wouldn't be happening because there would be nothing to talk about.
Without government force backing it, no business has the power or force to compel you to do anything, to patronize it, or to prevent you from creating a competing business.
We don't have a market problem in this country, we have a government problem.
As usual muirgeo, you're standing at the edge of the forest, but you can't see the trees. There is myopic, blind, and willfully blind, muirgeo, and you seem to be the latter.
"The claim is corporations can't make you buy anything??? Please tell me who's pating for the $85 million dollar contract for Blackwater? Who's paying for the recently approved $150 billion to continue the war. Much of which will go to weapons makers and war profiteers, their CEO's and stockholders.
The fact is we'd do just fine without our Robber Barons"
No corporation is making us pay a penny, not Blackwater, not Halliburton, not Kroger's, not Walmart, not the Teamster's Union, none, zero, zip, nada.
It is our own government that is making us pay, because it is government that has the monopoly on the use of force against its own citizens. Blackwater has never shown up at my door demanding a percentage of my money, Kroger's or Walmart never make me go shop in their stores, and Halliburten has never sent me a form and a threat saying I have to fill out the form on my income and send them a percentage.
That corporations are the purchasers of government power is obvious, that we the people do not install a new government and throw out the old is also painfully obvious.
Gil, see my last to muirgeo, first paragraph.
"Gawd! The ol' 'men with guns are going to come around to my place, but business doesn't do that' argument. Really if I bought a shipload of goods on a credit card and when the credit agency figured I have no intention of paying the money back, does that mean they write my misadventure off as a bad debt? Actually I think they would want to call the police or a debt collection agency to start knocking at my door. And what if I sternly say "I'm not paying so tough luck!"? That's when the police would arrive to arrest me or, if you prefer in Libertopia, a private police force or aggressive debt collection force will arrive with guns arresting me for non-payment and hauling to a private court with eventual private imprisonment or privately-enforced seizing my possessions or privately-enforcing me working the debt off."
That, frankly, is the most ridiculous paragraph I have read in a long time.
Every scenario you try to create still has government as the root source of force. Take government out of the equation and you are left with your natural right of self defense.
If you had a permit to carry, a loaded revolver with the hammer on an empty chamber in a holster at your belt, walking down a street late at night, and was approached by an armed thief who demanded your money you have the perfect and natural right to pull your revolver, thumb the hammer and defend yourself by shooting him.
If, at your home, the doorbell rings and you answer the door to find an armed man who identifies himself as a Mastercard enforcer/collector and demands you give him, on the spot, money you don't owe and he reaches to pull his gun, you have the perfect and natural right to shoot him in self defense. In the same scenario, if you have used the credit card and purchased goods, you owe the money; so, while the mastercard enforcer may not physically assualt you, he and his company do have the right to charge you with theft and have you arrested……at least they would in a world where government performed as it is supposed to.
No private corporation can come with force to you or your home and compel you to part with a penny. the force when it comes, comes in the form of government police and government power.
However, in our world, where the congresscritters yeilded to pressures from the socialist evangelicals for so long, who cried that people were helpless and not to blame for running up bills that they knew they couldn't pay, so congress responded with restrictive laws on the collection of credit debts….and for years and years, still going on to some degree, sugar-teat suckers took the cards, ran up the debts, and then refused to pay at all or arranged a settlement of pennies on the dollar….and by doing so passed their theft off to be covered by responsible men and women.
And, Oh my God, just remember the wailing and crying before the recent change to the laws to allow credit card companies more force in LAW to collect the debts that thumb suckers run up.
BTW, using credit card corporations as an example was really an extremely poor choice. A very unlikely choice for a demonstration of the evils of corporations. The possession of a credit card required an application, freely and voluntarily submitted. I find the sugar-teat sucker's claim that temptation is an irresistable force the most pathetic defense for theft that I can imagine.
It is just a statement of fact that "the men with guns" always have a badge and generally a uniform, government goons.
G,
In reference this:
"But I do agree that there is nothing special about the private arena that makes it any better. The real issue is voluntary vs. involuntary services. Its easy to see how a "private" entity can become part of government (like Haliburton or Blackwater)."
I was in agreement with you until the quote above. I would ask you to consider this. The difference is not that the private arena is necessarily populated with altruistic men and women, and that the government is always populated with bad guys. If a private entity such as Halliburten or Blackwater became part of the government then it loses it status of "private entity" and joins "government", so your problem is still government, and not a private entity.
Furthermore consider that government is a legal fiction, an agreement between peoples, to hire certain servants to do things the people themselves do not have the time (and maybe skills) to do for themselves and still lead a productive life. That legal fiction obtains its power from our belief, acceptance, and cooperation. If government moves against a man or a group, we the people almost certainly stand back and either tacitly support that movement, or practice non-interference. We know that going head to head with government also implies going head to head with our neighbors. In the world supposed to be created by the Constitution, this action would simply be your servants taking the action you commissioned them to do through your representatives. (I know it doesn't work that way, which again is why I say we have a government problem)
A corporation on the other hand exists as a commercial enterprise, an entity created to provide goods and services to people who enter into private agreement with it, private agreement that can be a casual and quick contract such as going into Krogers, looking at the offers, accepting an offer, and complete the contract by taking the item to check out and giving over the sum agreed upon. Private corporations have no more rights than an individual person, as a matter of fact corporations are defined as persons in law and that is why they get the same benefits of law as a person would.
This is why corporations use "advertising campaigns" to tempt you to voluntarily come in and patronize. You have the choice to resist because they have no right to compel.
So, if a corporation, as a corporation sans government presence, came to your neighbor and attempted to forcibly evict him and seize his property, the reaction among his neighbors to join him and forcibly resist on his behalf would be legitimate and very likely.
I would suggest the conclusion must be that private entities are not and never will be your problem. Your problem will always, and exclusively be, government.
So how has Microsoft used govt to gain its virtual stranglehold on the PC OS market? Few want to call it a monopoly but upwards of 95% of the OS market is Microsoft in the PC world.
In what year do any of you predict that a competitor will upseat Microsoft as the vast leader in again this OS market? And why has not a competitor done so already by say buying Linux and pumping money into it and getting contracts with PC manufacturer to sell it with each sale? Is Windows then a quality product?
In what way was Microsoft giving away its Internet Explorer for free which killed Netscape not an abuse of its monopolistic control of said OS market?
In what way was it a benefit to the free market for MS to code into win3.x that any other version of DOS was invalid and one had to buy MS DOS which was actually a lie?
In what way has the free market benefitted by all the companies that Microsoft has bought out to kill off its competition and/or its claimed competition such as Netscape? Again not the very happy programmer who now lives a life in retirement but we the consumers as a whole?
Since I have seen no where where Microsoft as actually used the govt but actually skirted current laws and simply pays the miniscule fine how would this have been prevented in a completely neutered 1789 US Fed?
Second assuming that the US Civil War never happened in what year would slavery been abolished? Again assuming innovation and technology improved such as the cotton gin over the years. Farming technology has greatly improved. So with that in mind when would the free market had gotten rid of slavery since govt of the time did not forbid nor say one could have it.