Discussion: Global Warming, Emission Standards, and Other Environmental Issues

[StorminNorman]

Obviously I don't think that people are stupid enough to "need government encouragement" to be safe. What people need are reminders of what is safe and what is not. Sometimes it's obvious, sometimes it's not.

And the people who would be paying out the BIG lawsuits would be the people with the money, even if it's impossible for them to oversee every individual location. It's like suing the CEO of Walmart if someone slipped in a puddle of water in one individual store. And maybe the settlement from such a lawsuit still wouldn't justify the cost of hiring a third-party to oversee safety. You do remember that explanation about car recalls from Fight Club, don't you?

That's a good thing though, isn't? I mean, do you think that someone slipping in a puddle of water deserves regulation? Depending on how dangerous this specific puddle is, it's quite possible that it was simply an accident. If the slippee is hurt, the individual store have their own insurances in place and what needs to be done is done. It's a small, simple issue.

It's the BIG lawsuits that would apply to the truly serious violations. The sort of incident that would require regulation. Big lawsuit acts as the teeth of regulation.

 

[Carcharodon]

If BP survives the oil spill in both a deregulated and a regulated world, how can success or failure of my regulated world be based on the death of BP? I promise not that deregulation would instantly kill bad companies (though companies like BP would have to become more responsible if they hope to compete in a free market - at least in America). I do promise that the consequences of BP's actions would hurt the company, would cost them billions of dollars and destroy their reputation. All of which are things that no oil company wants any part of (and will thus do their due diligence to avoid).

Again, it must be respected how much the difference between success and failure in business is. Taking a shellacking due to an oil spill is not good for any company ever.

Yet you still can't show me that BP was hurt all that badly by this whole ordeal, government intervention notwithstanding. Their stock has begun to recover. People still buy their product. If a name is tarnished, the company can be re-branded.

Under your proposed system, it's entirely possible for a company to be too big to be subjected to any significant consequence of a "self-regulated" market. Monopolies will form, and the system will be rendered almost entirely ineffective.

Also, who would monitor things like carbon emissions?

Actually I didn't. It's one of the most brilliant political sentences ever written. It's the entire notion that the flaw of governments (and their regulation) are that they are run, not by incorruptible public servants but by corruptible men. That's why governments must remain small.

Yes, it's talking about controls on government, but something tells me you ignored the first half of that quote. The one that disagrees with the argument you're presently trying to make. The one you neglect to expand upon here.

In essence, you're hijacking one half of the quote to fit your purpose without realizing (or caring) that the important point is about balance. So either you misinterpreted the quote, or you're being dishonest in your interpretation.

You're not talking about placing controls on the government with respect to the market; you're advocating the removal of its role in the market entirely. Something that quote does not in any way, shape or form support.

 

[StorminNorman]

Yet you still can't show me that BP was hurt all that badly by this whole ordeal, government intervention notwithstanding. Their stock has begun to recover. People still buy their product. If a name is tarnished, the company can be re-branded.

Under your proposed system, it's entirely possible for a company to be too big to be subjected to any significant consequence of a "self-regulated" market. Monopolies will form, and the system will be rendered almost entirely ineffective.

Ah, the M word. You do realize that the best enemy of monopolies IS free markets, right? Monopolies are created by government intervention and furthered by regulation. The only monopolies that can be withstood in a free market are those in which the consumer benefits (the monopoly price is as such due to the fact that no other company can sell whatever good for a lower price than the monopoly. Furthermore, with my belief in the importance of reputation and the social consciousness such a monopoly would require, if not a "good" moral company, the absence of a bad one).

Again, in a free market the CONSUMERS have the legislate morality with their purchasing power. In a government controlled economy bureaucrats, lobbyists and politicians legislate morality. I know which one I prefer.

Also, who would monitor things like carbon emissions?

The companies. If consumers are worried about carbon emissions, then they will want to know the appropriate information, companies will create products specifically for such interest and the entire issue is handled through the invisible hand.

If consumers aren't worried about carbon emissions, then the government really shouldn't be doing anything about it.

Yes, it's talking about controls on government, but something tells me you ignored the first half of that quote. The one that disagrees with the argument you're presently trying to make. The one you neglect to expand upon here.

Let me take the time to expand on it here.

I am assuming that people are going to act in their own interest. That doesn't require angels. I am not assuming that oil companies are going to try to prevent oil spills because it's for the good of the gulf, or flipper, or mankind or anything like that. I am assuming that oil companies are going to try to prevent oil spills because oil spills are bad for business. I am assuming that meat processors aren't going to sell bad meat, not because they care if you die from their meat but because if you die from their meat YOU can't buy more and people are less likely to buy meat that kills.

Got anything else?

You're not talking about placing controls on the government with respect to the market; you're advocating the removal of its role in the market entirely. Something that quote does not in any way, shape or form support.

I am not talking about removing government from the market entirely. I support tort law. Regulations, however, are made by government and controlled by government with nothing to control it. Yes the government can create limits for it's regulations and regulators, but those are government created limits and as such not really a hedge at all.

Lassie-Faire capitalism is to economics what liberalism was to politics.

 

[chaseter]

Free Market is not the best defense against monopolies. What if all the oil companies got together and said lets raise prices on our product 20%. Nobody can stop them and no new companies are going to crop up anytime soon to jeopardize their hold on the market. Everybody is still going to use oil.

 

[StorminNorman]

Free Market is not the best defense against monopolies. What if all the oil companies got together and said lets raise prices on our product 20%. Nobody can stop them and no new companies are going to crop up anytime soon to jeopardize their hold on the market. Everybody is still going to use oil.

Except if that's the case any competitor that wishes to make more money than they are currently making needs to simply reduce in price by 10% and control a greater percentage of the market.

It is much easier for corporations using government regulation to prevent the rise of competition to create such a situation.

You need to work on your economic foundations. I recommend reading some lassie-faire authors before attempting to discredit the concept.

 

[chaseter]

You need to quit thinking that every person running every corporation are pure hearted businessmen and women looking to deliver the highest quality product for the lowest possible price. That is not the way the world works. Either you are fiercely naive or you are sticking to your guns to stay consistent with the rest of your philosophies. Too many times have people cheated the system and without government oversight, it would be measurably worse. To think a pure free market without regulations will benefit consumers and corporations alike is naive. You forget one simple fact, what the customer doesn't know doesn't hurt them.

 

[StorminNorman]

You need to quit thinking that every person running every corporation are pure hearted businessmen and women looking to deliver the highest quality product for the lowest possible price. That is not the way the world works. Either you are fiercely naive or you are sticking to your guns to stay consistent with the rest of your philosophies. Too many times have people cheated the system and without government oversight, it would be measurably worse. To think a pure free market without regulations will benefit consumers and corporations alike is naive. You forget one simple fact, what the customer doesn't know doesn't hurt them.

I certainly don't need an education into the errors of humankind. I have been working in politics since I was 14, I am hardly naive.

I don't assume anyone ever is pure hearted. What I do assume is that those who run powerful companies typically get to that position due to merit. I also know that causing natural disasters is bad business. I know that poisoning your customers is bad business. I know that mistreating your employees is bad business. None of them are bad business because of some moral standard - all of them are bad business because they affect the bottom line.

You are illustrating the classical argument against the free markets, which requires the belief that corporate leads are Lex Luther like cartoon villains that take use their positions of economic power to **** with the little guy just because of their own insecurities. THAT is the immature view of the world.

You are correct in one respect. I am sticking to my guns philosophically. That's because my philisophy is based upon observation of history, economics and human nature. The second I start seeing data showing that government intervention into the economy works, the second I start seeing regulation being beneficial, the second I see that a pillar of my ideology is weak - I will change. My intellectual loyalty lies with being right, not defending free markets, not defending libertarianism.

The most valuable possession I own is my opinion, I have spent years cultivating it and I believe it to be of tremendous practical worth. I want to be correct about the issue, not to an idea.

A year ago I shared your view. Today I know better.

 

[StorminNorman]

Heres a good article on FDA regulation.

http://www.hoover.org/publications/policy-review/article/5325

 

[Gamma Ray]

Global Cooling is Coming, Says Scientist
http://www.foxnews.com/scitech/2010/01/11/years-global-cooling-coming-say-leading-scientists/

Icecap Loss Was Overrated
http://sg.news.yahoo.com/afp/20100908/tts-climate-warming-science-ice-c1b2fc3.html

 

[Carcharodon]

Global Cooling is Coming, Says Scientist
http://www.foxnews.com/scitech/2010/01/11/years-global-cooling-coming-say-leading-scientists/

Latif, a professor at the Leibniz Institute at Germany's Kiel University and an author of the U.N.'s Intergovernmental Panel on Climate Change (IPCC) report, believes the lengthy cold weather is merely a pause -- a 30-years-long blip -- in the larger cycle of global warming, which postulates that temperatures will rise rapidly over the coming years.

Which, again, could likely exacerbate ocean acidification. Great news.

 

[Carcharodon]

Ah, the M word. You do realize that the best enemy of monopolies IS free markets, right? Monopolies are created by government intervention and furthered by regulation. The only monopolies that can be withstood in a free market are those in which the consumer benefits (the monopoly price is as such due to the fact that no other company can sell whatever good for a lower price than the monopoly. Furthermore, with my belief in the importance of reputation and the social consciousness such a monopoly would require, if not a "good" moral company, the absence of a bad one).

Again, in a free market the CONSUMERS have the legislate morality with their purchasing power. In a government controlled economy bureaucrats, lobbyists and politicians legislate morality. I know which one I prefer.

The companies. If consumers are worried about carbon emissions, then they will want to know the appropriate information, companies will create products specifically for such interest and the entire issue is handled through the invisible hand.

If consumers aren't worried about carbon emissions, then the government really shouldn't be doing anything about it.

Let me take the time to expand on it here.

I am assuming that people are going to act in their own interest. That doesn't require angels. I am not assuming that oil companies are going to try to prevent oil spills because it's for the good of the gulf, or flipper, or mankind or anything like that. I am assuming that oil companies are going to try to prevent oil spills because oil spills are bad for business. I am assuming that meat processors aren't going to sell bad meat, not because they care if you die from their meat but because if you die from their meat YOU can't buy more and people are less likely to buy meat that kills.

Got anything else?



I am not talking about removing government from the market entirely. I support tort law. Regulations, however, are made by government and controlled by government with nothing to control it. Yes the government can create limits for it's regulations and regulators, but those are government created limits and as such not really a hedge at all.

Lassie-Faire capitalism is to economics what liberalism was to politics.

I disagree with you very strongly on this, and I think I may have to leave it at that. One thing I will say is that selling bad meat didn't hurt companies before stronger government regulations were put into place. I'm baffled as to why you think it would today without regulation.

Monopolies are created by government intervention and furthered by regulation.

I would LOVE to see you support this.

 

[Franklin Richards]

Don't forget the cartels and the cattle barons who eliminated anyone who dropped their prices 10%.

 

[chaseter]

Yup, by buying them out or overshadowing their share of the market. Or hell, by paying people to destroy their factory and product and also bullying/intimidating them owners and their staff. But, of course the consumer knows all of that stuff to keep everything fair, prices down, and quality high.

 

[StorminNorman]

I disagree with you very strongly on this, and I think I may have to leave it at that. One thing I will say is that selling bad meat didn't hurt companies before stronger government regulations were put into place. I'm baffled as to why you think it would today without regulation.

While I am not sure if you could provide data supporting the economic affect of poor conditions in the meat industry before the regulation, lets assume you are right. The reason that late 1800 meat companies would be able to avoid the consequences of bad business practices is due to the fact that the information networks of the 1800 are incomparable to the information networks of 2010. If a meat company sold bad meat in 1800, only people who ate the meat would know about it. Maybe the newspaper would pick it up? Maybe not. In 2010, if a meat company sells bad meat, it covers the media.

As I have said time and time and time again the best preventative measure to bad business is increased information, it is not the government with the stick. Informed consumers are exceptionally more competent, efficient, just and intelligent than government bureaucrat.

I would LOVE to see you support this.

It's fairly basic economics.

A monopoly can ONLY exist in a free market one of two ways.

1. If a more efficient for one firm to serve an entire market than for two or more firms to do so, because of the economies of scale in that market. This means that one firm can produce at a lower average cost than two or more firms with competing products. In economics this is called 'natural monopoly'.

There is nothing at all wrong about a natural monopoly. After all, it is even possible for competition to enter the market against a natural monopoly. The only way a natural monopoly could fail, however, is BAD BUSINESS PRACTICE like the ones above. If the company enjoying the natural monopoly (producing products cheaper than anyone else can, of equal quality) then only irresponsible business policy would lead a relevant portion of the market to consider any competitor.

2. The second way a monopoly can exist is coercion. The government is great at economic coercion. So are robber barons and other thugs.

In the whole history of capitalism, no one has been able to establish a coercive monopoly by means of competition on a free market. There is only one way to forbid entry into a given field of production: by law. Every single coercive monopoly that exists or ever has existed—in the United States, in Europe or anywhere else in the world—was created and made possible only by an act of government: by special franchises, licenses, subsidies, by legislative actions which granted special privileges (not obtainable on a free market) to a man or a group of men, and forbade all others to enter that particular field.

For more reading on monopolies:

http://mises.org/Community/blogs/da...ntion-and-its-effects-on-the-free-market.aspx

http://www.nathanielbranden.com/catalog/articles_essays/question_of_monopolies.html

Don't forget the cartels and the cattle barons who eliminated anyone who dropped their prices 10%.

Which has nothing to do with Free Markets.

Actually (and see, this is where you guys are awesome because you allow me to show that everything is connected) lets talk about robber barons. Because robber barons show exactly what happens when you mix politics and economics.

Robber Barons became the scorn of the country during the Great Depression. They were seen as evidence against the free markets, the cause of the Great Depression and examples of why the government has to dip their nasty fingers into great mother Capitalism.

Of course the Robber Barons weren't a product of Capitalism but of it's distortion. JP Morgan and Andrew Carnage, for example, used their political connections to ensure tariffs to protect US Steel (no industry in America has been protected more than the US Steel industry - which is why it still remains immature).

One of the great example of "Robber Barons" came about with railroads. Of course they were reacting not to capitalist built railroads (like the successful Great Northern Railroad - which was built WITHOUT public lands, without government built subsidies) but to the government financed Transcontinental Railroad (Central Pacific Railroad).

The government railroad built inefficient route (they were being paid by the mile on the governments dime, so who wants the shortest route?) They used the cheapest resources they could use (where as The Northern Railroad was made with materials built to last at greater expense). In the name of speed they built rails over ice and snow, which had to be rebuilt in the spring. The government built railroad took forever, was poorly made and disrupted the lives of Americans and farmers.

To solve the problems created by the government built railroad, the government started to regulate the entire railroad industry. In order to help "customers" they mandated equal rates for all passengers. This destroyed The Great Northern Railroad's system of allowing farmers and poor citizens to pay less their than affluent customers for their services.

This all comes down to the issue of the two types of Entrepreneur: The Market Entrepreneur and the Political Entrepreneur. The Market Entrepreneur generates business by creating or improving products (that's the only way to make sales in a capitalist economy). The Political Entrepreneur creates their place in the market by increasing their influence in the political world.

The former thrives unabridged in a Free Market. The latter can ONLY exist in a mixed economy with government intervention.

Yup, by buying them out or overshadowing their share of the market. Or hell, by paying people to destroy their factory and product and also bullying/intimidating them owners and their staff. But, of course the consumer knows all of that stuff to keep everything fair, prices down, and quality high.

This is either you demonstrating intentional intellectual dishonesty or your ignorance in economics.

 

[StorminNorman]

I disagree with you very strongly on this, and I think I may have to leave it at that. One thing I will say is that selling bad meat didn't hurt companies before stronger government regulations were put into place. I'm baffled as to why you think it would today without regulation.

While I am not sure if you could provide data supporting the economic affect of poor conditions in the meat industry before the regulation, lets assume you are right. The reason that late 1800 meat companies would be able to avoid the consequences of bad business practices is due to the fact that the information networks of the 1800 are incomparable to the information networks of 2010. If a meat company sold bad meat in 1800, only people who ate the meat would know about it. Maybe the newspaper would pick it up? Maybe not. In 2010, if a meat company sells bad meat, it covers the media.

As I have said time and time and time again the best preventative measure to bad business is increased information, it is not the government with the stick. Informed consumers are exceptionally more competent, efficient, just and intelligent than government bureaucrat.

I would LOVE to see you support this.

It's fairly basic economics.

A monopoly can ONLY exist in a free market one of two ways.

1. If a more efficient for one firm to serve an entire market than for two or more firms to do so, because of the economies of scale in that market. This means that one firm can produce at a lower average cost than two or more firms with competing products. In economics this is called 'natural monopoly'.

There is nothing at all wrong about a natural monopoly. After all, it is even possible for competition to enter the market against a natural monopoly. The only way a natural monopoly could fail, however, is BAD BUSINESS PRACTICE like the ones above. If the company enjoying the natural monopoly (producing products cheaper than anyone else can, of equal quality) then only irresponsible business policy would lead a relevant portion of the market to consider any competitor.

2. The second way a monopoly can exist is coercion. The government is great at economic coercion. So are robber barons and other thugs.

In the whole history of capitalism, no one has been able to establish a coercive monopoly by means of competition on a free market. There is only one way to forbid entry into a given field of production: by law. Every single coercive monopoly that exists or ever has existed—in the United States, in Europe or anywhere else in the world—was created and made possible only by an act of government: by special franchises, licenses, subsidies, by legislative actions which granted special privileges (not obtainable on a free market) to a man or a group of men, and forbade all others to enter that particular field.

For more reading on monopolies:

http://mises.org/Community/blogs/da...ntion-and-its-effects-on-the-free-market.aspx

http://www.nathanielbranden.com/catalog/articles_essays/question_of_monopolies.html

Don't forget the cartels and the cattle barons who eliminated anyone who dropped their prices 10%.

Which has nothing to do with Free Markets.

Actually (and see, this is where you guys are awesome because you allow me to show that everything is connected) lets talk about robber barons. Because robber barons show exactly what happens when you mix politics and economics.

Robber Barons became the scorn of the country during the Great Depression. They were seen as evidence against the free markets, the cause of the Great Depression and examples of why the government has to dip their nasty fingers into great mother Capitalism.

Of course the Robber Barons weren't a product of Capitalism but of it's distortion. JP Morgan and Andrew Carnage, for example, used their political connections to ensure tariffs to protect US Steel (no industry in America has been protected more than the US Steel industry - which is why it still remains immature).

One of the great example of "Robber Barons" came about with railroads. Of course they were reacting not to capitalist built railroads (like the successful Great Northern Railroad - which was built WITHOUT public lands, without government built subsidies) but to the government financed Transcontinental Railroad (Central Pacific Railroad).

The government railroad built inefficient route (they were being paid by the mile on the governments dime, so who wants the shortest route?) They used the cheapest resources they could use (where as The Northern Railroad was made with materials built to last at greater expense). In the name of speed they built rails over ice and snow, which had to be rebuilt in the spring. The government built railroad took forever, was poorly made and disrupted the lives of Americans and farmers.

To solve the problems created by the government built railroad, the government started to regulate the entire railroad industry. In order to help "customers" they mandated equal rates for all passengers. This destroyed The Great Northern Railroad's system of allowing farmers and poor citizens to pay less their than affluent customers for their services.

This all comes down to the issue of the two types of Entrepreneur: The Market Entrepreneur and the Political Entrepreneur. The Market Entrepreneur generates business by creating or improving products (that's the only way to make sales in a capitalist economy). The Political Entrepreneur creates their place in the market by increasing their influence in the political world.

The former thrives unabridged in a Free Market. The latter can ONLY exist in a mixed economy with government intervention.

Yup, by buying them out or overshadowing their share of the market. Or hell, by paying people to destroy their factory and product and also bullying/intimidating them owners and their staff. But, of course the consumer knows all of that stuff to keep everything fair, prices down, and quality high.

This is either you demonstrating intentional intellectual dishonesty or your ignorance in economics.

 

[Marx]

UPDATE: SCIENTISTS FIND LEAKED OIL LAYERING GULF SEA FLOOR
http://www.huffingtonpost.com/2010/09/13/scientists-find-oil-on-th_n_714951.html



Imagine that. It didn't 'vanish' as some tried to say...

 

[chaseter]

While I am not sure if you could provide data supporting the economic affect of poor conditions in the meat industry before the regulation, lets assume you are right. The reason that late 1800 meat companies would be able to avoid the consequences of bad business practices is due to the fact that the information networks of the 1800 are incomparable to the information networks of 2010. If a meat company sold bad meat in 1800, only people who ate the meat would know about it. Maybe the newspaper would pick it up? Maybe not. In 2010, if a meat company sells bad meat, it covers the media.

Without looking it up, please tell me the company that sold the E. coli contaminated Spinach in late 2006. It was covered by the media feverishly. If what you are saying is true, then the company should have went under and shouldn't still be in business today. Guess, what...they are. What about the salmonella outbreak in tomatoes and jalepenos in mid 2008? That was national news too. Who sold those tomatoes and do you think they are still in business? Yes they are. That company was from Mexico though so what do we do now!?

By no contrast, the pure and simple continued existence of BP faults your argument. Some companies get too big to fail. Even a huge oil spill in the gulf was not enough to tank BP. They are still in business and will continue to remain in business until they sell their company. They could even rebrand and most American consumers would never make the connection. BP could rename their company to Horizon Energy Solutions and in 5 years most people would never EVER make the connection.

But somehow the media network in 2010 is going to ruin companies that sell inferior products or cause natural disasters.

 

[Marx]

UPDATE: RELIEF WELL DRILLING RESUMES
http://www.cnn.com/2010/US/09/13/gulf.oil.disaster/index.html?hpt=T1

 

[StorminNorman]

Without looking it up, please tell me the company that sold the E. coli contaminated Spinach in late 2006. It was covered by the media feverishly. If what you are saying is true, then the company should have went under and shouldn't still be in business today. Guess, what...they are. What about the salmonella outbreak in tomatoes and jalepenos in mid 2008? That was national news too. Who sold those tomatoes and do you think they are still in business? Yes they are. That company was from Mexico though so what do we do now!?

By no contrast, the pure and simple continued existence of BP faults your argument. Some companies get too big to fail. Even a huge oil spill in the gulf was not enough to tank BP. They are still in business and will continue to remain in business until they sell their company. They could even rebrand and most American consumers would never make the connection. BP could rename their company to Horizon Energy Solutions and in 5 years most people would never EVER make the connection.

But somehow the media network in 2010 is going to ruin companies that sell inferior products or cause natural disasters.

Those companies didn't go over because they corrected their mistakes. Which is exactly what regulation would have done. The spinach company probably did take a hit when the ecoli outbreak happened. I know Jack in the Box did when they had their own little crisis.

I am not guaranteeing that a company is going to be forever scarred or instantly destroyed by crisis. What I am saying is that free market forces will mandate a change and require capital invested in reputation repair or end with the company failing. And lets be honest, an isolated food scare is hardly worthy of destroying a large company responsible for thousands of jobs. They are serious issues that should be improved upon (and they always are when they occur in both free and mixed markets) but not company destruction worthy. Now the company actively going out of their way to endanger their consumers to e-coli would destroy the company. Obvious cases of negligence would probably lead to the destruction of a company.

ACCIDENTS happen in a free economy, JUST AS THEY DO WITH GOVERNMENT REGULATION, but the difference is that accidents in a free economy are handled efficiently without legislators enacting law that has long term effects on the industry.

 

[chaseter]

Oh so only media backlash will make them correct their mistakes? Because Government + media isn't doing a good enough job today Yes that makes me feel more safe. I would sleep so much better at night knowing that the food I ate that day was under the scrutiny of the 2010 media so it must be top notch because who wants bad press?

 

[StorminNorman]

Again, it is not simply the scrutiny of the media - it is the approval of the consumer. The media plays a major role because no business wants bad press because a bad reputation is extremely costly. (That's why companies spend millions on image).

Government + Media ISN'T doing a good enough job. It's not only do they have little success preventing incidents like the oil spill or the eggs, but the legislation it's passes to combat it typically tends to be incredibly costly.

Furthermore regulation prevents barriers of entry into the industry. Regulation benefits big business as the expense of small businesses.

 

[chaseter]

So if A & B aren't doing a good enough job, then lets take out A and let B do all the work. Makes sense.

 

[StorminNorman]

So if A & B aren't doing a good enough job, then lets take out A and let B do all the work. Makes sense.

If only it was that simple.

Again, let me know if you have any interest in actually reading about capitalism. I can point you to some pretty cool stuff at Mises.org.

 

[Carcharodon]

While I am not sure if you could provide data supporting the economic affect of poor conditions in the meat industry before the regulation, lets assume you are right. The reason that late 1800 meat companies would be able to avoid the consequences of bad business practices is due to the fact that the information networks of the 1800 are incomparable to the information networks of 2010. If a meat company sold bad meat in 1800, only people who ate the meat would know about it. Maybe the newspaper would pick it up? Maybe not. In 2010, if a meat company sells bad meat, it covers the media.

As I have said time and time and time again the best preventative measure to bad business is increased information, it is not the government with the stick. Informed consumers are exceptionally more competent, efficient, just and intelligent than government bureaucrat.

I think you place WAY too much faith in the consumer's ability and willingness to monitor such problems, but that's just me. I believe that the average consumer, informed or otherwise, is lazy.

So it's my cynicism vs. your optimism.

It's fairly basic economics.

A monopoly can ONLY exist in a free market one of two ways.

1. If a more efficient for one firm to serve an entire market than for two or more firms to do so, because of the economies of scale in that market. This means that one firm can produce at a lower average cost than two or more firms with competing products. In economics this is called 'natural monopoly'.

There is nothing at all wrong about a natural monopoly. After all, it is even possible for competition to enter the market against a natural monopoly. The only way a natural monopoly could fail, however, is BAD BUSINESS PRACTICE like the ones above. If the company enjoying the natural monopoly (producing products cheaper than anyone else can, of equal quality) then only irresponsible business policy would lead a relevant portion of the market to consider any competitor.

2. The second way a monopoly can exist is coercion. The government is great at economic coercion. So are robber barons and other thugs.

In the whole history of capitalism, no one has been able to establish a coercive monopoly by means of competition on a free market. There is only one way to forbid entry into a given field of production: by law. Every single coercive monopoly that exists or ever has existed—in the United States, in Europe or anywhere else in the world—was created and made possible only by an act of government: by special franchises, licenses, subsidies, by legislative actions which granted special privileges (not obtainable on a free market) to a man or a group of men, and forbade all others to enter that particular field.

For more reading on monopolies:

http://mises.org/Community/blogs/da...ntion-and-its-effects-on-the-free-market.aspx

http://www.nathanielbranden.com/catalog/articles_essays/question_of_monopolies.html

So a natural monopoly, once established, can't then raise its prices and force out competition?

Thanks for that info, by the way. I learned some things.

 

[StorminNorman]

I think you place WAY too much faith in the consumer's ability and willingness to monitor such problems, but that's just me. I believe that the average consumer, informed or otherwise, is lazy.

So it's my cynicism vs. your optimism.

In many ways it's just as accurately described as your cynicism of the public vs. my cynicism of government. If I believed the only problem with regulation was that the public could do the same job more efficiently, I wouldn't really care about the issue - there are bigger fish to fry. But I contend that regulation is a one of the best creators of disasterous unintended consequences you find so often in government policy.

http://www.hoover.org/publications/policy-review/article/5325

That's a recommend essay about the FDA that I believe serves as a good illustration.

So a natural monopoly, once established, can't then raise its prices and force out competition?

If the natural monopoly prices it's good higher than the lowest price a competitor can charge than it risks its natural monopoly.

Now I suppose if you create a scenario where the good in question has a finite quantity and the natural monopoly has gained control over the supply and is holding it for ransom, then yes the free market may have some issues. But I don't contend that free markets aren't perfect, only the best we have.

Thanks for that info, by the way. I learned some things.

I have more material along those lines if you are interested. I have one article from 1979 that's eerily accurate in predicting 2008 that I would highly recommend if you want to understand why I am so extreme, lol.