It's hard to maintain monopoly status in a free market when you have to deal with all that competition and whatnot.Between other companies' low prices and new, updated products entering the market each day, it's almost like Rich Uncle Pennybags is a thing of the past. But fret not!The politicians of the world would like to offer anyone dead set on controlling an entire industry the chance to shine. So come one, come all government agencies, cronies, and all their friends as we present the five best ways to create a monopoly and to ensure you never have to compete again. 1. Regulations.When the cost of doing business is high, make it higher. Small firms can't survive government imposed regulations while bigger firms can certainly bear the burden, at least temporarily. Taxes, mandates, and especially "safety regulations" (e.g., clinical trials at the Food and Drug Administration) will wipe out your competition before they even have time to ask what the new rules mean. Then hire a lobbyist in Washington. I'm sure he or she will come up with a good reason that the industry should adhere to stricter and more expensive guidelines. 2. Subsidies.There's no such thing as a free lunch. But, when the government is paying for it, the lunch sure doestastefree. Subsidies offer an alternative, consumer-driven focus to acquiring monopoly status. Arbitrary revenue-boosts from the government will allow you to reduce prices to essentially nothing, all while maintaining profitability. You can give away (what used to be) a $10.00 item for free and, with the help of $1 million in subsidies from our nation's capital, you can stay afloat. Your competitors, however, will have to make do with reality. Even if they somehow manage to slash prices to $1.00 per unit, what kind of customer will pass up free? The subsidy doesn't have to last permanently, either. It will only take a few weeks before your competitors begin to default on paychecks and other loans without transaction revenue.You can also take this route without the government revenue injections if you have a contingency plan in the form of a bailout. Both you and your competitors will go bankrupt, but only one (fingers crossed it's you) will receive CPR. 3. Nationalization.Shout out to government officials! This one's for you. The easiest and most straightforward way to create a monopoly is to simply write the monopoly into law. Federal control over an entire industry much like we've done with the United States Postal Service is effectively the prohibition of competition from the private sector. But don't ever reference the USPS. It's a terrible (albeit realistic) example of a government monopoly, what with its inefficiency, perpetual deficits, and general lack of regard for any sense of advancement in mail delivery. Rather, tell everyone you want to monopolize "for the good of the people" and then talk about the Department of Education or some other public sector operation people don't like to criticize in front of company. 4. Tariffs.Neighbors can be annoying. Some are loud and others are strange, but the absolute worst neighbors are the ones who compete with you in the marketplace (and then win). In the beautiful Southwest, this neighbor is Mexico. Companies south of the border produce certain commodities much more cheaply than American companies do, and they have the nerve to think that they can export their inexpensive products to the United States on a whim. We don't think so. If Mexican companies sell sugar for $2.00 per pound and you charge $3.00, don't let them satisfy customers like they own the place. Make sure they pay an import fee of $1.01 and it's guaranteed you'll win new business one cent at a time. Better yet, propose a complete ban on the sale of foreign goods in your state, city, and town until you're so isolated from the rest of the world that no one has a choice to buy from anyone except you. 5. Intellectual property.If you have a good idea, why let anyone else have the same one? Take that idea, write it down in the broadest words possible, and send it straight to the United States Patent and Trademark Office, where public officials will (hopefully) grant you the exclusive right to use it. And don't worry, if someone else thinks of the idea one day later ... too bad. You filed first. Even if someone halfway across the globe comes up with the same idea independently ... too bad. You filed first. Milk your monopoly for all it's worth. Put a huge price tag on that beast and feel free to ignore quality. What are consumers going to do: purchase your exclusive product elsewhere? We wish you the best of luck in your venture. You deserve it.
What utter crap. A company in a monopoly or duopoly position can maintain that status in a free market. Method 1 Any time a new entrant tries to enter the market, prices are lowered to ensure that the new entrant loses money. Once the new entrant goes under, prices go back up again. Method 2 Buy up or merge with others to own all the resources. If one company effectively owned all the coal mines in Australia, where would new competition come from ? Get big enough and buy all the coal mines in the world and nobody will ever compete with you, in a completely free market. What would happen if BHP and Rio merged into one company and then took over everyone else ? There is a reason why anti monopoly laws exist in the first place. Not saying I support any of the other points mentioned above, but the idea that free markets automatically take care of monopolies is ridiculous.
Actually, your own post earns your 'ridiculous' and 'utter crap'. Take your "Method 1", whether or not a new market entrant can make a profit at ANY price, is a function of how good he does the job on that market, the price at which is just the consequence of this, and that applies to the new market as well as existing market participants. Existing market participants that lower their prices, lower their profit aswell, and can as well go under as the new market participant, without any price-distinction, simply because the price affects both new and existing. So actually, there is not any 'specific-to-the-new-market-participant' reason to 'go under'. A temporary price drop is what it is: temporary, and new market participants can cope with it as well as existing can. Then "Method 2", if in a free market one company can own all resources, then that is simply because everybody choses the products/services of that company. It's a passively undergone 'reward' based on free decisions to buy or not buy, and there is nothing wrong with such 'monopoly'. And if such a 'Great' company then goes the crap way, customers will revise their choice, and opt for other products / companies, and if the latter does not exist yet, they will arrive, simply because crap products/services create a market gap ready to be filled. Your two last sentences are typical for state adepts. They claim free markets can't cope with this and that but their starting point is state. Your support of 'some points' is typical, that's what state does: it interferes.... selectively... using force. State itself, it's primary difference with other market participants, is where the circle starts. What happens when a company starts to treat / force customers to purchase whatever at an unnegotiatable price? It becomes a monopoly. Of the bad kind, because legal, unpunished for a long time, hence those 'business' cycles. State business.
Let's apply Method 2. to the biggest and worst monopoly of them all before we worry about publically traded companies which (nearly) anyone can buy into like BHP and Rio. Does Trew have any examples of Method 1 & 2 actually occurring in real life without resorting to one of the five ways?
Trew please provide just ONE example of a monopoly that exists or has ever existed without any of the above. Thanks Ill help if you like, you could try DeBeers, Standard Oil, Microsoft, OPEC, Woolies/Coles, Wallmart, the British-India Company(whatever it is called), Google, etc. Just pick one and explain how it exists/existed without any of the 5 reasons above. Or retract your statement
Ouch!!!! Good choice Trew, original members of OPEC were Iraq (a military dictatorship), Kuwait (a British protectorate), Iran (a country who autocratic leader was installed after a military coup led by the US gov), Saudi Arabia (a country led by an absolute monarchist racking up huge debts and engaged in extravagant spending) and Venezuala (with it's economic interventionist coalition of parties at the time). Hang on, maybe not such a good choice. :lol:
I only posted 2 lines and you didn't read past the first. Who controlled the oil supplies before OPEC ?
I read past the first line trew, I just didn't respond to the second. In regards to OPEC, it was set up by governments wonderfully versed in steps 1-4 of the Silver Saviours OP. In regards to the second question, maybe the Seven Sisters? LMAO, ironically, the person who coined this phrase was the head of a state owned oil company. Or maybe ARAMCO (controlled by the US gov't at the time). The point is, we haven't had a free market in the past century, it's pointless trying to use modern day companies as exemplars of poor free market practice because the free market doesn't exist. Government interference which has been exploited by unscrupulous business enterprises has been the norm for over one hundred years.
You don't need to create a monopoly if you already own the currency, everything else is an afterthought. Hell if it all go's to shit you just get the taxpayers to bail you out right ? BTW it is customary to quote a source. http://www.zerohedge.com/news/2013-10-31/guest-post-5-ways-create-monopoly
The source doesnt add anything to the debate though does it Trew Is that an appeal to authority (yourself) ? When debating it isnt wise to act like you trancend all of human history with great knowledge. Either ask more questions, debate further or concede.
No I came to the realisation that I was the only one posting that didn't agree. So I'll leave all the rest of you to pat each other on the back on how you're all right and the rest of the world is wrong. And perhaps without any disagreement the thread will just die :lol:
Trew its easy for discussions like this to get personal so lets just start again if you don't mind. In light of the arguements made so far In response to your first post what do you think? Do you think the responses were incorrect? Do you have some conflicting evidence that we can discuss? Do you think the posts have valid ideas that might change your opinion, even just a little ?
