Ask a capitalist how they would prevent monopolies forming in a true free market

>true free market is by definition free of monopolies
Without some level of regulation monopolies will inevitably form. Read up on the Teddy Roosevelt administration. This is why I'm a regulatory minimalist and not an AnCap.

Or the very open and accepted fact that the largest corporations get billions of dollars in subsidies every year by the same politicians they own.

It is exactly how long term macroeconomics works.

If you assume that people want to maximize profit, and that consumers are rational actors trying to meet their material needs for the lowest price, (neither of which are particularly controversial), then monoplies, which are inherently price-raising, tend not to last long because another firm can steal away its customers by undercutting prices.

If you're assuming that its easy to start up new businesses, which is another classic free market assumption, it shouldn't be hard to start up a competing firm.

>consumers are rational actors
They never are.

>he thinks that being the spoiler is profitable

>If you're assuming that its easy to start up new businesses, which is another classic free market assumption, it shouldn't be hard to start up a competing firm.

We're not discussing the concept of a free market but rather its sustainability.

>consumers are rational actors

People aren't rational in general, and marketing that is so advanced you might as well call it social engineering, takes full advantage.

Ideologies = spooks

Capitalism should be treated as a tool and nothing more. It's not possible for real-world systems to be pure and it's foolish to try.

You've never actually studied Economics. Like, at all, have you?

But all right, I suppose you have some sort of competing model to explain consumer preference, that doesn't rely on things like self interest or being able to check prices. Can you show me?

Never post again, kid.

Why should I care about preventing the formation of monopolies in the first place?

The fact that reason is completely unnatural and doesn't actually exist, it's a literal bullshit construct.

>because another firm can steal away its customers by undercutting prices.
Then the monopoly lowers the price again, and is able to lower it much more as they have more production power. Continue until the competitors forced out of the market.

People spend magnitudes money more for the store brand than generic.

If people were rational, commericals wouldn't be implanting insecurities in your brain that you didn't have previously, in order to offer a remedy in the form of their product.

Of course its profitable. The problem is, the sorts of conditions that lead towards monopolies in real life also tend to have something in place to squeeze out the spoilers, which is how the monopoly sustains itself in the first place. If those don't exist, because again, we're assuming an actually free market, spoiling is extremely profitable, at least until more and more people get involved and turn it into a total competition model in which there is 0 economic profit.

What about what I have posted argues against sustainability? It's the monopoly, not the market, that's unsustainable in absence of barriers to entry.

Uh-huh. That's why people pay more money than they have to in general for the stuff they're buying.

Sorry, brand name over generic*

...

Great arguments there.

Production power has nothing to do with the ability to lower prices. Presumably they can, if they have some sort of stored funding (not usually a rational strategy, but whatever), operate at a loss for some period of time in order to drive a competitor out of business, but this isn't a strategy that can be kept up indefinitely, nor is it one that will stop people from flocking to a business where there is potential to make profit.

Only in societies where you have an enormously easier time accessing more expensive store brands than generic ones. Rational use of resources isn't just cash.

I fucked up my wording, If you offer someone the exact same product in a brand name wrapping vs a store brand, and the brand name is more expensive, they will often buy the brand name. Why? Because people are not rational, and they're certainly not rational consumers.

>Production power has nothing to do with the ability to lower prices.

investopedia.com/university/economics/economics3.asp

>Production power has nothing to do with the ability to lower prices.
The ability to produce more or less of a product has no effect on prices?

Your """""understanding""""" of economics is so basic that's its obvious you're some teenager that's done an intro course.

If you offer someone the exact same product, and tell them it's the exact same product, one in the brand and more expensive, and the other a generic and cheaper, they do not usually go for the brand name.

People buy brand name products because of greater visibility, not because "HURR ALL CONSUMERZ IZ CRAAAAY CRAAAY"

Learn to read. I think they teach it in the third grade. Yes, a monopoly firm can lower its prices almost at will, but that will not mean that it is profitable to do so. The monopoly's owners, whomever they may be, also want to make as much profit as possible. Deliberately operating at a loss in order to suffocate potential competition..... isn't profitable. Therefore, unless they think that this new upstart is a one-time thing (and why would they?) undercutting prices is a non-optimal strategy.

The ability to produce large volumes of goods or services does not change this.

>Deliberately operating at a loss in order to suffocate potential competition..... isn't profitable.

Just stop.

businesses will literally lower prices to starve competitors. you really don't know anything about real life do you

>If you offer someone the exact same product, and tell them it's the exact same product, one in the brand and more expensive, and the other a generic and cheaper, they do not usually go for the brand name.

Are you from a different dimension? Because you're sure as shit not from mine.

If you manage to hold a monopoly in a free market then that's the best case scenario for everybody.

Now kill yourselves you filthy marxist fucks

/thread

>If you offer someone the exact same product, and tell them it's the exact same product, one in the brand and more expensive, and the other a generic and cheaper, they do not usually go for the brand name.

The entire concept of marketing says otherwise. These people spend millions on marketing all the time, and it's not just to spread information.

Marketing from large corporations is effectively social engineering and it has real tangible effects.

I'm not saying "THEY CRAAYYYY" I'm saying most people are driven by emotion and impulses, marketing hijacks peoples' emotions and impulses through a variety of psychological tricks to control them.

It is a real thing that happens and a basic facet of our society.

You can tell someone that ibuprofen and advil are literally exactly the same thing, and they will still buy brand name advil over generic store brand.

>Reading comprehension

In real life, there are barriers to entry. Monopolies only tend to form where they are rather high. Or did you forget about that part?

Did you miss the part about visibility? What the fuck do you think all that branding is about? Why do you think that items on the shelves at eye height at supermarkets sell out faster? People are usually in a hurry and gathering information takes time.

>/threading your own post

We are not the ones who need to kill themselves.

A complete free market of equilibrium will never exist.

These people are sending you down the long path. Do you have any idea how many laws there are? It would take literally decades or a dictator to get all of them removed to allow for even the BEGINNING of a process which would allow such conditions.

The turmoil in doing such a thing would result in so much destabilisation or chaos that the populace dissatisfaction would render such a thing impossible.

It's baffling to me that you're so eager to talk down to others when you don't even know the basics of marketing.

Ayn Rand: Under a free system no one could acquire a monopoly on anything. If you look at economics, and economic history, you will discover that all monopolies have been established with government help, with the help of franchises, subsidies, or any kind of government privileges. In free competition no one could corner the market on a needed product. History will support me.

>Learn to read.
Learn to write your thoughts clearly. You say production power has nothing to do with prices then admit that a monopoly or semi monopoly can lower their prices due to their production power but there is a point where it is no longer profitable to do so. The first statement was nonsensical and the second was fine.

>Reading comprehension

Okay? No points here.

This, you're fucking retarded dude. Have you ever even seen a commercial and thought about why they are the way they are?

No history does not support you. Sometimes, businesses get so far ahead of others that they crush all competition. Trust busting, look into it.

Monopolies can only form if you have government protecting the monopoly with things like patent and trademark.

This is a really interesting thread to read and I have little grasp on economics. Does anyone know any online resources to learn interesting aspects?

Do what I did and build

First, understand taxation and how it affects the political spectrum, then authoritarianism vs libertarianism, then move on to more complex stuff like currency, protectionism and trade.

Voila, you have a semi decent understanding of economics.

Read a Sowell book.

The fact that big businesses influence the government to favour them is certainly not proof of the claim that almost all monopolies are the product of government corruption or interference

Do not listen to this guy.

End yourself you disgusting marxist.

You're right, I was just backing up the angle that some large corporations are propped up by the state.

whatis2big2fail

The biggest companies would die from their own incompetence, but the government literally bailed them out with tax payer money.

In a true free market, they would have died from their retarded blunder.

Maybe the part where you keep shouting MUH MARKETING without ever actually making an argument or defending your notions in any substantive way.

Yes, learn to read a chain of response and argument. The production power is NOT what allows a firm to lower prices at will. Any firm can set its price to whatever damn thing they please, if they're not worried about little things like actually making money. It doesn't matter if their output is one unit of whatever or an infinite amount.

Now, assuming that you have a monopoly being challenged in whatever field it is, they can in fact try this strategy, BUT IT HAS NOTHING TO DO WITH THEIR PRODUCTION CAPACITY. Their ability to survive such a temporary loss has to do with a presumed greater capacity to gain credit, to use their existing infrastructure and capital to survive a period of loss by downsizing, etc, not their ability to churn out more shit. I have stated this quite clearly, and I'm not sure what the problem is.

If you don't understand why deliberately operating at a loss to fend off a more or less infinite tide of challengers isn't profitable, yes, I have to wonder at your ability to read.

That's true of all businesses, not just monopolies. Capitalism can only exist with a state.

>But without government, monopolies just won't exist! Companies will just magically decide to not to form them!

This is always the answer, even if it doesn't make any sense.

The day of the rake when?

Marxists need to die

Seriously man, I want you to confirm for me that you understand that the following two ideas are not the same.

>some banks and corporations are propped up by governments
>monopolies can form without government interference

Those are different ideas, one being true does not make the other false.

What is your definition of marxist? People that understand marketing and the fact that monopolies can and have formed without government assistance? You guys are as irrational as SJWs

Name me ONE monopoly that has existed without ANY government assistance to it.

What is the ancap/libertarian/muh free markets response to the idea of natural monopolies? Do they just pretend that they don't exist?

>marxist

>People that understand marketing

... you don't understand what I was saying. I was saying that you're attributing the label of marxist to people because they are explaining the purpose of marketing and that monopolies can exit without government intervention.

US Steel, Standard Oil, Hearst's media monopoly for starters.

Name me ONE business that has existed without ANY government assistance to it.

Hey, have some of you guys played his games? They are awesome! Definetly worth the buck.

Competition

the black market

>BUT IT HAS NOTHING TO DO WITH THEIR PRODUCTION CAPACITY
Of course it does. Much of their existing infrastructure and capital is tied to heir production capacity and the ability to produce more or less of a product is one of many companies compete.

Where do products sold on the black market come from?

My anus.

The only type of system that would work is a well thought out mixed system. Purely Socialist or purely Capitalist systems never work in the long run.

This. A hybrid is ideal and has been shown to be the most successful system on Earth. Norway, Finland and Iceland dominate.

Well even your anus exists due to government assistance, so QED

>barely spend on their military
>barely project any power

If they proportionally spent half as much as the US does on defending the free world, they'd be in ruins.

>and that consumers are rational actors trying to meet their material needs for the lowest price
It's funny how that relies on the assumption of perfect and free flow of information, and you neglect to even mention it because you know full well that is impossible and completely shatters your ideology.

Finland isn't even in NATO you stupid burger

>>ask a capitalist how they would prevent monopolies forming in a true free market
Never allow government to accept money from monopolies and never institutionalized bureaucracy.
BOOM.

Next?

>Well even your anus exists due to government assistance

The absolute state of statists

Your meme sheriff is a pussy, btw
reason.com/blog/2017/01/26/milwaukee-sheriff-david-clarke-whines-ab

It's pretty true though. The anus was born in a hospital which was certainly heavily subsidized by the government, if not outright owned by it (depending on the country)

>capitalism
>ideology
ok kiddo

>It's pretty true though. The anus was born in a hospital which was certainly heavily subsidized by the government, if not outright owned by it (depending on the country)

okay?.... and this proves what again? I'm not the person you are arguing with but this is ridiculous he could have been born in a hospital that wasn't subsidized and in a stateless society I assure you there would still be hospitals.

t. never tried starting a business

Maybe, maybe not. I highly doubt hospitals would exist in a stateless society. Anyway, he wasn't born in a stateless society, so it's irrelevant. You might want to look at how this argument started to understand.

Free trade. Competition.

Government regulation has created far more monopolies than it has ever destroyed.

That's like physics in a frictionless vacuum. Great on paper but doesn't hold up in application.

So why does private healthcare exist then?

The existence of free trade does not necessitate the destruction of monopolies, it helps facilitate them at first. For instance, Carl Menger stated that as certain needs arise in civilization certain individuals will provide goods or a service that no one else will. If it is unique and popular, it will form a monopoly until someone else capitalizes on this.

Now, due to intellectual property and high capital investment, this can create a long standing monopoly, but as was clearly shown by the father of all Austrian and holy, monopolies DO naturally occur in a free market. They are inherently necessary for progress to occur.

Because of the state, like all private companies

Monopolys are a good thing in certain circumstances. The government in (most) countries is generally accepted as having a monopoly in healthcare, primary education, military, infrastructure projects etc. It depends on how this monopoly was formed

How about the wide-reaching pro-competition regulation that the EU uses to great effect?

Not all pro-market people think the government is useless/evil. It's like saying Democrats believe every political judgement should be made via referenda.

A very good example is the FDA. The reason Mylan was able to jack up the price of the Epipen device to 600$ was because their only generic competitor had to be recalled and the FDA slow rolled approval for other generics.
Pharma spends millions lobbying the FDA for approval and millions lobbying the FDA against the approval of competitors.
An even better example is Emflaza, a drug that to help alleviate muscular dystrophy. The drug already was being used in the US by importing it from europe at around 1000 dollars a year, a practice that would have ended when Emflaza would have been released.

Emflaza was to be priced at $89000

>>If a monopoly forms for whatever good or service it is, someone will notice that they can undercut this service's price
That's never how it works.

When one business gains a sufficiently large percent of the market share they can bully newcomers out of the market by simply jacking up production and reducing the price of the product below profitability. They can take the hit because they're huge and have tons of reserve cash, but completely starves newcomers who were relying on that revenue to grow. Once the newcomers have been priced out, they can raise prices back to where ever they want them.

>argues about things that are negative
>does nothing to correct it
i bet you feel superior huh

Monopolies are naturally destroyed in the pursuit of immediate larger profit.

If the monopoly is long standing it is due to high barriers to entry, and does need to be fixed, but the question should be why the barriers were so high. If it's something that is literally illegal like the situation you've mentioned, the company gets a punitive fine.

The antitrust laws are in place, because more of a good gets sold if monopolies are not in place and the suppliers get to compete for different market shares.

Walmart does a good job of it.