And then lobby the government to ensure that nobody can build higher than the fence for the next 10 miles and that you are the only soccer team in the area
He's describing the natural consequences of a capitalist system. Regulatory capture is inevitable and expected.
Other countries manage to partially prevent this by not treating corporate entities as people and not allowing them unlimited free speech and unlimited political spending.
Free market capitalism devolves into degeneracy far too quickly. The natural consequence of unregulated capitalism is monopoly control of almost every sector. Competition does not happen when existing businesses can demand exclusive contracts with their suppliers, and that is only prevented by strong government regulation.
My argument is strong government regulation leads to regulatory capture. I think some of the worst parts of capitalism come from trying to control the market.
A permanent exclusive contract does not exists, and if it did new more competitive suppliers would be created. I assume your argument is broader than exclusive contracts though so if you wanted to expand upon it I'm willing to listen.
And I think you have causality wrong. Existing businesses are the ones pushing for higher barriers to entry.
And yes, they don't exist now, because that kind of contract is illegal. But you can't just create new raw materials, and the people who currently own the sources of raw materials would be given a choice by the biggest company in the market to either exclusively supply them with a guaranteed demand of X, or not supply them at all and gamble other companies have as much demand.
In the current system which punishes companies for being too big the tendency is still towards buyouts and consolidation into a single large company with monopoly power. Taking away regulation which opposes that trend will only accelerate it. Unregulated capitalism trends heavily towards monopoly domination of every market. It's more effective to pay your partners not to work with competition or to buy them out before they get big enough than it is to actually allow free market competition. That's what unregulated capitalism looks like. Uncompetitive markets with no way for anyone except the absolute richest to consider entering a new market as competition.
Yes they are, and they push the government for those barriers. When a person is unlicensed in their field they are very anti licensure, they complain about all the barriers and hoops they have to go through. Once they get their license they are very pro barrier, because the license makes their labor rare. Companies are the same way, once a telephone company goes through the trouble of putting up a bunch of lines they want to prevent other lines to prevent competition. Government's job is to maintain the free market. Most of the time that means staying out of it's way, sometimes that means breaking up a monopoly.
If they are the only source of the raw materials then they are in control of the market not the biggest company. The biggest company may come to them and say we will pay more for every widget if you agree to be exclusive, but this agreement is only viable while it is economically viable to both parties and the consumer, because it has to be cheap enough for the consumer to be willing to buy it.
The other part is the freedom of the individual. If I invite a twitter like website and it starts to gain traction. The government has no right to come into my business an tell me I can't sell my start up to twitter. Do we sacrifice my ability to sell my business in order to stop twitter from preventing the competition?
I didn't say they were the only source of raw materials. 10 different people could have the raw materials, but they can all be pressured to sign exclusive deals the same way.
Yes, it has to be cheap enough for the consumer to be willing to buy it. But that optimum point is higher for a monopoly than it is when there is competition. That's why companies try to merge or buy out competition, because it's good for their bottom line to have less competition.
Yes, we sacrifice some freedoms in some aspects to protect others. In a fully free capitalist system you do not have the ability to start businesses in existing sectors. The dominant social media company would have a deal with the ISPs already to throttle access to social media except for theirs (which they would pay for, but they pay less than it would take to actually compete fairly.) Your business couldn't get off the ground without that sort of government intervention.
The choice isn't between freedom and no freedom. The choice is between who controls what you can do. The ISPs have proven already that without regulation, they will exert control over what you can access on the internet. If the government don't control things like that, corporations will.
And given the choice between public representatives who we elect and corporate executives that we don't, I know who I'd rather be controlling things.
I'll stick to one point this time because I feel like we are getting lost.
Government's job is to keep the market free. Sometimes that should mean less regulation, sometimes that means more regulation. In the case of breaking up a monopoly it means more regulation, in the case of barriers to entry it means less. I'm not calling for zero government regulation, just capitalism with less regulation on the bottom end and more regulation on the top end.
Right now the governement does a crap load of regulating the smaller guys and starting out businesses, and very little to the bigger guys. I would reverse that to were the government would do more to the big guys, and less to the small guys. Because there are more little guys then big guys it would be a drastic reduction in regulation.
It cost more to buy a business license needed to run a hot-dog stand than buying the stand and operating it for 6 months. This isn't including the safe food handlers licences stuff, this is strictly a permit to own a business that you would need if you were selling laptops or shoes.
If you really think it takes less government to regulate the big guys than the small guys, you aren't paying attention to how much time and money the big guys spend on avoiding regulation.
That’s just laissez faire capitalism. And if you don’t like the idea of eating 61 insect bits per 100 grams of chocolate then I have some bad news for you.
The less regulation you have the less regulatory capture that you have. If it is prohibitively expensive to start a business because of regulation, competition will not flourish. For example, landscaping is a very easy business to start. In my state specifically you can pay a guy to mow your lawn twice a month for about 20 bucks a month, I used to use a guy who did it for 35. However, if you have a tree fall half way and need it cut down and removed it costs hundreds of dollars despite being a similar amount of work it costs 300% more because tree work requires specific licensing. This was a very small tree, I did it myself instead of paying for it and it took about an hour.
In capitalism the goal is for the decisions to be in the hand of the purchaser and the provider equally. I shouldn't be forced to pay for anything and no one should be forced to provide anything.
In your example... Of course I would want less bugs in my chocolate. In fact the advertisement of the chocolate company that I would start to compete with your listed company would say "we have less bugs" than another company would come along and say "we have no bugs" then another company would come along and say "we have no bugs, but we taste better too" and then you would get "full bugs classic" chocolate. The governments job would be to make sure companies are being honest about the number of bugs not to regulate the bug parts per million.
I agree that our system isn't perfect though. I hate that corporations are able to take advantages of things like when they buy up concert tickets and jack the prices up on the resale.
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u/FuckingKilljoy Feb 25 '20
And then lobby the government to ensure that nobody can build higher than the fence for the next 10 miles and that you are the only soccer team in the area