WTF are you talking about? There is no price regulation on cell phones or ebooks… What distinguishment are you making that says that “public sewage and streelights” are natural monopolies? Or are somehow justified? You are trying to justify one monopoly be denigrating a different (pseudo) monopoly; ironically they are both energy companies… (Duke vs. SO) The fundamental lack of choice is still present. The main difference is that Rockefeller, at least initially, did not have State sanctioned monopolistic privilege, Duke does. (you know those harmless and everso justified ‘streelights’.)
He wasn’t, but the precedent that was set their effected everyone. It meant that States could no longer regulate their corporate charters. That is why the Federal government became so involved. Sherman Anti-trust is a myth. They never made Rockefeller sell any of the companies that came out of Standard Oil. It went from one company owned by Rockefeller to five compaines owned by Rockefeller. Basically, it did nothing to alleviate the problems that you see with it, yet here you are, trying to say that it “solved” the problem… Your argument lacks potency because it lacks understanding of more than just the concepts that make your point, your point.
It’s a matter of whether or not they tend to become monopolies in practice. In a situation where scale economies prevent competition, there has to be some kind of price control preventing monopoly economic profit.
The Sherman Act in itself was just a legal foundation, but it wasn’t until the Supreme Court broke Standard Oil up in 1911 that the monopoly ended.
This, and that paper, are grasping at sraws. They are defining natural monopolies so arbitrarily that any first comer to any market would be a natural monopolist, then applying the ‘theory’ to any endeavour that requires large initial capital investments. Is banking an appropriate natural monopoly? States and the Federal Government purposely set that barrier to entry large enough to sink any possible competition.
The same is said for energy and water, what is given state monopoly is done so that competition is not an option. How can you not recognize that the State of today has given Duke the privilege that Rockefeller sought. The economy of scale is the region. You are a troll.
Again, here you are ignoring the point that Standard Oil was only broken up in name. Rockefeller still owned and operated all of them. Literally, nothing changed, except for internal administration. AAANNNnndddd Sherman did nothing. It didn’t stop Rockefeller from coming in and swallowing all of the bnaking competition twenty years later. Remind me, why is it that corporations can own stock in each other? Anti-truuu what? You are a troll?
So, without them getting started the point about GDP growth is obvious? You don’t need regression models to tell you that spending money will grow the GDP and/or GNP the way they are defined.
Austrians care about legitimate sustainable growth, not speed, party politics, or aesthetics.
Your purpose in this thread is to come here and say, “Look you idiots, there’s proof that government works!”
In the example you gave, initial capital costs would not be the only factor. Scale economies are important also. As for banking, I am pretty sure that there are more than one or two banks currently in competition with each other. The same can’t be said of either pre- or post-regulatory infrastructure monopolies.
The only problem with Sherman is that it didn’t do enough. It was still necessary for the Supreme Court to dissolve the monopoly in 1911.
But if the market can’t allocate “enough” investment to infrastructure, why do you think the government can? In other words, how do you think the government can out-perform the market?
I searched for “capital cost” and “externalit” in that paper, to catch both singular and plural forms. There were only a couple results each, none of which had a clear surrounding context of the type you suggest.
So I’ll ask you again: “High” compared to what? And by whose standard? “Externalities” according to whom?
It doesn’t directly present an economic analysis, as it is a review paper, but it does discuss studies that have. Page 4:
The literature on the effects of public investments in infrastructures on economic performance was
brought to the limelight by the work of Aschauer (1989a, 1989b). Using a production function approach relating
output employment and private capital as well as public capital, the elasticity of output with respect to public
capital is estimated to be between 0.34 and 0.39. These estimates were interpreted as implying an annual
marginal productivity of public capital of about 70 cents on the dollar and that public capital would pay for
itself close to three times in the form of additional tax revenues [see Reich (1991)]. Aschauer’s work led to an
explosion in this literature. Subsequent analysis applying the same methodology to international, regional and
sector-specific data, however, failed to replicate such large effects and, indeed, it often even failed to find
meaningful positive effects. In addition, the approach used in Aschauer’s work and most of the earlier literature
was challenged on econometric grounds. It was observed, for example, that OLS estimation of static, singleequation
production functions suffer from simultaneity bias and that even if this bias is corrected conclusions
about causality still cannot be drawn. These concerns generated a body of literature that branched out into a
multivariate static cost-function approach and ultimately into a dynamic multivariate vector autoregressive
(VAR) setting considering private sector employment, investment and output in addition to public capital.
What’s my definition of “solvent”? The ability to pay for infrastructure that private sources cannot.
In other words, it doesn’t directly present empirical modeling or data that supports your assertion about the market failing to allocate investment to infrastructure due to “high” capital costs and failure to “account” for “externalities”. At best, it references other studies that do.
Nowhere in that passage do I see anything that supports your assertion about the market failing to allocate investment to infrastructure due to “high” capital costs and failure to “account” for “externalities”.
By that definition, things like fiat money and eminent domain are no issue at all. Why is the government allowed to “pay” for things in ways that the market isn’t allowed?