Chicago School vs Austrian School

[Gelare]

So then the defence of Walmart as an example bad monopoly as an example of the bad effects of deregulation happens to be...

That it isn't Walmart's fault because it's the fault of the deregulation?

Isn't that the whole damn point in the first place? Are you forgetting that or are you making some weird "This is the best of all possible worlds" argument?

I have to be honest with you, I have no idea what you're talking about. Like, I don't doubt that you have a point, I'm just not sure what it is. I will say this: I don't think I disagree with you people as much as you think I do. I am doing a bit of devil's advocacy because some of you seem to be absolutely convinced of your positions and unwilling to even consider others. But really, what do you people want here? If your gripe is that the stuff Walmart's doing stuff that is illegal, you should be blaming the regulators, whose responsibility it is to keep Walmart in line. If your gripe is that they're doing stuff that should be illegal, then you should be blaming the lawmakers, whose job it is to define which things are illegal. And if your gripe is that Walmart's doing stuff that is legal and should be legal but you still don't like it, well...tough cookies, I guess.

[Username17]

No. The point is that Walmart's activities are borderline illegal. As in, they are activities that are normally illegal that they have been granted special dispensation to do anyway with the last few years of deregulation.

So that by deregulating (that is having the government take a less active role in defining what can and should be done in the economy), the rather well documented depredations of Walmart have become a reality.

Taking the government's hand away to rely on the invisible hand made things more inefficient, not less.

-Username17

[TarkisFlux]

Well, PL's gripe seems to be actually getting back to the original point of the thread and away from monopoly griping. What he wants is to convince you that monopoly's do bad stuff, don't self correct, and it's the policies of the chicago school that cause and support these bad things. By suggesting that it's the fault of our regulators and our laws you are also suggesting that it's the fault of the chicago school policies, which looks weird after your defense of them.

Which is pretty much what he gets at with the last sentence. Unless you're trying to make some "best of all possible worlds" argument that this shittiness is better than the stuff we'd have if we went with a different economic theory, you're acknowledging that the theory is flawed and policy should be corrected.

[Gelare]

What he wants is to convince you that monopoly's do bad stuff, don't self correct, and it's the policies of the chicago school that cause and support these bad things. By suggesting that it's the fault of our regulators and our laws you are also suggesting that it's the fault of the chicago school policies, which looks weird after your defense of them.

Which is pretty much what he gets at with the last sentence. Unless you're trying to make some "best of all possible worlds" argument that this shittiness is better than the stuff we'd have if we went with a different economic theory, you're acknowledging that the theory is flawed and policy should be corrected.

Oh, okay, thanks, that's cleared up then. Yeah, monopolies do bad stuff, and while in the long run they are self-correcting, in the long run, we are all dead, and yeah, some Chicago School policies probably make it easier for them to be around. It is the fault of our regulators and our laws - and, of course, the monopolists - which I don't think you can reasonably blame in a really significant way on Chicago School policies; I think some academics have less influence than, say, professional lobbyists who engage in copious amounts of bribery. And I don't mean to be defending the Chicago School, necessarily - merely giving them a fair shake.

My point was that while monopolies are bad, governments are incompetent (and corrupt), and there is no reason more regulation is necessarily better than less, even though in practice it might well be. Policy should damn right be corrected, but not because some folks pay lip-service to Chicago School economics, but because politicians and bureaucrats are both incompetent and corrupt.

[PhoneLobster]

governments are incompetent (and corrupt), and there is no reason more regulation is necessarily better than less, even though in practice it might well be

Everything about this sentence indicates a poorly thought out self contradictory position and falling hook line and sinker for the blatant falsehoods and platitudes of the "privatise or else bitch!" cronies.

[Gelare]

governments are incompetent (and corrupt), and there is no reason more regulation is necessarily better than less, even though in practice it might well be

Everything about this sentence indicates a poorly thought out self contradictory position and falling hook line and sinker for the blatant falsehoods and platitudes of the "privatise or else bitch!" cronies.

Uh...I can only assume you're being intentionally obtuse so as to continue the argument. I could just as easily accuse your sentence about falling hook line and sinker for the blatant falsehoods and platitudes of the "big government is always the answer!" cronies. But I won't, because you're not making any actual argument, you're name-calling, and I have better things to do. In case I've misrepresented something in that quote you made, I'd say you should read it again with the word "necessarily" (in the logical sense) re-emphasized to discern my actual meaning.

[Username17]

My point was that while monopolies are bad, governments are incompetent (and corrupt), and there is no reason more regulation is necessarily better than less, even though in practice it might well be.

This is the Platonic argument from the Republic in reverse. And it's just as wrong.

Whatever gets done gets done, and the process for deciding those actions makes no difference to the actions themselves. And Plato therefore made the claim that having those actions decided by a dictator would be ideal because it would use the least man hours as you'd skip all the debate. You just made the argument that having the corporations decide what they should be doing is more efficient than having any oversight. And that's wrong. For the same reason that Plato's concept of the philosopher king is wrong.

The fate of anyone not making a decision is essentially an externality to the deciding party. A dictator has no interest in preserving the rights of discourse amongst the Pythagoreans, and a corporation has no interest in preserving avenues of competitive growth. The entire concept of Scientific Progress, Social Progressivism, or even Free Market Economic Growth hinges on a model of competitive replacement. Of destroying the status quo again and again, only to replace it with things that are considered better under whatever criteria are in use at the time.

Anything in power represents the status quo by definition. If you give it the power to prevent competing ideas from disseminating themselves, you prevent things from progressing. Definitionally. It doesn't matter how good a leader your proposed dictator is by today's standards, and it doesn't matter how efficient a corporation is in today's market. In the long run, you could do better. And if you let those guys police their own markets, you never will.

The problem with the Soviet Union was not that there was total government regulation on just about everything. The nation had some of the largest real growth of any country ever. The problem was that with the Mensheviks pushed out the single party system found it extremely difficult to adapt or to entertain new concepts. Progress went very quickly when the Bolsheviks were doing their thing, but the place stagnated afterwards because of a lack of fresh ideas.

Process matters. A process that doesn't entertain ideas from the outside will fall behind one that does, even if it is running very well "right now." Government oversight of corporations is better than corporations looking over themselves, just as having a regular democratic transfer of power is better than letting some dude be dictator for life. Not because every decision is better or you see any particular advantage on any particular decision necessarily - but because Progress is real, and Progress is Good.

-Username17

[Gelare]

You just made the argument that having the corporations decide what they should be doing is more efficient than having any oversight.

To be fair, I made the argument that having the corporations decide what they should be doing might be more efficient than certain kinds of oversight. I feel like somewhere along the line, someone transformed my argument that "monopolies are, in the long-run, self-regulating" into "anarcho-capitalism FTW!" But whatever, anyway. Your argument presupposes a relatively competent government, because if your argument did not presuppose it, this:

Government oversight of corporations is better than corporations looking over themselves

Would be false. It is possible that government oversight is better. It is likely that government oversight is better. Indeed, standard economic theory assumes that there's some reason, like a minimally competent government, to keep the corporations from consolidating into a mega-monopoly and literally taking over the world. There are precious few countries on Earth whose governments I feel are doing a bad enough job to make their absence the better choice. And if this seems like I'm making a weak claim here: I am! I'm not actually an anarcho-capitalist.

But it's totally conceivable that having a government is worse than not having a government, you just have to have a really crappy government. This is an RPG board, we tend to have good imaginations, I think it's possible. In the real world, Frank, your argument will almost always be right. But almost is not 100% of the time, and governments do have a long history of being incompetent. That's all I'm saying.

[PhoneLobster]

But almost is not 100% of the time, and governments do have a long history of being incompetent. That's all I'm saying.

That is not "all" you are saying you are saying a bunch of apologist things about monopolies, deregulation and privatisation of vital public infrastructure and human rights that add up to a blatant attempt at arguing for Chicago style anarcho-piracy.

Even that particular part of what you are saying is more complex than you imply.

You aren't saying "occasionally a given government may screw up". You are actively arguing that governments have a long history of incompetence, compared to letting the robber barons do whatever the fuck they feel like

In those terms "long history of incompetence" requires some pretty fucking consistent and extreme "incompetence" I mean really government is just well known to be incompetent compared to... letting a guy kill you and take all your stuff?

[Draco_Argentum]

Theoretically the perfect dictator would innovate and progress. The problem with the idea is that the perfect dictator does not exist.

governments are incompetent (and corrupt)

So are corporations. The advantage of democratic governments is that they are in theory beholden to the electorate. In contrast a corporation is beholden to turning a profit.

[Username17]

The thing is Gelare that your claim is so weak that it's not even a meaningful point. Monopolies eventually die because they exist isn't meaningful. There's no information gleaned from that statement. It does not suggest any course of action or opinion on current or future events.

That it is possible for a governments to be worse than no government is not news. But it's also not relevant to a discussion about corporate accountability. Indeed, if you have "no government" and a corporate monopoly, then the corporate monopoly is the government. And chances are quite good that it would be one of those governments you'd be better off without.

---

Monopolies eventually die, in the same way that everything eventually dies, but your claim that they somehow sow the seeds of their destruction is essentially laughable. It is equivalent to saying that a man guarantees his death by being born. While sort of true in an entirely trivial way, it imparts no information about whether this demise is distant or soon, nor whether it is something which should be hastened or postponed.

The things that eventually destroy monopolies are almost inevitably attacks from without. And while you can make a claim that these attacks only happen because the monopoly makes themselves an attractive target - this is very much akin to claiming that women inevitably create opportunities for themselves to be raped by being pretty. It's a model of behavior that is not only very weakly predictive, but also morally insulting.

Corporations and governments ultimately end up competing with and destroying monopolies not because monopolies wore short skirts, but because they also have ideas and attempt to exploit opportunities to turn wealth and power into more wealth and power. Nothing lasts forever, and the House always wins. If you compete often enough you will eventually lose.

-Username17

[tzor]

Walmart selling medicines at a price lower than their competition can buy them from the same suppliers (because of Walmart's pressure) isn't predatory, it's competition?

First of all predatory pricing is designed to drive the competition out of business and then return prices to sustainable levels. In all honestly I don't see that from Wallmart. Their philosophy is lower costs at any cost and I don't see that changing with the presense or in the absence of competition. You will still see the same crappy old products and the attempt to use their retail power to bankrupt the suppliers that feed them.

[Gelare]

So are corporations. The advantage of democratic governments is that they are in theory beholden to the electorate. In contrast a corporation is beholden to turning a profit.

True. That's a fact that holds less and less sway with me as I note the idiocy of the average member of the electorate, and then realize that half of the people are even dumber. The media has a tremendous ability to shape public opinion about political events - but then again, marketing firms (often involving the same people) have a significant ability to tailor a corporate image.

The thing is Gelare that your claim is so weak that it's not even a meaningful point. Monopolies eventually die because they exist isn't meaningful. There's no information gleaned from that statement. It does not suggest any course of action or opinion on current or future events.

That is completely fair. And since I do not promote "anarcho-piracy", PL's cries to the contrary, I don't really have a problem with that; I was never trying to say that monopolies should be unregulated, merely that it was not necessarily the right thing to do in every possible circumstance. If you like, though, I can put forward a slightly stronger point, like this:

Monopolies have a harder time solidifying their power than most people give them credit for. The reason is that they lure competitors into their markets by the excess profits they reap - they sow the seeds of their own destruction, one might say. Depending on the circumstances, this could mean that a monopoly is "self-correcting", in the sense that it will be gone soon enough that government intervention is not necessary to prevent major deadweight loss.

This still isn't suggesting any course of action, except insofar as it suggests that one should be slightly more critical of the idea that government policy should be applied liberally to eliminate monopolies, because if that they are sometimes self-correcting (in a meaningful sense) is true, that means the public can avoid spending their funds on policing the ones who are soon to be competed away, and rather can focus on the really entrenched ones.

[tzor]

The basic argument against monopolies is that if they were so perfect why aren't they around all over the place? The fact that they aren't is proof that they are not in the long term sustainable.

But that, in the end, is a moot point. There are a lot of things that are not sustainable but are clear and definite things we want to avoid. Homocidal despots, killer plagues, and monopolies are things that are self defeating in the end but that doesn't mean it's not better to avoid them all together.