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mvassilev
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posted May 19, 2014 01:44 AM |
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artu said:
Mvass, just out of curiosity, in this utopia of yours, do smaller organizations stand together and put an end to all the evil corporations, as you call them?
Do you seriously believe that a completely unregulated market will result in small fish eating the big fish?
Once they stop receiving aid from the state, these "evil corporations" will cease to be so evil - for example, military contractors will have to find something else to do. I don't think that small businesses will take over as the dominant form of organization, but they will be more prevalent than they are now.
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artu
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posted May 19, 2014 01:47 AM |
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But aid wont be the only thing they stop receiving, the restrictions that prevent them from crushing the little business for more profit to themselves will also come to an end.
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JoonasTo
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posted May 19, 2014 01:50 AM |
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Disregarding governmet created and legislated monopolies the first ones that come to mind are Microsoft, Finnish apshaltmarket(which was a target for anti-cartel actions about eight years back) and Finnish dairy market(which has just been the target of some anti-monopoly action in january). There are a lot of government intervention cases against two large companies merging based on monopoly laws too.
Anti-monopoly and anti-cartel regulations are necessary in the current world. I also know the ones in use are not very effective at it.
They're a lot more common in smaller markets, like Finland, than USA(which actually has a lot of laws in place to further creation of monopolies as xerox noted) or China(where monopoly without state is practically impossible).
But coming back to the original topic of the thread, in a limited, forced situation, creating a cartel to raise the prices of water, for example, will benefit all the companies selling the water. Thus it most likely will happen and you will be buying bottled water for 10 dollars a gallon(or whatever will bring the most profit to the seller). No company would benefit from abstaining from the cartel and driving for a real free market. Barring some exceptions here and there cartels would take over. So yes, I think all companies selling the water for 10 dollars a gallon when the people don't have a choice but to buy while perfect market price would be a dollar per gallon is a cause good enough to have laws preventing such a situation enacted.
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but one must not forget how much legislative influence major corporations have. I'd say that's a greater threat to free competition than lack of monopoly regulation.
This a thousand times more. Corporations should have no power whatsoever at the representative organs of the goverment. It should be handled fully on the perspective of what the people need, want, benefit from.
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blizzardboy
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posted May 19, 2014 02:03 AM |
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Price gauging in states of emergency should be prohibited, and said supplies made readily available as is logistically possible. If this causes financial difficulties to companies that produce such supplies (which it will), then a committee can investigate the extent of hardship and then legally negotiate a compensation package. Bottlenecks in supplies for responding to these extraordinary scenarios can cause additional billions of dollars of damage as well as the injury & lose of human life, which would abrogate the regular channels of commerce in ordinary scenarios (where supply & demand is valuable).
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mvassilev
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posted May 19, 2014 02:06 AM |
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artu said:
But aid wont be the only thing they stop receiving, the restrictions that prevent them from crushing the little business for more profit to themselves will also come to an end.
What restrictions are you talking about?JoonasTo said:
in a limited, forced situation, creating a cartel to raise the prices of water, for example, will benefit all the companies selling the water.
However, they have to cooperate to maintain the cartel, and each of them individually has an incentive to undercut the others. Historically, this is exactly what's happened.
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artu
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posted May 19, 2014 02:12 AM |
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The details differ from state to state, obviously, I am talking about restrictions that prevent cartels, market speculation and manipulation to some extent. The borders between legislation and big capital is also very important, as already mentioned.
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mvassilev
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posted May 19, 2014 02:15 AM |
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As far as speculation goes, speculation is unfairly maligned and is actually very beneficial, for reasons explained here:Quote:
Enter the speculator. What will he do? He will try to buy when prices are low and sell when they are high. His initial purchases will, to be sure, raise prices above the low levels that would otherwise obtain in the first period, as his additional speculative demand is now added to the demand to buy widgets for consumption purposes. But his subsequent sales will reduce prices from the high levels that would prevail, apart from his efforts, in the second time interval. This is because speculative sales, when added to other sales, must depress prices further than all other sales would have done by themselves...
But the speculator does far more than merely iron out prices over time. By dampening price oscillations, he accomplishes something of crucial importance: the stockpiling of widgets during the years of plenty, when they are least needed, and the dissipation of the widget inventory during times of shortage, when they are most useful.
Furthermore, the speculator’s actions in the market signal to all other businessmen that an era of short supply is expected in the future. His present purchases raise widget prices, and hence the profitability of producing them now. This encourages others to do so before the lean years strike. The speculator is the Distant Early Warning System of the economy.
But, as in the days of yore when the bearers of ill tidings were put to death for their pains, modern day messengers—the speculators—are blamed for the bad news they bring. There is talk of prohibiting their activities outright, or of taxing their gains at 100 per cent confiscatory rates. Such moves, however, deprive society of the beneficial effects of speculation.
As for cartels, I don't have a position on that.
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artu
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posted May 19, 2014 02:22 AM |
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Quote:
Enter the speculator. What will he do? He will try to buy when prices are low and sell when they are high.
It doesn't work out that way when the speculator is also the big capital that determines when the prices are high or low.
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mvassilev
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posted May 19, 2014 02:25 AM |
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You know, prices are determined by supply and demand, and the supplier only controls half of that.
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artu
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posted May 19, 2014 02:29 AM |
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Edited by artu at 02:53, 19 May 2014.
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Yes, I'd say half of it is not insignificant, wouldn't you? I mean history has shown us business men who dump rice into the ocean while there were people who are starving, only to raise the price of rice up.
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mvassilev
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posted May 19, 2014 02:45 AM |
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I've never heard of that. The only similar thing that comes up from a quick Google search is rotten rice being dumped, but that's quite different.
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artu
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posted May 19, 2014 02:52 AM |
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I've read about it in a reliable source. I could give you the name of the book but it's Turkish. It's from the History of Thought by Orhan Hançerlioglu. Of course, it may be wheat instead of rice, or rye... It's been years since I've read it.
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Fauch
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posted May 19, 2014 02:53 AM |
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Edited by Fauch at 03:05, 19 May 2014.
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Fauch said:
it seems that even the stock exchange was initially meant to protect productors against such unpredictable events, before some people decided to corrupt it for their own profit. now it rips off those people it was initially meant to protect.
seriously, traders aren't blamed for bringing bad news, they are blamed for taking irresponsible risks by gambling with massive sums of money that they don't even own.
it seems that few years ago, a guy called Anthony Ward "Chocolate Finger", most likely in reference to Goldfinger, bought 15% of the world stock of cacao to make prices rise for his own profit.
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Vindicator
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posted May 19, 2014 03:17 AM |
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Yeah, people do that all the time, diamond companies for example buy up diamonds so they control all of the supply (I think it's something like 90%) so they have no competitors. And that is fine in my opinion, it's when there's a public good like food or clothing (especially at a time of a natural disaster) that there should be regulation. Sure, the market will eventually sort itself out, but until then people will die because they can't afford basic necessities.
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Aron
Known Hero
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posted May 19, 2014 12:46 PM |
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Edited by Aron at 13:54, 19 May 2014.
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I don't really care. If the government and the help-organisations and people hadn't come together as well as they actually did in the end then mob rule would have solved the problem anyway and those profiteers would have hanged just like in the French revolution.
But banning it is probably a good idea though I'd like a better system where people in exchange for show ID-cards can take some equipment in exchange for an IOU. At a later date the government pays for the equipment (at labour+procurement cost prices) while the EQ is given to some relief organisation for future use or the person kan keep it and pay those costs themselves.
The profiteering aspect is difficult and thats why an organised system is better where self-regulated rationing becomes the norm at an emergency.
Just keeping prices artificially low would create a black market at an extended crisis. It's better to keep everyone busy doing what they can, including people digging and making sandbags and the shops keeping their supply lines going and keeping their workers and their owners employed.
I'm also not sure if punishments afterwards are necessary or what effect they will have. Maybe if the profiteering was based on speculation and not on actual supply issues but even then...Just enact a ban and forcefully confiscate what is absolutely needed if they refuse.
Mostly though people seem to pull together in situations like this and only faceless multinational corporations and single exceptions here and there refuse to. Which is one more reason to ban the corporate model and only have privately own businesses where the owners are involved and responsible for the activities of the business.
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Aron
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posted May 19, 2014 01:46 PM |
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mvassilev said:
artu said:
Mvass, just out of curiosity, in this utopia of yours, do smaller organizations stand together and put an end to all the evil corporations, as you call them?
Do you seriously believe that a completely unregulated market will result in small fish eating the big fish?
Once they stop receiving aid from the state, these "evil corporations" will cease to be so evil - for example, military contractors will have to find something else to do. I don't think that small businesses will take over as the dominant form of organization, but they will be more prevalent than they are now.
Rofl snowing mao.
Without international treatise and public armies or militias those private contractors will always do when private individuals have private militaries. They will be used.
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Baklava
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posted May 19, 2014 04:06 PM |
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Quote:
prices are determined by supply and demand, and the supplier only controls half of that.
This and other laws of the free market you support make sense given a healthy environment, a prolonged period of time and the awareness of key people (all people, but especially the few key people) of their own best interests in the long run.
When disaster strikes, however, there is no time to speak of. No time for cartels of suppliers to disaster-struck areas to start falling apart or for sole suppliers to understand the error of their ways (even though, one day, after this is over, they'll lose customers or get run out of town, when, if they'd chosen to help, they'd effectively have tremendous self-advertisement for low costs). Due to the necessity of the wares they peddle and the infrastructure collapsing, the demand is sky high and supply extremely low, as people are coerced to do whatever it takes to survive - and the market goes to hell.
What about peddling food for sexual favours? There would be a very large probability of people simply overpowering such a peddler and taking his stuff. In your system of value, in this scenario, he did nothing wrong, and the angry mob did, right? Freedom of association. Supply and demand. Unaccountability for inaction.
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Corribus
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posted May 19, 2014 04:23 PM |
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Besides which, the supplier has a large influence over demand, so it's an oversimplified assertion in any case.
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mvassilev
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posted May 19, 2014 06:22 PM |
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Bak:
It's true that there is less time for cartels to fall apart, but there's less time for cartels to form, too. Besides, the participants know that disaster conditions don't last forever, so they know they have to undersell now in order to get anything out of it.
Nothing wrong with peddling food for sexual favors, either. As TheDeath was fond of saying, you can't be guilty of inaction.
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Baklava
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posted May 19, 2014 06:56 PM |
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There's nothing wrong with peddling food to disaster victims for sexual favours in a libertarian society.
I effing love you, man. Not sure I'd like you in charge after a zombie apocalypse, though. I'd probably go with Elodin there.
Revival time?
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