[Rainbow Crow]

As I understand it, Libertarians are generally opposed to price fixing. But what is their stance on monopolies? Many of the policies put forward by Libertarians seem to, on their face, support the creation of monopolies, even though monopolies in my mind act as the origin of price fixing situation.

And then there is another issue that I would like to go into. There was this great segment on the Colbert Report where they featured a guy who had invented a device that shuts down a buzz saw when it starts cutting something softer than wood. The guy demonstrated how this could save people from accidentally losing their fingers because the device works amazingly well, even if there is also wood being cut at the same time. He put a sausage on the wood and as soon as the sausage began getting sliced the saw stopped and retracted into the device.

Unfortunately, the buzz saw making companies all got together and argued that they shouldn't have to sell saws with this feature. Normally I would be up for saying, let's allow the free market to sort this out, evolution will favor those who want fingers over those who don't. But because all of the companies got together to kill this invention, no choice to buy the safer buzz saw makes it to the consumer in the first place. This was not even a true monopoly, just a collusion of businesses working together to decrease consumer choices for their mutual profit.

How would a Libertarian prevent monopolies (if they want to) and, if they would care to, how would a Libertarian prevent instances like my above example from occurring, where consumer choice is being limited even in the absence of a true monopoly? Can the free market work if business entities can freely limit consumer's choices?

[Soixante-Retard]

Many of the policies put forward by Libertarians seem to, on their face, support the creation of monopolies...

Can you explain to me why you think greater competition leads to the creation of monopolies?

But because all of the companies got together to kill this invention, no choice to buy the safer buzz saw makes it to the consumer in the first place. This was not even a true monopoly, just a collusion of businesses working together to decrease consumer choices for their mutual profit.

Did they? Are you sure this action was solely the result of companies? Are you sure government and the law didn't have a part to play in this?

How would a Libertarian prevent monopolies (if they want to)

How does the saying go? To catch a thief it takes a thief? To break a businessman send another businessman - don't send a bureacrat!

Can the free market work if business entities can freely limit consumer's choices?

Again are you sure that businesses can freely limit consumer's choices? Are you sure government regulations aren't in play? Regulatory capture?

Adam Smith:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

In short, don't listen to the self-pleading of businessmen to grant regulations for their benefit. Don't invite businessmen to congress.

Milton Friedman on how regulations can serve the businessmen at the expense of the consumer (i.e. regulatory capture):
[youtube]-P9Y4H2GyS4[/youtube]

And Friedman on monopoly:
[youtube]tdLBzfFGFQU[/youtube]

And Stossel on a less esoteric note (listen to Best Buy's CEO's delight at the regulations - it keeps out competition, regulations serve to create monopolies):
[youtube]7bLcja6Qe0I[/youtube]

In short the [L]ibertarian's answer is less government regulation and greater competition, free up the market.

[Rei Murasame]

Don't invite businessmen to congress.

Well, that's very easy for a person to say. How do you 'not invite businessmen to congress/parliament/diet'? Isn't that their second home? Who else is funding political parties and most representatives these days, other than large businesses?

[Rainbow Crow]

So there's no answer to my points besides "get rid of regulations"? The first question was pretty soft-balled guys. Let's say there is an existing and recognized monopoly that is openly controlling prices and other start-ups can't compete for some reason. For example, all existing broadcast frequencies are owned by one company. Do you do anything?

[Soixante-Retard]

How do you 'not invite businessmen to congress/parliament/diet'? Isn't that their second home? Who else is funding political parties and most representatives these days, other than large businesses?

Why do you think businessmen are eager to fund the parties, because the politicians have the power to rig the system in favour of the businessman. It is not that the businessman has any power (he doesn't), it is the politician.

From Russ Roberts. Robert's key point is from 5:15 onwards, but it's worth watching the whole video:

[youtube]JEniEYD59EE[/youtube]



For Blue Puppy,

Let's say there is an existing and recognized monopoly that is openly controlling prices...

Blue Puppy perhaps you missed the point of my first post: government creates monopolies. Solution? Don't grant monopolies. It really is that simple.

[mikema63]

most libertarians, as subscribers to austrian economic theory, believe that monopoly can only exist long term if it produces say water and has control of every possible source.

the understanding is that if coca-cola had a monopoly on all soda's then they would still be competing with all non-soda drinks. it is generally believed that monopoly and cartels cannot exist long term, ill post a couple of links from mises.org for a full taste of the theory if you want to read it.

http://mises.org/daily/5266
^ the myth of natural monopolies (talks mainly about utilities)

http://mises.org/daily/621
^fear of monopoly (talks about why monopoly isn't possible without government)

http://mises.org/daily/5274
^100 years of myths about standard oil (talks about why libertarians dont accept standard oil as a case of monopoly)

http://mises.org/daily/2317
the truth about the "robber barons" (like the standard oil one only about robber barons obviously)

im kind of copying starcraftzzz linking thing but these are all opinion bits that explain the position of libertarians on the subject. libertarians just dont think monopolies and cartels are something that happen on the free market and believe that they require government intervention to actually create.

[grassroots1]

Soixante the Koch brothers DO put a lot of money into promotin libertarian politics, and in general corporations lobby the two main parties because they are the ones who hold actual power. So libertarianism actually is an ideology supported by some of the richest people in society, because they know it works in their interest... in general. People do say that business needs to be regulated by the government, but they also say that corporate money needs to be removed from politics. In other words, our government is not genuinely representative of the people. We need to reclaim our democratic system and remove corporate influence from it... that is the problem of today's America. Libertarianism is, I'm sorry to say, confusion.

[Nunt]

libertarianism actually is an ideology supported by some of the richest people in society.

By a few rich people. Most rich people in fact do no support libertarianism. Naming a few rich libertarians doesn't make your statement true.

[Nunt]

Unfortunately, the buzz saw making companies all got together and argued that they shouldn't have to sell saws with this feature. Normally I would be up for saying, let's allow the free market to sort this out, evolution will favor those who want fingers over those who don't. But because all of the companies got together to kill this invention, no choice to buy the safer buzz saw makes it to the consumer in the first place. This was not even a true monopoly, just a collusion of businesses working together to decrease consumer choices for their mutual profit.

Say the invention is really as great as you say.
Say that the world is libertarian, so you don't need anyone's permission to start a company or need any licences which tend to favor incumbents.
Then all you need to do is go to a bank or an invester, convince him how great your invention is and start producing. Nobody can stop you from producing. So even though incumbents do have an advantage because they are existing brands with loyal costumers, existing distribution channels etc. (incumbents currently also have those advantages, there is no change under libertarianism) your saw seller will still be able to compete because he has a much superior product.

It is also not proven that government stops more monopolies than it creates. There is some regulation that may in some cases prevent monopolies. But there is also much regulation that makes it harder for start ups to compete.

[Rei Murasame]

Sorry for taking so long to get back to this:

Why do you think businessmen are eager to fund the parties, because the politicians have the power to rig the system in favour of the businessman.

I agree with you there.

It is not that the businessman has any power (he doesn't), it is the politician.

And here is where we begin to differ. It's not a matter of 'either-or' it's actually both of them who have the power. Let me explain what I mean, because this was said to me once by a British Co-operative woman, in a way that was so plain that it's really amazing.

She said to me, "How do we know who is going to be the final decision-maker in most cases? Easy, economic power precedes political power."

The state is going to cater to whoever is the most powerful array of interest groups in society. In other words, if businessmen are the most powerful group in society, you will find that the political figures will either be the friends or lawyers of businessmen exclusively, or they will even literally be businessmen.

I also think that's well done as well, that's a good point you make there. But I will use that same comic to illustrate a point later on this post as well.

Presumably you are asking people to find libertarians and vote for them - won't work, because no one is going to fund 200 libertarian candidates enough to get the coverage needed to secure votes (especially since you are promising to also take away all the government programmes that people actually like as well), and the state itself will be resistant to reforms anyway because it is captured already. You are basically saying that votes are useless because the system is corrupt, but if we'd just vote for libertarian candidates, the system would reform itself because libertarian politicians are incorruptible angels who won't sell out to the companies that will supply all their advertising and funding and wining and dining while they are in office, as well as the very utilities and natural resources which the country needs to keep running?

All you've done is maintain the same problem. By slightly altering the second panel's dialogue, your position can be portrayed:


Which is actually not much different from the original problem that the comic describes, is it?

What that cartoon tells me is that the state needs to be taken over by a different interest group with a different source of funding that has different incentives. Asking the system to reform itself merely through voting for a different set of politicians in the same old system, is useless. Libertarian politicians are part of that system too, you know.

[Soixante-Retard]

Rei, you're entire post just proves Frédéric Bastiat's two greatest aphorisms:

"The State is the great fiction through which everyone endeavours to live at the expense of everyone else."

"Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone."

She said to me, "How do we know who is going to be the final decision-maker in most cases? Easy, economic power precedes political power."

But who has the monopoly on force? Who can force you? Who has all the guns? The politicians.

I think two quotes about the businessman vs the politician give a good summary.

"When a government controls both the economic power of individuals and the coercive power of the state ... this violates a fundamental rule of happy living: Never let the people with all the money and the people with all the guns be the same people."
- PJ O'Rourke

"Am I to admire a man who injures me in an awkward and mistaken attempt to protect me, and to despise a man who to earn a good income performs for me some great and lasting service?"
- George Stigler


In short, the politicians ought to ignore the businessmen's pleading. Politicians have all the power. If I could change one thing, it would be that politicians can only serve one term - no re-election. Basically, my complaint is credulous politicians who do listen to businessmen. It's not the businessman's fault; he is acting rational - if I was him I too would want to eliminate competition in my favour - but I can only do that with the help of the law and the legislators - the politicians.

[Imperial Spaghetti]

Libertarian politicians are part of that system too, you know.

I thought libertarian politicians just want to be elected so they can actually eliminate politics all together? I do see the irony though. They need to be in the government to actually get out of it.



I love most arguing premises of libertarians. It's in the solutions where they don't convince me.

[grassroots1]

Nunt... libertarianism is a concept promoted and promulgated by the elite. FreedomWorks is credited with giving the TEA Party form and direction, and who is responsible for their existence? The Koch brothers. Who were the creators and driving force behind the Cato Institute? The Koch brothers. The concept of the rich being "job creators" is mentioned on FOX News and other mainstream sources. The idea of austerity and low taxation is not scary to the elite class, it is the opposite of scary. They would much rather have you calling for the abolition of government than its restoration and subsequent sensible use.

[TropicalK]

It takes far more than the "Koch Brothers" to stereotype a vast group of people. I could just as easily falsely say "all Democrats are women," and present Hillary Clinton and Pelosi as examples.

[Rei Murasame]

But who has the monopoly on force? Who can force you? Who has all the guns? The politicians.

In short, the politicians ought to ignore the businessmen's pleading.

But the problem with your whole outlook seems to be that it is based on an 'ought' for which you haven't supplied any roadmap regarding how that would happen. You say that politicians ought to ignore businessmen rather than banding together with them and lending them the use of weaponry and legal authority.

That is the biggest 'ought' in all of history, an 'ought' which has never manifested. There has never been a time that a politician has not worked for some sort of interest group that provides some sort of material/economic benefit to them. They can't be expected to behave any differently, because politicians have to support the aspirations of themselves and their families somehow, don't they?

Throughout history, even at the very founding moment of a government, government is material interest groups with weapons and an ideology that describes how best to have that interest group run things and maintain hegemony. That's all the state is.

So the giant flaw in the libertarian philosophy as spoken of by regular citizens, is I think that libertarians assume the following three things about libertarian politicians:

• 1. Libertarian politicians are like Daruma or something, and thus:
  
  a. Can exist without any material concerns and are immune to feelings of greed;
  b. Are not a part of government even when they are in it.
  
  
• 2. Libertarian politicians have never been supported by business leaders before.
  
  
• 3. Libertarian politicians have an ability to create a broad-based popular movement that has actual clout.

I think these assumptions are all wrong. I'll address them briefly in three parts.

Part 1.

The problem with the first assumption is plain to see. Politicians cannot live in a vacuum. They can take initiative, but they also happen to exist in the midst of circumstances that are not of their own making, surrounded by people who all have a sort of imprint of the political order that preceded it. Their actions will be coloured by that, more so or less so depending on whether there are any other incentives nudging them in a new direction (there aren't - I'll explain why in 'Part 3'). They are plainly a part of the state, and the state is a vehicle that has a very wide turning radius, it cannot execute ninety-degree turns on outcomes. What this means is that who your friends are in the legislative chamber will matter. When they get in there with only a bunch of business magnates and middle-class people who want their tax burdens decreased, what do you suppose will happen?

Part 2.

The second assumption tells us what will likely happen, since in falsifying the second assumption we can answer the question. Clearly libertarian principles have been in government before. It just worked out in a way that libertarians didn't like, as 'Part 1' may have predicted. When, you ask? Just a while ago:


"The basis of [American] conservatism is a desire for less government interference or less centralized authority or more individual freedom, and this is a pretty general description also of what libertarianism is."

"In recent years there's been a trend toward democracy and market economies. That has lessened the role of government, which is something that business people seem to be in favour of. But the other side of the coin is that someone has to take the government's place, and business to me seems to be the logical entity to do it."


Well. With friends like that as the interest group behind the libertarian thought-shape, I wonder what places they will encourage your libertarian politicians to swing the libertarian axe of government cuts, and what places they will ask them to stay their hand?

That question is most elegantly answered in the example of the UK post-2010, which I will use as the example in 'Part 3'.

Part 3.

Where is the popular movement?

Well, the popular movement seems to be mostly atomised angry lower-middle class people, who cannot form a solid economic phalanx but want to pay less taxes no matter what. Because of this, they are useless, since economic power precedes political power, and no matter how many lawn chairs they arrange on lawns, no matter how many teabags they adorn themselves with, and no matter how many times a news channel points a camera at their antics, they have no leverage over the politicians nor do they have any real leverage over the economic power behind the politicians. Ever seen a lower-middle class libertarian call for a work-stoppage? Ever seen one call for a workplace-takeover? No. So we can rule them out - they are present and vocal, but they are car parked in the garage.

There is no labour movement to speak of in there. This is probably because libertarians disapprove of all the actions that labour actually needs to carry out to defend its interests. It's probably also because libertarians spend a lot of time promising the slash the social services that the working class people need, services they need to use precisely because those social services were originally implemented by the capitalist state to offset the dislocations and chaos in society which are caused by the capitalist system itself (which itself began to be implemented by the state 400yrs ago) as it tore up the old-fashioned forms of social insurance that had existed in ancient times. Working class people are - apparently - not completely stupid, and so they understand that history, and they thus understand that if you cut the social programmes, they will suffer a dramatic cut to their quality of life. They sensibly refuse to join libertarian groups because of that, and because they don't want to be a spare tyre on the aforementioned car in the garage.

Okay, so who really does that leave you with that actually is actually in the libertarian camp and has some clout and will determine what will happen in office? Well:


• Certain particularly large private banks.
  
• Certain high level companies.
• Coercive state apparatus.
• Newly minted politicians who just got elected by the aforementioned lower-middle class guys with teabags.

Predictably, these people call for a 'retreat of the state' because the debts are too damn high, etc, etc, yada, yada. What might that look like? It won't involve liquidating things and nationalising utilities, or nullifying any debts, that's for sure. Let's refer to the UK example to get a glimpse of what the groups with clout would actually try to do:



Public wages, pensions and jobs must be cut. So must services.[...]

The government is right not to cut too much too fast, but that is no excuse not to plan. Some spending, such as that on schools and hospitals, will not vary greatly with GDP. The chancellor should set out plans, based on his forecasts, but also announce contingent fiscal measures he could deploy if growth were to be weak.[...]

Whoever wins this election will oversee the retreat of the state. If this happens without Britons having been given a choice about how it should occur – or even a warning – they will be justifiably enraged, so making the task even harder.


A 'retreat', perhaps a massive and horrifying retreat on the social services front, but not a retreat on the pouring of astronomical sums of tax money into international financial institutions that still own the state and demand payment.

Why? Because the same class of people who would have preponderance over the legislative process in the libertarian government are the same exact class of people who have preponderance over the present government that libertarians are always ironically complaining about today. And so we see, specially planned and rather biased cuts would most likely be carried out on the capitalist state by the libertarians! So we see that even libertarians could potentially do a macabre form of 'central planning' (hah) when they really put their minds to it and are in an environment conducive to it.

The only change really would be the change you are left with in your pocket. If your guys got into power, the ideology would seem to change from "social democracy" to "libertarianism", but it would maintain its form, and its role - the defence and maintenance of the property of large companies led by international finance, and an earnest continuation of the all-out offensive against public services, incomes, living standards and unions - making the national community skirt closer to destruction - in order to short-sightedly boost the profits of financial institutions.

[grassroots1]

It takes far more than the "Koch Brothers" to stereotype a vast group of people. I could just as easily falsely say "all Democrats are women," and present Hillary Clinton and Pelosi as examples.

Did I say that all rich people are libertarians? No, I said libertarianism is an ideology promoted by certain wealthy people LIKE the Koch brothers because it is generally pro-status quo. At most it would reduce social spending, decrease taxes on everyone including the wealthy, and eliminate regulation. All of these things are preferable to today's dominant market players. None of them are threatening to the status quo.

People suggest that government is the only source of "force" but in reality consolidated capital can be an equally vicious tyranny.

[TropicalK]

I said libertarianism is ... generally pro-status quo.

Now I've heard everything. A group almost entirely alienated in politics and called loony and crazy is status quo.

Okay, so who really does that leave you with that actually is actually in the libertarian camp and has some clout and will determine what will happen in office? Well:

Certain particularly large private banks.
Certain high level companies.
Coercive state apparatus.
Newly minted politicians who just got elected by the aforementioned lower-middle class guys with teabags.

None of these are remotely libertarian except perhaps the teaparty folks.
Banks exist via government largess and corruption. Ron Paul for example voted against the repeal of Glass Steagall.
High level corporate officers are likely as libertarian as the general public. I've seen no evidence of more or less.
Coercive state apparatus deserves no comment.

[grassroots1]

Now I've heard everything. A group almost entirely alienated in politics and called loony and crazy is status quo.

In large part it supports the status quo, yes. It is not offensive to the powers that be to suggest that there should be no social services and very little taxation. Any way you look at it that is preferable to the more sensibe and beneficial (the the majority) policy of wealth redistribution and more social services.

[Rei Murasame]

None of these are remotely libertarian except perhaps the teaparty folks.

They don't have to be, I am just saying that those are the people who will be left in the room with you and they will have power. Regardless of whether they actually believe what you believe or want what you want.

Banks exist via government largess and corruption. Ron Paul for example voted against the repeal of Glass Steagall.

Ron Paul was the only one, since I am sure that most libertarians see the repeal of Glass-Steagal as having not had any effect on the crisis.

High level corporate officers are likely as libertarian as the general public. I've seen no evidence of more or less.

But regardless of that, they'll be there because they have economic power and you guys would be in government and they would talk to your people.

Coercive state apparatus deserves no comment.

Coercive state apparatus in this context simply means the power to collect taxes and do other violent things that maintain the basic existence of the state. That's not avoidable and it is that power that those interest groups will be trying to get you to use on their behalf, and there will be no counter-viewpoint to it, since your movement alienates, dis-empowers or ignores the groups of people who have a vested material interest in checking/countering that influence.

[SpaciousBox]

Bringing this topic back to monopoly and away from politics... Could any Libertarians tell me how unregulated competition prevents monopoly? If business exists to make money, and if the state isn't there to save anyone who's business crashes, then the most logical thing to do would be to cooperate and cartel in order to control the system. You would have to be careful mind, too much control and your customers start dying due to lack of food, but just enough and you'll be fine. Without government protection, it would be very easy to use coercion and blackmail tactics to assume control of the means of production, and once you have that you have the lot! If Britain was Libertarian tomorrow, Tesco could just contact all the farms to supply only them for a good wage, and control the entire milk and meat market pretty much overnight. Or hell! why not just merge with Asda, Sainsburys, and Waitrose - they would have so much more buying power then! The Co-op may have good values, but values mean nothing compared to money in a Libertarian world. Any thoughts? This is generally the one question I have never found a Libertarian able to answer, so am looking forward to some interesting points!