Interesting. With enough optimisation of the mechanisms of modern capitalism we arrive at a state where a single amorphous entity owns the economy so there are no incentives created by competition.
Isn't the whole capitalism based on promising people monopoly but not letting them actually get it? I.e. no profit-seeking entrepreneur in their right mind would act to create competition for themselves. Competition means waste of time and resources, so there's no surprise every player tries to figure a way how to reduce it, aiming for bigger and bigger pieces of the whole pie in the process. The state you described seems like a part of the natural evolution of market incentives.
> Isn't the whole capitalism based on promising people monopoly but not letting them actually get it?
No. Modern mixed economies, which have replaced capitalism as the dominant system of the developed world since capitalism was described in the 19th Century, are based on incorporating the features of capitalism that tend toward monopoly, but incorporating other features to impair the development of some monopolies and restrict the adverse impacts of other monopolies.
Capitalism itself does nothing to control monopolies.
As long as the ability to create competition is preserved natural monopolies aren't really sustainable except in controlled markets with limited resources (utilities, airwaves, cable, roads, etc).
As much influence as Google has on internet searches, they could relatively easily be displaced by something better and worth moving to, for example. I've tried DDG, Bing and others, and their products aren't really better, so Google it is. When there are actual consumer costs involved, this becomes a bit more flexible...
As an example, unlike "Demolition Man" I can't really conceive of any chain/restaurant actually controlling all of them, so long as allowing for competition is ensured... However, given ever increasing interpretations of IP protection, I could see the likes of ConAgra actually becoming a controlling factor in all restaurants, more than it already is. This is a case where protectionism is counter to a free market though. IP protections are supposed to be "limited" but are increasingly less so, which makes things worse for society.
Nobody really wants true anarchy, but we've been headed towards so many constraints, that I wouldn't call what we have in corporatism anything resembling free market capitalism, even with natural monopolies.
If you define capitalism as "property laws allowing ownership of capital" and further define it as "laissez-faire" meaning that the state does not use its power to promote or restrict particular firms or outcomes, then at the very least you will get the promotion of competition between industries, plus eventual limits to what a firm can do.
For example, if a monopoly in airlines leads to prohibitively expensive plane tickets, then competition from bus lines will serve as a control, and the monopoly for "all transportation types" will be reduced. Unless of course you have the airlines buying out the bus lines. But even in that case, there is a limit to how much they can charge because a new firm can enter and make a new capital investment in that industry. So at most, the monopolist can charge whatever rate would make it prohibitively expensive to enter that industry.
I can see several strategies you could use under conditions you described to maintain your monopoly if you're already big. You could, for instance, immediately buy out any serious competition before it becomes dangerous. Or, since you're a big player with deep coffers, upon seeing an upstart you could start operating at a loss an just wait until your competitor runs out of capital, and then bring the prices back up. Defeating you would require a lot of people coordinating to hit you at the same time, and we all know that people suck at coordination (and if somehow they managed to orchestrate such an operation, it wouldn't take much to bribe a participant and turn him into a defector in order to derail the whole group).
Or you could just hire a hitman. There's no concept of "fair play" in the "physical order of nature".
No, not always possible, but it is very much so the rule, rather than the exception. The many wonders of the modern world are, by and large, the result of capitalist forces.
Article thesis is that funds go around that limit. Not even on purpose, just by their definition. No single company has monopoly but index funds collectively own all of them.
The article also explains that this is only true when a few large players control the market. E.g. an index that includes all of the major pharmaceutical companies. Indexes generally don't invest in startups taking on the incumbents, so there's an opportunity there as long as competition is realistic / the existing players are not too entrenched.
Yes, exactly. The former are incredibly rare, and the latter are common as muck.
For all the pearl-clutching that goes on about monopolies, you'd think people would twig onto the risks in letting the size of the government grow to such a point where granting favoured friends monopolies is not only possible, but simple to do.
Actual monopolies in real fields are very rare and very fleeting due to competition in the same product lines or substitutes. A monopoly is very difficult to hold without the use of force, and governments are the only legalised users of force.
It is usually a waste of resources to try and break up what are seen as 'monopolies'.
That is true if you limit yourself to preserving some political structure. It is not true if you consider revolutions and radical changes to be politically legitimate. There is no ideology or system you can encode in prescriptive rules that endures forever. Capitalism(s) has had a long run, but so did feudalism(s). I pluralize because those systems have changed. What happened to feudalism in the end was that its fundamental tenets were overthrown. What remained could not be called feudalism. It remains to be seen if and how that occurs with capitalism. What can be discarded to make the incumbent institutions endure? How long will that last?
I have only seen recent studies finding that campaign spending has little impact on electoral outcomes; if you have evidence that elections can be bought, please provide it, so that I may be enlightened.[1]
TLDR: authors designed and performed some actual experiments whose outcomes support the thesis that campaign spending works - better for a challenger than for an incumbent.
I don't see any risk of this scenario. I invest heavily in index funds. Generally my focus is on which countries / regions I believe will outperform others. It has provided strong returns without active trading.
