Limits of State Power
POSTED BY: SergeantX
UPDATED: Sunday, December 14, 2025 21:53
VIEWED: 37205
PAGE 30 of 36
Quote:And then? Just to take your thought experiment a little farther, then health care could be anything from stem cell research to snake oil sold from the trunk of a car. I suppose that could be countered by consumers unions... those with extra money get to buy into better health-care knowledge, so the rich have more information about what works and what doesn't. But that still doesn't address the problem that even with a wide variety of TYPES of medical care available, and even with the full cognizance of insurances, certain types of medical care - like major surgery - will be necessarily expensive. There is simply no way around it. And since no family (except the very wealthy) could ever possibly hope to save enough for a true medical emergency, we're back to the concept of health insurance. And under your circumstances, I see no limit to the kinds of abuses that insurance companies currently engage in.
Repeal all legislation that prohibits people from providing health care to others who want it. Period.
I know you really want to create a system of many providers and true competition, but inevitably it devolves into monopolism, whether the government is involved or not, due to economies of scale and other economic (not political) factors).
Quote:yes, we get it. But your point is only partially true.
That's the point I've been making all along.
Quote:Those large wads of cash sticking out of their pocket help too. Consolidation doesn't work unless you are able to BUY the competition. Hence, big businesses gobble up little ones and not the other way around.
If you look closely at how large interest groups ("corporations" in the sense of corporatism) express their power, it's through their manipulation of the political. They use it to curb competition and consolidate
Quote:Sarge, for god's sake study some economics.
and they use it to enhance their own position at the expense of other groups. That's really what modern economicsboils down to - large, focused groups manipulating the economy for advantage.
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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy
Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy
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Quote:
Originally posted by SignyM:
I know you really want to create a system of many providers and true competition, but inevitably it devolves into monopolism, whether the government is involved or not, due to economies of scale and other economic (not political) factors).
I've studied a fair bit of economics, Signy. And what I've found is that this inevitable momentum toward monopoly that you tout as a "fact" of capitalism, isn't. It's Marxist mythology. And the cruel irony is that its used to justify the ultimate monopoly of state socialism.
In a real free market, large companies face a long list if disadvantages from their lumbering size that offset the advantages you focus on. They're slow to react to changing conditions and tend to eat themselves up from the inside out with waste and inefficiencies. They become deeply invested in the status quo and squelch free-thinking innovation in their ranks. These disadvantages translate into opportunities for smaller, focused companies.
The thing is, whether you believe corporations have orchestrated it or not, we've created a legal framework that negates those opportunities and overwhelmingly favors the corporate behemoths. This isn't an ideological fantasy, it's daily reality. We're currently inundated with examples of large, corporate interests that have pushed this imbalance to the point where they're imploding on themselves. In a free market, they'd have been gone long ago.
SergeantX
"It's cold and it's a broken hallelujah"
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"These disadvantages translate into opportunities for smaller, focused companies."
Which then get bought out by the larger ones - Ben & Jerry's\ Unilever; Apple\ Microsoft. Because that is what the smaller companies are after - to MAKE THE MOST MONEY POSSIBLE. And if that means being significant enough to be bought out by the larger company, well then, that's the way to go. Anything ELSE is NOT capitalism. It's pride, or being a contrarian, or feeling responsible to your employees ...
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Silence is consent.
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Quote:Bull puckies. Large companies have efficiencies of scale. To give you an example, an enviromental organization did a study on which food had the largest carbon footprint: locally grown organic; medium-sized commercially farmed shipped within the USA; or foreign-grown, shipped out-of season from the southern hemisphere. And the answer is....
In a real free market, large companies face a long list if disadvantages from their lumbering size that offset the advantages you focus on. They're slow to react to changing conditions and tend to eat themselves up from the inside out with waste and inefficiencies. They become deeply invested in the status quo and squelch free-thinking innovation in their ranks. These disadvantages translate into opportunities for smaller, focused companies.
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Foreign-grown. The carbon footprint is dominated by transportation costs, and cargo ships are more efficient than trains/ semis, which are in turn more efficient than smaller trucks. Bulk shipping is a significant advantage.
A somewhat similar economy of scale is a better division of labor. Adam Smith said it best: a man shifting from one task to another is less efficient than a person given a single task. So a large insurance company, for example, can have ONE person looking at contracts, another one doing the billing, a third bird-dogging lapsed payments, a fourth looking at utilization of care, a fifth looking at outcomes studies, a sixth doing the accounts etc.
Another advantage is that large companies can bring a huge economic weight to bear against smaller ones. Walmart can pick off markets one by one because it costs them next to nothing (compared to their revenues) to starve out a mom-and-pop shop. Hence Intel v AMD, Microsoft v Borland, Walmart v any retailer, etc.
And that's assuming that the company doesn't form a vertical monopoly, tying together the raw products, manufacuring, shipping and retail all into one big bundle. Or a horizontal monopoly; geographically dominating a single sector.
Another significant advantage is that large companies can afford to automate more. Large companies also have the whip-hand in driving down wages. Finally, large companies do have an investment in the status quo. That's because their equipment and technology, which was once new and expensive, has been paid off and is sheer profit. That's why large companies buy up small innovative ones and kill them off if they represent a significant competitive threat.
Face it, Sarge, large companies produce goods FAR more cheaply than small ones. Even Frem knows this! And in a system which is based SOLEY on economics, large companies will almost always win.
Small companies have only one advantage as far as I can tell: In the realm of venture capital they are the best poised to make use of EMERGING technologies. But technologies don't usually emerge quickly enough to sustain a constant bubbling up of new businesses, and the aim of these small companies - like the aim of ANY company- is to become the dominant player and squeeze out the competition.
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The one thing capitalists hate most is competition.
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Quote:
Originally posted by rue:
"currency was (n)ever created at any point"
Currency wasn't created - it takes a mint or a printing press to do that !- but (currency denominated) wealth was.
Wasn't the issue. The Issue was whether capitol came to exist from the ether. "wealth" is a different subject, though in a bubble wealth isn't created, since a bubble is the process of an asset value exceeding an intrinsic value, and the bubble bursting is merely resetting that position. Wealth isn't created in a bubble, it's a temporary aberration, that makes wealth appear to be created, then vanish again.
Quote:
If my house goes from 100,000 to 500,000 (for illustration purposes only !) and someone goes to the bank and gets a loan to buy it - where does that 500,000 come from ? Remember, banks aren't required to have all the value of the loans that they write on-hand, or to even show that they are guaranteed that money in the future.
Must I explain it again? Leverage isn't where a bank invents money, it's where a bank borrows it from elsewhere in order to loan it on. Banks don't have to have all their own money, or asset values, to back the loans they're writing, but they HAVE to have real money to hand out. The $500,000 comes from loans the bank has taken out, and savings held for other customers.
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Signy,
Sure, small companies have precious little advantage left in the current climate. That was the point I was trying to make. We've created barriers to entry to protect vested players and we routinely pass legislation that beefs up/and or bails out entrenched corporations in the name of "promoting economic growth" or averting trumped up economic disaster (read the daily headlines if there's any doubt).
Look at the current situation with the auto manufacturers. By all rights they should be going out of business, opening up opportunities for smaller companies. Even with decades of government support - both in the form of bailouts and competition killing regulation - their size and complacency has become a detriment as they collapse under their own weight. But through the same kinds of scare tactics used to sell us the police-state/military adventures of the Bush administration, we're bamboozled into government intervention that perpetuates the dinosaurs.
Honestly though, if government intervention was constrained to breaking up the monopolies you believe to be inevitable, I'd have no complaints. But the vast bulk of state policy does exactly the opposite. It stifles competition, punishes innovation, and works to maintain the status quo. The amount of effort spent combating monopolies is minuscule in comparison.
SergeantX
"It's cold and it's a broken hallelujah"
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Quote:Sarge, small companies have a hard time in ANY climate. Just look through history. The trend has always been towards larger and larger production units.
Sure, small companies have precious little advantage left in the current climate
I'm not claiming that government regulation doesn't have a hand in assisting large corporations. But you OTOH seem to be totally blind to the fact that economic factors play heavily in the formation of monopolies. The end result of unconscious economic forces: economies of scale, the big eating the smaller and less profitable, combined with the conscious desire to GET RID OF THE COMPETITION - virtually ensures that with or WITHOUT government assistance, the trend is from small to larger to monopoly.
If you truly had studied economics you would know this, and your blind faith in competition is puzzling.
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The one thing capitalists hate more than anythign is competition.
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http://carolynbaker.net/site/content/view/95/
"Banks create money, not from their own earnings or from the funds deposited by customers, but from the borrowers' promises to repay loans. Most importantly, borrowers not only promise to repay, but to repay with interest, and the bank writes the amount of money of both into the borrower's account."
http://www.discusseconomics.com/banking/where-do-banks-get-their-money/
"Turns out money creation sometimes appears out of thin air. All banks lend based on a reserve ratio of their deposit: they must keep a certain % of each deposit at the bank but can lend out the rest. Of course, the whole system is dependent on a) the bank being responsible with lending, b) everyone not defaulting on their loans. If these two things happen eventually the system collapses which is what we're seeing in the current market."
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Silence is consent.
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Quote:
Originally posted by SignyM:
The end result of unconscious economic forces: economies of scale, the big eating the smaller and less profitable, combined with the conscious desire to GET RID OF THE COMPETITION - virtually ensures that with or WITHOUT government assistance, the trend is from small to larger to monopoly.
If you truly had studied economics you would know this, and your blind faith in competition is puzzling.
Sometimes I think you only read the first paragraph of my posts. I re-iterate:
Quote:
if government intervention was constrained to breaking up the monopolies you believe to be inevitable, I'd have no complaints. But the vast bulk of state policy does exactly the opposite. It stifles competition, punishes innovation, and works to maintain the status quo. The amount of effort spent combating monopolies is minuscule in comparison.
SergeantX
"It's cold and it's a broken hallelujah"
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So if you agree that monopolization is an inherent economic force, and you don't like government control... how do you propose creating and maintaining real competition?
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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy
Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy
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