I'm somewhat of a socialist and since theres a socialism topic floating around I thought I'd start this, with a quote and a question about the faults of a single minded "truth"


"What could be more naive than to believe in one rather abstract approach to human life based on on an expectation of economic leadership based upon a single and highly specific theory of economics? And what could be more innocent than to expect the world to sit back and watch the theory make its way uninterrupted for as long as it requires in order to succeed in its own terms? And even more naive: that everyone would wait expectantly for the trickle-down or discipline or inevitability of this approach to successfully reformulate all the other aspects of our lives"





"Do economic theories work best when there are multiple approaches, some of them contradicting others, thus reflecting the complexity in which we actually live?"

so is this thread about the flaws of any one single minded "truth?" or is it about the flaws of capitalism?

I'm not sure, clearly he's saying that "free market capitalism" as a single approach is wrong and how long do we have to try that approach before we recognize it doesn't work? But that's an interesting argument, considering we haven't actually tried that single approach before.

Haven't we though? What would you call the Gilded Age if not a period of complete capitalism?

Capitalism is not necessarily free market. Free market capitalism requires that monopolies be limited (as monopolies result in a non-free market), and it seems there were a few monopolies that came into existence during the Gilded Era. It definitely tended more towards a free market though, with more laissez-faire economic policy and the end of the spoils system, and I think the benefit of that can be seen in the general prosperity enjoyed until around the turn of the century.

What about all of the suffering that period caused that resulted in the formation of labor unions and such?

Did you miss the part about monopolies?

No, dude, I didn't miss that part. Monopolies were the only cause of labor woes?

i've been working a lot lately and haven't really had time to post, but the gilded age has always fascinated me. i'm going to try and hunt down some interesting economic history and contribute to this thread when i get a chance.

Please do, I always like hearing what you have to say on the subject.

I don't know, but the presense of monopolies indicates the lack of a truly free market.

How so? If you break up monopolies or regulate them, doesn't that imply that the government is not leaving the market free to its' own devices? Shouldn't a truly free market be free of any government involvement/regulation, as in "hands off?" Wouldn't a lack of government involvement mean that monopolies would be free to operate?

I've never understood that either. A libertarian friend tried to explain it to me once but it just sounded like regulation to me.

you're both right. setting aside what has led to the creation of a "monopoly" in the first place, any regulation or antitrust litigation of the "monopoly" is contrary to free market principles.

free market capitalism requires that business be left alone, no matter their size.

I guess that's the difference between "Free Market" and "a free market." Sure, antitrust regulation is regulation, but the paradox is that a monopoly interferes with a free market because the necessary element of competition is removed. As soon as someone has a monopoly (or there is an oligopoly) in any market, that market is no longer free. It's just that instead of that market being controlled by a government, it's controled by a company or a cartel.

But I thought that the market always worked itself out for the better. Wouldn't the endgame of a monopoly mean that isn't the case?

With the influx of libertarians to the board, S_D seems almost socialistic.

not necessarily.

suppose there are five companies in any given market. the only way for any one of them to become monopolistic is to outcompete the others. that is, the only way for company 1 to garner a larger share of the market than company 2 is to either charge a lower price for a product of comparable quality, or charge the same price (or perhaps a little higher) for a product of better quality. in short, corporations only become monopolies by offering either better products or lower costs. not exactly as exploitative as they are made out to be.

but markets are never as nice and neat as that. regulations and antitrust introduce incentives that often benefit the existing firms at the expense of consumers and the public. market power and mergers are animals of a different, though not necessarily harmful, stripe.

and if i wasn't so fucking busy, i'd try and explain some of the nuance. maybe later.

Right. A company can only become a monopoly through superior products, lower prices, efficiency, etc. But once they become a monopoly, they're no longer required to offer that. If you're in control, you no longer have to worry about providing the best service or product for the best price, because people don't have another option. If you have too big a market price and some competition comes along, you can undercut their prices and take a loss for a little while because you have the resources to do that. If you have power in several markets, you can simply undercut one market in order to destroy competition while subsidizing it with income from a separate operation.

Clearly antitrust regulations need to be in place to preserve a free market, but of course, only when there is actually a monopoly.

then how can people be in favour of selling off government corporations that are monolpies or are guaranteed to be monopolies. Like electricity and water which have been tryed in private hands and failed horribly. How can an item such as electricity benefit the consumer in any kind of free market system? How can different companies that run generation, distribution, connections, service, that all need a profit in the end be any cheaper than a public company or government wing? Especially with something like electricity that needs to be consumed now and cannot be effectively stored in large quantities.