You don’t have to answer. I won’t care either way my friend. [:)]
Anyone interested in this thread would do well to read this paper by Steve Keen:
Actually tha peper seems very complex and I’m not claiming to have understood every last detail, but I noted that it included the followeing sentence in section 2.1:
“In the other extreme of a monopoly, the monopolist
sets price where marginal cost equals not price,
but marginal revenue. A monopoly therefore sells a
smaller output at a higher price than a competitive
market.”
Maybe Steve Keen should give MES a read sometime.
Steve Keen. 'Nuff said.
MES?
Man, Economy and State.
Thanks for the link - I shall read it with interest.
His argument is not against private utilities but against capitalism as a whole. If he were correct then governmental regulation of ipod distribution would render cheaper and more abundant ipods with higher quality. Unfortunately the simple economic calculation debate shatters his paper which is largely based on bad mathametics and opinion.
He also fails to recognize that in general natural monopolies tend not to exist. The only instance where a natural monopoly could arguely exist in a free market is the case where the company consistently produces a higher quality good at a cheaper cost. This is undisputably better for consumers. History has shown us however that such monopolies usually never exist or never last without help from the state.
The only true monopolies that have ever existed and ever truely barred out competition is legal monoplies with powers granted from the state.
I know that mickanomics does not consider my real life example of a private road network as adequate to “prove” that roads can be supplied through a free market, but I nevertheless decided to expouse how such a private road network came into being: In Search of that Mythical Free-Market Road Network. I think that this is just as easily applicable to a residential road network, especially since (as the article infers) those paved roads which were paved by the government originated as private roads when the houses were originally built.
He didn’t even say anything when I cited Disney World. So, I assume that this was all a trawl.
I have already acknowledged that the free market can provide roads, but only under certain restricted conditions and often under circumstances which lead to a very similar set of problems to the ones you associate with government roads (please read thread from start). Disneyworld roads fall in to my “restricted conditions”. Please don’t make me repeat myself.
I hate to sound rude but I actually did read the whole post and missed this point. Would you be so kind as to elaborate what you mean by “restricted conditions”? It’s hard for us to defend our stance if we don’t know where your coming from. Thanks Mick.
One of his fundamental assumptions is that we live in a free market, thus, since there are no private roads of the type he specifies, therefore, the free market fails.
Go through the posts again paying special attention to posts where I use the words “common landlord” or “contract”.
My arguments were built up and tweaked over a series of posts.
Would you be so kind as to summarize this point in a single post for me?
Basically, he defined private roads that pass his inspection in such a way that excludes every way it would and has been done. His next thread will be “Can upside-down furniture evolve in a free market?”
There was a lot of discussion around page 13 of this thread about private companies controlling utilities. This was tried already in the water industry in Britain in the 19th century.
“Up until the mid-nineteenth century, Parliament discouraged municipal involvement in water supply; in 1851, private companies had 60% of the market. Competition amongst the companies in larger industrial towns lowered profit margins, as companies were less able to charge a sufficient price for installation of networks in new areas. In areas with direct competition (with two sets of mains), usually at the edge of companies’ territories, profit margins were lowest of all. Such situations resulted in higher costs and lower efficiency, as two networks, neither used to capacity, were used. With a limited number of households that could afford their services, expansion of networks slowed, and many companies were barely profitable. With a lack of water and sanitation claiming thousands of lives in periodic epidemics, municipalisation proceeded rapidly after 1860, and it was municipalities which were able to raise the finance for investment which private companies in many cases could not. A few well-run private companies which worked together with their local towns and cities (gaining legal monopolies and thereby the financial security to invest as required) did survive, providing around 20% of the population with water even today. The rest of the water industry in England and Wales was reprivatised in the form of 10 regional monopolies in 1989.”
Yeah tried and tested, never again mirite? So much better to have coercive monopolies handle things, as they can finance them! Who needs innovation or alternative ways of doing things, the market simply failed so now forevermore the government shall provide!
Drone.
I am sorry, I wasn’t going to respond until I saw you say this.
Are you American? If so, then you’d know Obama is no different than Bush was. Clinton was no different from Bush Sr. There are no politicians in office who aren’t crooked or hypocrites. Reagan was an utterly failing; when he left office, government power increased by two times or more!
Just how free am I for having voted for Obama over McCain? Or Paul over McCain? No more free than the day I was born into this unjust, unnatural, socially rigid system.
Democracy = You loss this round, better luck next time!
As long as there is a system called the “state”, men will seek to control the lives of their constituents, or be corrupted by the very power they seek.
What we have now is not a Free Market. A Free Market is = separation of state and economy, or no state at all. What we have now is a “mixed economy”. The government has zero incentive to maintain the roads. Hell, maintaining them = they go broke! Hell, Virginia has been trying to cut back spending, (they make no profit!), they just allowed a company to build a 15 mile long private highway, built, planned, and paid for by this private company. I think it’s the “Green Dulles Highway” or something.
I recommend two books for you. Walter Blocks “The Privatization of Roads and Highways” and “The Voluntary City” by the Independent Institute.
Just because you, or I, or anyone else on this thread has the imagination to figure out how a private road would work, doesn’t mean it won’t work. You’re ignoring way too many good arguments or you’re just blinded.
Your post is wrong on all kinds of levels.
A) You can’t say that because a single private business failed or a few failed that capialism has failed. Indeed when a business fails capitalism is suceeding. It is pushing that bad business man out of the market.
B) New entrapaneurs did not ever get a chance to introduce themselves into the market becuase of whatever existing regime at the time and because eventual governental takeover. Economics is one of discovery where the most innovative/creative/person wins in the long run.
All this states is that something or someone (government) prevented these firms from upgrading their existing infrastructure. Something barred their way from allowing their product to become cheaper therebye maintaining their competitiveness. A true private monopoly cannot exist, only ones granted by the government can last through the ages.
C) Perhaps the greatest example of the successes of private water providers can be found in the poorest countries in the world. Most 3rd world countries have their water provided by a private company because their local governances fail so horribly on such a simple task. Even in country’s where fresh water is in insanely abundant government fails at the job and the people naturally subscribe to a water provider.
Even in your own country water has been outsourced to the private. In all rural areas water is privately owned and in city areas drinking water is generally privately owned and delivered. Water through tap is quickly becoming a thing of the past. Shoot, people are now switching to stored rain water to water their lawn over tap.
Your argument that private water has failed only reveals that government is nothing but a creed to you, or religion. See my signature. You are like the Christian arguing to the atheist, or vice versa. All you did was google up some book which was probably written in extreme bias on a singular case and posted it here on the forums. Thats like Microsoft saying personal computers are stupid when the firs one they build fails. It’s an entirely counter productive attitude. You default to the government in haste and find every excuse you can permeate government in all things. Have you actually read up on the history of this specific case? I’ll admit I have not but I have read up enough on modern private water systems to know that they are completely fine and in all counts run more efficiently then government ones. Cheaper to. 
My advise to you, leave the US and live else where, specifically a third world country. You have much to learn.