The logic there is astounding. The government broke up AT&T into a bunch of little companies. These companies then merged their way back into a handful of large corporations and are still trying to merge even more. Did the government force them to join up together? Of course not. The government is actively discouraging a lot of these mergers, i.e. the government is forcing there to be a more competitive marketplace.
The government broke up AT&T into a bunch of little companies
After establishing it as a federal monopoly in 1934. (And in TFA, we're talking British Telecom.)
Similarly, there are a lot of municipal agreements in the US where one company gets the exclusive right to handle local phone or cable service within a city or region. More companies or smaller companies doesn't mean any benefit for consumers when they still just end up choosing between "the phone company" and "the cable company" as designated by law.
> After establishing it as a federal monopoly in 1934. (And in TFA, we're talking even worse entities.)
In order to regulate it (putting it under jurisdiction of the FCC) as Bell was already a natural monopoly by this point, even after the Kingsbury Commitment.
At the top of this thread, ojbyrne says we need to have government regulation in order to create competition.
Here you say that we needed regulation to make AT&T a de jure national monopoly so that we could further regulate AT&T.
So, regulation grants monopolies, then regulates those monopolies, then also regulates more competition into the monopoly market it had previously granted? This is good governance?
Regulation did not create AT&T's monopoly. AT&T did that, the government later sanctioned it in order to try and better regulate the monopolistic company (it failed).
Likewise, in many European countries, telecoms were originally national monopolies. Both in Europe and in the United States those national monopolies were either broken up or subjected to more competition.
VMG is quite correct to point out that telecoms gained monopoly status due to government action.
There are two differences (though I don't think they're very important):
* In Europe, it was generally an artificial monopoly through a state company, Ma Bell was a natural monopoly sanctioned by the federal government.
* Where Ma Bell was broken up following an antitrust case, most european monopolies were simply privatized along with new regulations (or deregulations depending on the market) forcing them to open up their market (instead of turtling)
That doesn't really explain the difference though. The one Dutch telephone company used to be state owned. Now we have multiple competing telephone/tv/internet companies.
The government doesn't have to create these monopolies. Utility (i.e. telecom) companies naturally tend towards a monopoly because of the absurdly high cost of rolling out duplicate infrastructure. Usually the first mover is able to fend off any real competition by lowering its prices below that which its competitors can afford, given that they still have an infrastructure to build.
And even if the first mover does not end up alone on the market, after some time the market tends to undergo significant consolidation (once most of the organic growth has been achieved). And you end up with a natural monopoly anyway.
You can even see that in very recent history: the US government broke up Bell in 7 in 1984, it's already merged back into 2 companies (AT&T and Verizon are composed of 3 baby bells each, the 7th is part of Qwest/CenturyLink)
Correct me if I'm wrong, but the baby bell split was a vertical split. In other words, it left 7 regional monopolies, rather than 7 companies covering the same regions, competing for the same customers.
That means that customers were still stuck with one choice for phone and internet access, but the choice merely varied based on where you went. The Baby Bells weren't competing with each other.
If you are really trying to advance the theory that "the market", left to itself, won't generate monopoly after monopoly, perhaps you could point us to actual examples of those golden times when the absence of regulation served consumers more than they served business oligarchy.
Are you trying to say that unregulated monopolies like US Steel, Standard Oil, the railroads, AT&T, American Tobacco didnt have the best interests of the public in mind? After all Carnegie gave us lots of libraries and without Rockefeller we would not have had the Rockettes.
I can't comment on the other three, but Standard Oil was fantastically good for the United States and the world. I'd really recommend the biography "Titan" by Ron Chernow about John Rockefeller's life.
Tons of advances in efficiency, chemistry, operations, logistics. Oil prices fell dramatically, consistency and quality went up, supply went up through all of Standard's monopoly years. Breaking it up was far more about political factional conflict than it was about problems for consumers.
(Preemptively: Before anyone decides to jump on it, Rockefeller's rebate deal with the railroad wasn't above board. But Standard Oil was a huge net gain for the world. Absurdly so, actually.)
Properly speaking, the concept "monopoly" properly pertains only to situations where the government enforces the monopoly. This is the original meaning of the word (before it was altered in the 19th and 20th centuries).
There is no proper political right for a "consumer" to have a choice between multiple brands of a product. If there were such a right, it would be violated the moment they walked into a remote store that didn't happen to carry every single product currently sold on the market. Remember, rights are contextually absolute. Their purpose is to subjugate society to moral law. And the purpose of moral law is to make individual flourishing possible.
Properly speaking, the concept "monopoly" properly pertains only to situations where the government enforces the monopoly. This is the original meaning of the word (before it was altered in the 19th and 20th centuries).
I'd love to see where you got that idea because it isn't true.
The first use of the word was by Aristotle, where he describes Thales of Miletus' (who was a private citizen) cornering of the market in olive presses as a monopoly[1]
It's true that later there were some government sanctioned monopolies, but it is a mischaracterization to say that the word's meaning has ever changed. It was well understood then that there were monopolies that weren't sanctioned by the government (eg, the guild system in Europe).
weren't sanctioned by the government (eg, the guild system in Europe).
No, this proves my point exactly. See http://en.wikipedia.org/wiki/Guild. Here's the fourth sentence: "They often depended on grants of letters patent by a monarch or other authority to enforce the flow of trade to their self-employed members, and to retain ownership of tools and the supply of materials."
Your definitions do not address the point of the comment to which you're replying.
To restate, the point is that many markets tend to wind up as monopolies or cartels. This turns out to be bad for the people making up society, and they (we) will not put up with it, so we pass laws against it.
This is why we have and use the words "monopoly" and "cartel". And other terms like "price fixing", "bid rigging", "market failure", etc.
> This is the original meaning of the word (before it was altered in the 19th and 20th centuries).
Considering the origins of the word (monopōlion, from monos "single" and pōlein "sell."), that does not feel correct.
While there were a number of de-jure monopolies (English and Dutch East India companies in the 17th century for instance) the origin of the word comes from a natural monopoly (of olive presses).
You lost me with that post there, Max. The opposite of "there is an absolute right to have choice" is not "you must not do anything to promote choice".
Besides, rights are not contextually absolute, as exercising them may conflict with the rights of others.
