Socialism Creates Monopolies, Capitalism Destroys Them

Originally posted by mnemeth1


In a free market, competition always reduces profit margins to zero.

Only through non-competitive laws and regulations can a monopoly come about. Only through the force of government intervening in the market can a monopoly form.

In fact the entire point of a socialist economy is to have the State monopolize everything!

People, please stop feeding the trolls.

The poster who created this thread, and wrote up such a genius opening post, has obviously never seriously studied economics at any point in their life.

The entire purpose of this thread's creation is to throw around misconceptions about buzzwords like "socialism" and "free market" without having any serious conceptual understanding of what they mean and how they are applied to real-world economics. Any attempt to correct the OP on the fallacious logic contained within the thread's title and opening argument will only be met with more brain-numbing ignorance.



mnemeth1: hopefully when you move up to the high-school level, your teachers will give you a somewhat better understanding of how monopolies form, and how market regulation does the exact opposite of what you believe it does. If (as I fear) you have already graduated, I would suggest you do some independent reading on the subject before you publicly assert your stance on subjects that you obviously do not fully understand.

reply to post by drwizardphd


star for you - while i agree "don't feed the trolls"

Sometimes it's just too irresistible to hold a mirror up in their face.

And since there are a vast abundance of much greater thinkers out there than myself, allow me to present two of the greatest of our generation....and the topic they so masterfully cover:






[edit on 29-12-2009 by Snarf]

reply to post by mnemeth1

You argue regulation is necessary to stop the abuse of labor in China, I argue that its not our business to regulate the Chinese economy. If the people of China get fed up with the tyranny, they will act to change it themselves.

In the mean time, our government could do a lot to discourage the labor abuses that don't involve regulating business. In fact deregulating production industry here would help enormously by drastically reducing domestic production costs. Tax cuts would also be a huge benefit to domestic producers. Allowing interest rates to rise so the country can capitalize its savings would be huge.

Right now our country is buying everything it needs on a gigantic credit card. All this credit is another massive cause of our depressed manufacturing sector. When you buy everything you need on credit, you don't have to make it yourself. Inflated dollars is the US primary export.

We give China inflated debt, they give us real goods and services in return. We aren't forced to make anything ourselves.

I was actually arguing that without regulation there is nothing to stop a company from a huge swath of unethical behavior.
We do not use child labor or slave labor in the U.S. because of regulation.
We do not allow embezellment or insider trading in the U.S. because of regulation.
Regulation is there to halt behavior that is toxic, even halting companies from dumping waste material into the water tables.
To drop all regulation would create an unlivable society with perpetual hazards.

The bit about tax credits, sorry that part is funny. Large companies don't pay taxes as is. Many of them get checks in the forms of subsidies. Possibly the most notorious form of that behavior is in the American Steel industry.
Instead of forcing innovation to compete: they get subsidies resulting in a more expensive production of goods, which results in more subsidies and tax breaks to keep going. Course: The Steel industry was and perhaps is a matter of national pride.
As for not being forced to make anything ourselves. That part is just dangerous. How long before we lose the skills in our workforce to produce our own things?

If you have not watched Mike Rowe talk about jobs: I really encourage you to spend the 20 mins to do so, it is well worth it.

There is aboslutely nothing Laissez-faire about our banking and financial system.

Nothing.

Free markets demand sound money, interest rates that are controlled by the market, and money creation that is controlled by the market.

Free market banking has no moral hazards.

Our system of banking is completely Marxist in every sense of the word.

I was not limiting it to the banking system. I was meaning the corporate business structure. Make no mistake: Banking is just a business. An influential and powerful business, but it is what it is.

I can do that too ya know.


*ahem*


People, please stop feeding the trolls.

The poster, drwizardphd, who replied to this thread, and wrote up such a genius responding post, has obviously never seriously studied economics at any point in his life.

The entire purpose of his posts creation is to throw around misconceptions about buzzwords like "socialism" and "free market" without having any serious conceptual understanding of what they mean and how they are applied to real-world economics. Any attempt to correct drwizardphd on the fallacious logic contained within the thread's title and opening argument will only be met with more brain-numbing ignorance.



drwizardphd: hopefully when you move up to the high-school level, your teachers will give you a somewhat better understanding of how monopolies form, and how market regulation does the exact opposite of what you believe it does. If (as I fear) you have already graduated, I would suggest you do some independent reading on the subject before you publicly assert your stance on subjects that you obviously do not fully understand.

[edit on 29-12-2009 by mnemeth1]

reply to post by drwizardphd


Meh, I'm here because I am enjoying the conversation... Course it is keeping me away from my _javascript-which is currently sitting in my editor-I imagine hissing at me and taunting.

Still, sometimes it's enjoyable simply to debate. I dare say nobody who has posted in this thread has had more than a couple courses in Economics-Ive only had five or six courses as part of my MBA program (incomplete I should add, had to halt school when my work week shot to 65.)

(edit)
Please all, watch that Mike Rowe link I posted one up from this. You won't regret it.

[edit on 29-12-2009 by lordtyp0]

Originally posted by lordtyp0


I was actually arguing that without regulation there is nothing to stop a company from a huge swath of unethical behavior.

yes, actually there is.

Its called a voluntary work force.

If a company engages in horrible treatment of its employees, those employees will quit.

Originally posted by lordtyp0
The bit about tax credits, sorry that part is funny. Large companies don't pay taxes as is. Many of them get checks in the forms of subsidies. Possibly the most notorious form of that behavior is in the American Steel industry.
Instead of forcing innovation to compete: they get subsidies resulting in a more expensive production of goods, which results in more subsidies and tax breaks to keep going. Course: The Steel industry was and perhaps is a matter of national pride.
As for not being forced to make anything ourselves. That part is just dangerous. How long before we lose the skills in our workforce to produce our own things?

If you have not watched Mike Rowe talk about jobs: I really encourage you to spend the 20 mins to do so, it is well worth it.

So you're saying reducing taxes on domestic producers doesn't make any difference because producers don't pay any taxes anyways?

That's your argument?

Subsidies are not free market.

Originally posted by lordtyp0
I was not limiting it to the banking system. I was meaning the corporate business structure. Make no mistake: Banking is just a business. An influential and powerful business, but it is what it is.

Our system of Banking is a centralized command and control system of debt enslavement operated by fiat decree and enforced with the point of a gun.

It is certainly not a free market business. I will give you that it's a business, like running a prison is a business.





[edit on 29-12-2009 by mnemeth1]

[edit on 29-12-2009 by mnemeth1]

The Interstate Commerce Act of 1887
Sherman Antitrust Act of 1890
Clayton Antitrust Act and the Federal Trade Commission Act of 1914
Robinson-Patman Act of 1936
Celler-Kefauver Act of 1959.

Point is - communism was not in practice when the first of the cartel busting took place

The Bolsheviks took control in 1917- the BEGINNING of Communism in practice

Communism does create cost fixing

As does Un-fettered Capitalism, hence the FED actions mentioned above

Both are extreme

Both create control



*edit to simplify



[edit on 29-12-2009 by Janky Red]

[edit on 29-12-2009 by Janky Red]

[edit on 29-12-2009 by Janky Red]

Originally posted by Janky Red
This thread and its conclusions are especial, troll feeding a troll I guess

OP claim socialism make monopolies,

note the dates of Trust

The Interstate Commerce Act of 1887
Sherman Antitrust Act of 1890
Clayton Antitrust Act and the Federal Trade Commission Act of 1914
Robinson-Patman Act of 1936
Celler-Kefauver Act of 1959.

MARXISM, SOCIALISM, COMMUNISM what ever, did not take a state until what 1917 or so-

Anyhow your entire conclusion is so logic poor it is shocking...

OP the Bourgeoisie propagandist - fight the socialism







[edit on 29-12-2009 by Janky Red]

I'm not sure what point your trying to make, but socialism does create monopolies.

State monopoly control of business is what defines socialism.

This isn't my opinion on the matter.

I was actually arguing that without regulation there is nothing to stop a company from a huge swath of unethical behavior.

yes, actually there is.

Its called a voluntary work force.

If a company engages in horrible treatment of its employees, those employees will quit.

Ha! Thats funny. The workforce is grateful to have a job. Where were the mass quitting when Nestle was selling toxic baby formula to the third world countries? If they are fine with killing babies, kind of leaves a rather large grey area that they are also fine with. Generally part of human nature is "That's someone elses problem, I was just doing my job!"

So you're saying reducing taxes on domestic producers doesn't make any difference because producers don't pay any taxes anyways?

That's your argument?

I am saying they already get those incentives out the rear end. All they do is take the proceeds and ship more jobs overseas. It also has a tendency to impede innovation as government hand outs are a nifty little security blanket. I am actually kind of surprised you advocated that-given past statements.

Our system of Banking is a centralized command and control system of debt enslavement operated by fiat decree and enforced with the point of a gun.

It is certainly not a free market business. I will give you that it's a business, like running a prison is a business.

Agreed. Though the Prison lobby is probably the most frightening one of all. (many many prisons are private contract). They lobby states and federal level to increase penalties of crimes resulting in mandatory sentences and more profit for them at the expense of taxpayers and trivial infractions. To the politician it's awesome: They get more money and get to look 'tough on crime'. Win Win for those scumbags.


[edit on 29-12-2009 by lordtyp0]

Socialism Creates Monopolies, Capitalism Destroys Them

I'm not so sure about that. Competition creates a need for marketing campaigns...and that cost is passed on to the consumer. No competition equals certainty in sales, thus less need to increase price to cover research & development, marketing, for a rainy/greedy day.

Here in Texas, our utilities were once a monopoly; however, the state decided to allow "healthy" competition. Since the removal of the monopoly, our utility prices have gone sky high.

TO ME, what matters most is price point, not competition. From my perspective, competition does nothing but increase costs. If my preference makes me socialist, then brand me socialist. One thing I know for sure is that capitalists are greedy, evil bastards.

Just my 2-cents

[edit on 29-12-2009 by Aggie Man]

Originally posted by lordtyp0


Wal Mart is a perfect example of Free Market Capitalism. They move in, destroy local businesses and the populace is so happy to save a twenty cents on a loaf of bread they don't even see the destruction.

BY "destroy" you mean they provide better goods and/or services at a lower cost. When WalMart establishes themselves in a community and other businesses leave, WalMart does not raise the prices or leave the community. The customers are niether gouged nor deserted. What's the problem?




[edit on 29-12-2009 by RKWWWW]

Originally posted by RKWWWW

Originally posted by lordtyp0


Wal Mart is a perfect example of Free Market Capitalism. They move in, destroy local businesses and the populace is so happy to save a twenty cents on a loaf of bread they don't even see the destruction.

BY "destroy" you mean they provide better goods and/or services at a lower cost. When WalMart establishes themselves in a community and other businesses leave, WalMart does not raise the prices or leave the community. The customer's are niether gouged nor deserted. What's the problem.

[edit on 29-12-2009 by RKWWWW]

Not to mention...Wal*mart is good for the environment. It's a one stop shop. No need to burn endless amounts of gas going around to all the specialty shops to get everything you need. One large footprint (as opposed to many). No "back door" disposal of expired goods, chemicals, etc...

[edit on 29-12-2009 by Aggie Man]

Originally posted by lordtyp0
Ha! Thats funny. The workforce is grateful to have a job. Where were the mass quitting when Nestle was selling toxic baby formula to the third world countries? If they are fine with killing babies, kind of leaves a rather large grey area that they are also fine with. Generally part of human nature is "That's someone elses problem, I was just doing my job!"

If Nestle is out selling toxic baby formula, people will stop buying it.

You don't need regulation to make people stop buying toxic baby formula.

If enough people stop buying Nestle products, Nestle goes out of business.

If people are injured by Nestle products, they can sue and recover damages as well as drive the company out of business through civil suits.

Again, no regulation necessary.

Originally posted by lordtyp0
I am saying they already get those incentives out the rear end. All they do is take the proceeds and ship more jobs overseas. It also has a tendency to impede innovation as government hand outs are a nifty little security blanket. I am actually kind of surprised you advocated that-given past statements.

I would argue certain politically connected organizations get handouts and favored tax breaks, which again, has nothing to do with the free market. In fact that's government interfering in the market. - and directly results in the creation of monopolies. These kinds of actions are precisely how monopolies are formed. If one company gets a tax break while all others do not, they are now in a position to monopolize a market.

A free market plan entails reducing taxes on ALL producers without playing favorites.

Domestic producers, by their very definition, produce domestically.

Originally posted by RKWWWW

Originally posted by lordtyp0


Wal Mart is a perfect example of Free Market Capitalism. They move in, destroy local businesses and the populace is so happy to save a twenty cents on a loaf of bread they don't even see the destruction.

BY "destroy" you mean they provide better goods and/or services at a lower cost. When WalMart establishes themselves in a community and other businesses leave, WalMart does not raise the prices or leave the community. The customers are niether gouged nor deserted. What's the problem?




[edit on 29-12-2009 by RKWWWW]

*facepalm*
Did you even make it past the first page before your angsty twitching could not be halted from clicking the 'quote button', with that witty gem no less?

Originally posted by lordtyp0

Originally posted by RKWWWW

Originally posted by lordtyp0


Wal Mart is a perfect example of Free Market Capitalism. They move in, destroy local businesses and the populace is so happy to save a twenty cents on a loaf of bread they don't even see the destruction.

BY "destroy" you mean they provide better goods and/or services at a lower cost. When WalMart establishes themselves in a community and other businesses leave, WalMart does not raise the prices or leave the community. The customers are niether gouged nor deserted. What's the problem?




[edit on 29-12-2009 by RKWWWW]

*facepalm*
Did you even make it past the first page before your angsty twitching could not be halted from clicking the 'quote button', with that witty gem no less?

Yeah I read the entire thread and yours was the weakest post, kind of like your weak reply.

reply to post by mnemeth1


Wow, sorry, this is going down some weird fantasy trip now.
The regulations stopped Nestle from selling it in the U.S. They THEN sold it to third world countries.

It's almost turning into a Poe's Law thing now. I can't tell if you actually believe these things, or are saying them in a devils advocate sort of way.

Businesses will use profits to maximize profits. Period.
Look at Halliburton, they moved corporate headquarters to Dubai to avoid billions is taxes. But they still get tax credits because they have local branches.

Net results: Taxpayers lose billions because the regulations allow for this behavior. Not only do they lose what should be rightfully paid, they lose more on fluff credits (states give huge tax benefits to setup shop in their region etc.).

Make no mistake, if they could make an extra $50 a year by moving production facilities to Nigeria-they would.

Tax breaks are a handout. Anything that gives incentive-is a hand out. Companies are already radically worse than the most egregious welfare abuser. But then, the company can never be punished. Simply fined, because of fine caps this is generally a nuisance and not a punishment. A company holds "Personhood" but is regarded as a demigod compared to a person. Everything in the way the U.S. business market is structured is deeply flawed and inherently corrupt. There is no way a 'free-market' could possibly work in America as by definition it holds that the companies involved be trustworthy and not profit driven.

What is a company that is not profit driven? A charity. Ain't. Gonna. Happen.

What you are describing is something out of Rand and taken to such naive heights as to be a parody on horror.

Originally posted by RKWWWW

Originally posted by lordtyp0

Originally posted by RKWWWW

Originally posted by lordtyp0


Wal Mart is a perfect example of Free Market Capitalism. They move in, destroy local businesses and the populace is so happy to save a twenty cents on a loaf of bread they don't even see the destruction.

BY "destroy" you mean they provide better goods and/or services at a lower cost. When WalMart establishes themselves in a community and other businesses leave, WalMart does not raise the prices or leave the community. The customers are niether gouged nor deserted. What's the problem?




[edit on 29-12-2009 by RKWWWW]

*facepalm*
Did you even make it past the first page before your angsty twitching could not be halted from clicking the 'quote button', with that witty gem no less?

Yeah I read the entire thread and yours was the weakest post, kind of like your weak reply.

Awesome, glad I could help out! I am sure your involvement in this thread will be the highlight of your day.

Cheers.

Originally posted by mnemeth1
I find it interesting that so-called socialists are always complaining that greed and free market capitalism create monopolies that let corporations run our lives, yet never explain exactly how greed and free markets bring this about.

From everything I've studied in economics, the entire purpose of the free market is to depress prices.

The purpose of the free market is to depress prices to the supplier. There is then the assumption that, out of the goodness of their heart, the supplier will lower their sale prices to benefit the consumer. Doesn't actually work out that way.

In a free market, competition always reduces profit margins to zero.

That's an insanely ludicrous argument. Profit is the entire point of capitalism. Competition is the absolute bane of the economic system at hand. Competition can (but doesn't always) reduce profit margins. Therefor competition is bad. In this scenario, whoever started with the biggest bank account can usually either outright buy out the competition, or pull strings to undercut them. Some, such as Wal-Mart, will even temporarily sell their products at a loss in order to drive their more budgeted competition out of the market.

Only through non-competitive laws and regulations can a monopoly come about. Only through the force of government intervening in the market can a monopoly form.

Down is up, war is peace, hate is love. And you called another poster orwellian?

In fact the entire point of a socialist economy is to have the State monopolize everything! How can a monopoly, controlled by the State of all people, reduce prices and increase efficiency? I don't understand this line of thinking. Has there ever been a government agency in human history that produced better and better products while continually striving to improve efficiency and reduce prices?

Because public ownership removes profit motive and is responsible to the public. The first hugely lowers costs, the second encourages efficiency. Imagine if the people in your neighborhood got to vote on who the manager of the local walgreens should be. I'll bet whoever's in the job is going to do their best to keep service high and prices low.

Barriers to market entry are almost always put there by big government. Artificial restrictions on competition are exclusively a function of government.

And there's a good reason for these, as evidenced by every single other nation that has adopted Chicago school economics. A country without market barriers and regulations is like a Spanish Galleon with no cannons - pirates are going to be crawling all over it. Look at Poland. South Africa. Argentina. Sri Lanka. Iraq. Chile. South Korea.

Has there ever been a socialist country that didn't have an elite ruling political/business class controlling the masses?

Yup. Pretty much all of them. Remember, socialism and communism are different systems.

Today we have absolutely massive artificial barriers to entry and state sanctioned monopolies everywhere. They are called patents. If someone comes up with an idea first, they are given exclusive monopoly over that idea for nearly a decade or more depending on what it is. We have massive restrictions on employee benefits, work environments, store locations, zoning restrictions, emissions restrictions, etc.. etc.. etc.. the list of artificial barriers to market entry is nearly endless.

Wait wait. Are you arguing for getting rid of patents... while arguing for capitalism?

I mean the cries to cut wages, lift restrictions on workplace safety, emissions standards, and all those other things that make our workplace better than Somalia's is pretty standard for kookbat capitalists.

But... Patenting is bad? That is an idiotic new low.

We have absolutely epic government contracts given to private manufacturers that prevent competition from forming.

Ideally there is competition for these contracts via bidding. Should i point out that the no-bid contracts were handed out by a neoliberal freemarketeering administration?

We have a legislature that does nothing but pass laws WRITTEN by corporate lobbyists for mega corporations.

And you think this is "against" capitalism how? This is capitalist wet dreams.

We have massive tax burdens and a private central bank artificially suppressing interest rates, hindering savings and the formation of capital. Total top down control of the economy by a private banking cartel with command and control interest rates.

Notice that word, "private"? Yeah. That's as in privately-owned business, as in, not public, as in capitalist and not socialist. Are you following yet?

How can people blame the markets for mess we are in?

Who blames markets? I blame people like yourself who don't actually know what they're talking about, yet insist on having their hairbrained, half-baked ideas that have been proven to never ever work installed as US policy.

The sad irony is that you probably learned this crap in an economics class. Economists tend to know the least about how to work an economy because - get this - the field is monopolized by the Chicago School, because their cockamamie ideas manage to enrich a very small but very influential few.

[edit on 29-12-2009 by TheWalkingFox]

Originally posted by lordtyp0

Originally posted by RKWWWW

Originally posted by lordtyp0

Originally posted by RKWWWW

Originally posted by lordtyp0


Wal Mart is a perfect example of Free Market Capitalism. They move in, destroy local businesses and the populace is so happy to save a twenty cents on a loaf of bread they don't even see the destruction.

BY "destroy" you mean they provide better goods and/or services at a lower cost. When WalMart establishes themselves in a community and other businesses leave, WalMart does not raise the prices or leave the community. The customers are niether gouged nor deserted. What's the problem?




[edit on 29-12-2009 by RKWWWW]

*facepalm*
Did you even make it past the first page before your angsty twitching could not be halted from clicking the 'quote button', with that witty gem no less?

Yeah I read the entire thread and yours was the weakest post, kind of like your weak reply.

Awesome, glad I could help out! I am sure your involvement in this thread will be the highlight of your day.

Cheers.

Can't defend your BS huh?

Originally posted by lordtyp0
reply to post by mnemeth1

 

Wow, sorry, this is going down some weird fantasy trip now.
The regulations stopped Nestle from selling it in the U.S. They THEN sold it to third world countries.

It's almost turning into a Poe's Law thing now. I can't tell if you actually believe these things, or are saying them in a devils advocate sort of way.

Businesses will use profits to maximize profits. Period.
Look at Halliburton, they moved corporate headquarters to Dubai to avoid billions is taxes. But they still get tax credits because they have local branches.

Net results: Taxpayers lose billions because the regulations allow for this behavior. Not only do they lose what should be rightfully paid, they lose more on fluff credits (states give huge tax benefits to setup shop in their region etc.).

Make no mistake, if they could make an extra $50 a year by moving production facilities to Nigeria-they would.

Tax breaks are a handout. Anything that gives incentive-is a hand out. Companies are already radically worse than the most egregious welfare abuser. But then, the company can never be punished. Simply fined, because of fine caps this is generally a nuisance and not a punishment. A company holds "Personhood" but is regarded as a demigod compared to a person. Everything in the way the U.S. business market is structured is deeply flawed and inherently corrupt. There is no way a 'free-market' could possibly work in America as by definition it holds that the companies involved be trustworthy and not profit driven.

What is a company that is not profit driven? A charity. Ain't. Gonna. Happen.

What you are describing is something out of Rand and taken to such naive heights as to be a parody on horror.

If Nestle is out peddling toxic baby formula to other countries, I have to assume exactly the same thing will take place there as it does everywhere else on the planet. People will stop buying it and sue for damages.

You don't need a government regulation to prevent bad baby formula from being sold.

Just like you don't need regulation to prevent a company from adding rat poison to cans of coke. They aren't going to do it because they will put themselves out of business fast.

And you keep blaming corporations for moving jobs overseas, while completely ignoring the fact that our tax rates are high, our regulations are burdensome, and our excessive credit makes domestic production unnecessary.

These things are all due to government, not corporations.

I might also add that our military industrial complex takes up HUGE amounts of resources that could otherwise go to the private sector. All that metal and machinery could be going to produce domestic goods if government wasn't out buying it all up.






[edit on 29-12-2009 by mnemeth1]