Free Market Economics

John K Clark (
Thu, 10 Jul 1997 23:12:34 -0700 (PDT)


"Bobby Whalen" <> On Thu, 10 Jul 1997 Wrote:

>Microsoft comes out with a new, more bloated version of their
>software, and Intel in turn has to come out with a new and faster
>chip for it to run on.

Nobody has a gun to your head, if you don't like the new "bloated" version
then don't buy it and stick with the old one. If many really felt that way
Microsoft would be out of business. They're not.

>What I am saying however, is that a corpocracy is not a free-market.
> A good example was in the early part of this century when
>Rockefeller would open up a new gas stations next to small
>independent operators.

It's interesting that every one of the people who ran crying to the government
and later testified that Standard Oil's predatory tactics made competition
impossible, nevertheless somehow managed to amass huge fortunes competing
with Standard Oil. Take David P Reighard for example, when Standard Oil
threatened to lower the price so much that he would lose money on every
gallon he sold, Reighard called their bluff, he knew Standard oil sold a lot
more gallons of oil than he did, and so would lose a lot more money than he
would if they tried to do that. Standard Oil realized that the only way to
stop Reighard was to buy him out, which they did, at a huge profit to
Reighard. What did he do with all that money? He built an even larger oil
refinery of course. Standard felt they had to buy that one too, at an even
larger profit to Reighard. Are you starting to see a pattern here?
In all Reighard did this 3 times before Standard caught on and gave up,
making him one of the riches men in the country.

>When one of his stations first opened they would charge less then
>wholsale prices until the other guy COULD NO LONGER COMPETE and go
>out of business.

Being small is absolutely no excuse for not being competitive. I manufacture
99% of the worlds widgets, you make 1% . I want to drive you out of business,
so I figure I'll lower my price until you go broke and then I can jack them
up to anything I want. So now you louse money on each widget you sell,
the trouble is I do too. I have 99 times as much money as you do, but I'm
lousing it 99 times faster. Even worse, because the price is very low the
demand for widgets is huge, and if prices are to remain low I must build
more factories and increase production. I'm lousing money faster and faster,
meanwhile you just temporally halt production in your small factory and wait
for me to go broke. It won't be a long wait.

John K Clark

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