Free Market Capitalists, How should natural monopolies be addressed?

submitted by AntarchomachusAnarchist from self.politics

We do not want to have duplicated infrastructure because it is economically inefficient. We generally do not want 10 water companies each laying their own lines to every house, it would be a tremendous waste of resources. At the same time, a monopoly that is allowed to exist unregulated is usually a bad thing. Those of you who are free-market capitalists, what is your solution?

all 20 comments
sorted by:
top
newinsightfulfun

[–]Chipit 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (8 children)

Regulation? It's generally to be shunned but it's unavoidable in certain cases.

Unfortunately as soon as the regulation starts, so does the corruption. It's a tough nut to crack. If government weren't so overwhelmingly awful it would work a lot better.

[–]la_cues 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (3 children)

Yes I agree.

Some people think that once a market has any rules it is no longer "free", however I think laws could be restructured in a way that upholds the "free market" for the people, not for corporations.

Laws that would help:

Reduce barriers to entry. (Especially needless and stringent regulations, and those that have a high cost to meet. Many times these regulations are lobbied in, to make it easy for a corporation with millions of dollars to meet but impossible for the average citizen to meet; ie industrial level metal detecting for meat producers. Pointless regulation for small scale or family farms anyway!)

Abolish lobbying.

Abolish the idea of a "publicly held company".

Restructure systems like employment law for sole proprietorships.

Restructure tariff and import/export system? Restructure tax brackets? (Tax only at the corporate level, no tax for individuals)

Pretty much the laws should simply always prioritize the rights and freedoms of the individual. Then, I think economically more people would act in ways that would naturally not favour monopolies. Such as supporting community and local more, because Joe down the road actually can run his own dairy and he's not regulated out of the market by default.

edit: To touch on natural monopolies more specifically: I'm thinking the only truly fair way would have public infrastructure like water/electric be totally "nationalized" (I don't know what term to use on the municipal level?)

The "companies" that run the service exist wholeheartedly for the people, running at 0 profit and charging cost through toll to its users. (very important: don't tax everyone for a service if they may not use it)

[–]Chipit 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (2 children)

Reduce barriers to entry.

Regulations increase barriers to entry.

Abolish lobbying.

The companies that increase the barriers to entry will never tolerate this. They will use their wealth to corrupt the government regulators and prevent this.

[–]la_cues 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (1 child)

Regulations increase barriers to entry.

Not if the regulation specifically ONLY removes the potential power of a company in a "monopoly position".

So, a regulation that seeks to minimize regulations for the individual looking to engage in market.

[–]Chipit 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

It would be nice if it worked that way. But it doesn't. There's too much money floating around in monopolies, and they can use that money to influence government regulators who are all too open to being bribed. After their term they go to work for the monopolies at high salary.

[–][deleted] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

best to keep in mind a system will never be perfect but that we should still do the hard work to improve things and try to get close to perfection.

[–]AntarchomachusAnarchist[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

Agree Popper. Thats a lot of what motivates me to discuss issues like this.

[–][deleted] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

yup first have to discuss things to then come up with a possible solution

[–]AntarchomachusAnarchist[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Thanks Chipit, appreciate your take, and tend to agree with you. Was curious to see what those most opposed to economic regulations thought about this

[–][deleted] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (8 children)

monopolies don't happen naturally they get support from the state

[–]AntarchomachusAnarchist[S] 2 insightful - 2 fun2 insightful - 1 fun3 insightful - 2 fun -  (7 children)

A natural monopoly doesn't refer to one that happens naturally - it is what economists call a type of service where it is generally considered desirable that only a single infrastructure exist. Water and electricity are the typical examples of these, although cable and the internet have aspects of this as well

[–][deleted] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

yeah no natural ones exist is the point

[–]fschmidt 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (5 children)

In these rare cases, the local government should run it. I am a free market libertarian, but I think monopolies are even worse than the government.

[–]AXXA 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (4 children)

The government is a monopoly.

[–]fschmidt 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

But the government isn't for-profit. The worst thing is a for-profit monopoly.

[–]AXXA 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (1 child)

I disagree. The government not being for-profit means that they have no incentive to avoid waste and corruption. A for-profit monopoly has limited incentive but at least they have some.

[–]AntarchomachusAnarchist[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

Hey AXXA, I'm sympathetic to this, but Ill say this:

It seems like it would be easier for the public to hold the government accountable through elections for potential mismanagement than it is for us to as voters to force a private company to do what needs to be done.

I'll offer my experience in California where a privatized monopoly power company (PG&E) is burning down the state and regularly causing outages due to an unwillingness to spend to place the lines underground in areas where this is obviously necessary.

Either the state needs to take it over , or we need some way of regulating this that will actually work

[–]AntarchomachusAnarchist[S] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

Very true, but at least in theory the 'stakeholders' are the general public rather than private individuals. I'll grant that there are complications in terms of what happens in the real world

[–]Cornfed 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

They would presumably let the monopolists do whatever the hell they want and destroy the society until the system collapsed and then you wouldn't have "free market capitalism" any more. When dickheads confuse tactics with ideology you get these self-defeating death cults.

[–]AntarchomachusAnarchist[S] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

Cornfed, this is the source of my own reservations around this idea - I fear this is exactly where we are heading. However, I do know some very intelligent people who are passionate about free-market capitalism, so I wanted to hear what they might have to say.