I’m new to Austrian economics and there has been a question that has been rolling around in my head for a while now. All of us classical liberal thinkers think that gov’t created monopolies are bad. We also agree that most monopolies that exist were created by gov’t intervention. Is it right then for a government to step in and intervene to dismantle a monopoly that flourished due to its own intervention?
Also on a somewhat related note, should the government intervene to save the big three auto-makers? since it intervention by the government… CAFE standards etc… that caused the companies to go under? There is the classic Misean argument that intervention causes more intervention because the gov’t needs to intervene again to avoid the uwanted and unexpected results of its prior meddling. This is all true but, Just playing the devils advocate here but: Should we let the big three go under? because its not really their fault that they did.
What the government should do is simply stop enforcing the monopoly.
Let them fail. It’s not our fault they caved to the unions, overextended themselves by buying out a bunch of European manufacturers, and made crappy cars.
Let’s assume they went under because of government intervention. It makes no sense that everyone in a society should be liable for the damage done to these companies. Only those who by evidence can be proven to have violated the rights of these companies should be held responsible, and while it’s not clear who that is, it sure isn’t the average tax-payer. To put it another way, if a thief steals my money, buys a knife and assaults some poor guy, should I be forced to pick up the hospital bill?
The only way a monopoly can exist in a free market is if that industry is, well… Perfect. If it’s “perfect” there is no threat to consumers.
The “big 3” are failing because their business plan failed. They need to adopt a new business plan (Better yet, the gov’t needs to allow them to develop a better business plan.) or go bankrupt. 'Tis the way of the market.
First, the government has no right to decided who is the rightful owner of property. Even if the monopolist is not the legitimate owner, the state has no authority to decide who is.
Second, State intervention is never a workable solution to the problem of state intervention. The state can not legislaturate a free market into existance, a free market must be free of the state.
Yes. They are going under because they aren’t competitive. It is good that they fail.
what about when one entity uses private property rights to secure exclusive supply of a valued resource? what happens when someone corners the silver market and no cheap alternative is found? this slows economy as anyone who needs silver for a consumer good is forced to pay a premium.
say bill gates decided to buy a controlling interest in all the major silver mines and jack up the price? it doesn’t take any enforcement to keep the monopoly going, new silver mines are rarely discovered.
From what I remember about Hunt’s and silver thursday, is they attempted to corner the market, but eventually failed and the government bailed them out… I’ll research later.
but the point is that the hunt’s were able to cause a steep price run up by buying up all the supply. it would be far easier for someone like bill gates to buy shares in the mines rather than trying to corner the physical silver itself. he could choke off supply and this way as world reserves fell he could slowly jack up prices. once the vast majority of world silver was coming out of his mines he could charge whatever he wanted.
look at the debeers corp. and they aren’t controlling anything important for manufacture.
Actually, the Hunts, it appears, were hedging against inflation and the eastcoast banking establishment. Said establishment didn’t like that, and got the silver trading rules changed to hurt the Hunts.