RE: capitalist religion (was: NANO: _Forbes_ cover story)

From: Miriam English (
Date: Fri Jul 20 2001 - 00:06:27 MDT

At 10:34 PM 18/07/2001 -0700, Reason wrote:
> > What about when a small company tries to enter a market, the big players
> > reduce their prices to below cost so as to put the new entrant out of
> > business? That is a tactic very often used.
> >
> > How about this one: the big player buys the small startup.
> >
> > There are plenty of other tactics too, that are not so above-board.
>Well, yes. None of which is particularly bad in my book.

My point was not that it is bad -- just that it happens. Power concentrates
in fewer hands, and there is real danger in that.

> People will do
>this. My only problem is with systems of regulation that stop people from
>acting in the way in which they tend to -- it's wasteful of societal

Well... it is not really a waste of resources if it protects us and the
economy from the wastefulness and retarding effects of monopoly.

Do you have a problem with laws that stop people shoplifting? That is a
common way that people tend to act. Is it wasteful to spend effort on
preventing theft? :-)

>I should emphasise that the only yardstick that I care about is the rate of
>technological advancement; a vigorous corporate environment in which
>anything goes -- including all of the above mentioned tactics and many
>others -- is par for the course and will lead to better and faster
>advancement. What I don't like is an environment in which anything goes
>except trying to compete with the incumbents -- this stops things from
>advancing. Darwinism with healthy mutators, but regulation cuts down the
>mutation rate.

I agree that rate of technological advancement is one of the most important
things... possibly *the* most important challenge.

I just worry that unqualified enthusiasm for partial solutions could lead
us to burn our bridges so that it becomes difficult or even impossible to
get back a truly diverse marketplace.

> > >All monopolies are unstable;
> >
> > In the long run, I agree with you. What I think worries most
> > people is the
> > incredible damage to the people and the economy that they can wreak along
> > the way. Sure, they have to fall eventually, but they could last hundreds
> > of years... do you think the next generation should have to deal
> > with that legacy?
>What damage can a monopoly do if there's no regulation that prevents small
>competitors from arising at a fairly rapid rate? Monopolies spur the
>development of other companies and new technologies, because they
>demonstrate the existance of a market.

The whole point of monopolies is that they will do anything to retain their
monopoly. Abolishing government and its ability to break up monopolies
won't help. Monopolies happily trade at a loss for long periods in order to
destroy small competitors. Monopolies use blackmail to stop other retailers
from stocking the competing product.... and so on. The tiny barrier posed
by regulations is nothing even compared to the investment capital required
for production equipment, distribution channels, etc.

I can't help feeling you have a bit of a blind spot here.

> Sooner or later one of the newcomers
>will take down the giant, and I think your timescale of centuries is way out
>of proportion. Companies don't last much beyond decades in their chosen
>market even with all the help of a friendly government to keep the
>competition down.

I agree that they are unlikely to last forever, and my guess may be way
out, but it might not either. Neither of us can say. But it is a truly
dangerous threat. It is no use saying that abolishing the governmental
controls will make it all right, because you can not know that. You have to
admit that governmental subversion is not the only way monopolies control
their marketplace. Nobody knows how difficult it will be to get rid of them
after the only other group powerful enough to break them up is eliminated.

>The damage that a monopoly causes when there is regulation to prevent new
>companies arising in their space is to retard and slow down development

True, but that is only one of the ways that monopolies hurt the economy,
and the other ways happen regardless of whether there is a government or not.

> >
>My take on open source is more of an efficiency one: it's good because
>technology doesn't end up lost in copyright when companies die, because it
>spurs growth by making use of otherwise idle resources, because bugs are
>shallow. And a million other reasons. Everything except documentation.
>When the open source movement can figure a way to make documentation
>happen well and happen early, without the intervention of a company, it'll
>conquer the world.

I gotta agree with all that. :-)

>People will always abuse power (for any definition of the word 'abuse').
>They will also always seek to accumulate it. You cannot prevent this from
>happening, so why try? It would be principled, but a waste of resources
>better devoted to other causes that would have more beneficial effects.

You will always catch diseases, why bother trying to avoid them?
People will always die in car accidents, so what is the point of driving on
the correct side of the road?
I can't believe you are saying this Reason!

There *are* ways to mitigate this tendency to concentrate power. We already
use some of them... some societies more successfully than others.

>Again, I think that this is a consequence of our inability to practice a
>decent form of government. This leads to an inability to practice more than
>a hobbled, protectionist form of capitalism. Now if we had a libertarian
>participatory democracy of the form described in Enders Game (to save myself
>some time typing here, damn I'm lazy), or at least some form of government
>in which we did away with career politicians in favor of people who actually
>know something about each issue that needs addressing....

Certainly, I am the first to agree that the government needs a shitload of
improving. I just worry about this baby-bathwater thing.

Hmmm... Enders Game... book? Orson Scott Card? I'll get it if you think it
is a good'un. Even though I have plenty of fiction reading at the moment.
Just bought the 4th Harry Potter book, all 600 pages of it. Delightful
series that I heartily recommend. :-)

>But that's a whole other thread to avoid getting into.

Heheheh :-)

Best wishes,

         - Miriam

Q. What is the similarity between an elephant and a grape?
A. They are both purple... except for the elephant.
Virtual Reality Association

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