12-01-2004, 05:58 PM
Chaerophon,Nov 19 2004, 04:25 PM Wrote:Economic theory argues that monopolies cannot exist under laissez-faire because a competitor willing to lower profit margins in the interest of increased market share will always break them up. Economic practice demonstrates otherwise. Because of their dominant market share, refusal to allow workers to unionize and wholesale purchasing, they can lower prices to sub-cost levels for months at a time, driving competitors out of business. Once you're the only game in town, wage levels are whatever you want them to be. Take it or leave it. Hell, they'll employ debt-contracted Guatemalan slave labour (not wage-slavery, SLAVE LABOUR) in Mexico if they can get away with it. Not a myth, it is well-documented from academic sources. It's nice for legislation to fall on the side of the worker once in a while.
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One benefit of large companies (near-monopolies) is efficiency of scale. Many large firms can offer products and services at lower prices due to volume purchasing, overhead being a smaller percentage of total cost, and that overhead being distributed over a larger income base. When a large corporation moves into town many smaller businesses will suffer and may dry up. Consumer education and preference can only go so far because everyone wants to save a buck.
Saying that, I do believe that true monopolies have abused their power and consumer trust, time and time again, through history.
The Bill of No Rights
The United States has become a place where entertainers and professional athletes are mistaken for people of importance. Robert A. Heinlein
The United States has become a place where entertainers and professional athletes are mistaken for people of importance. Robert A. Heinlein