In the long run, it would be beneficial for all consumers to be able to select from multiple sellers, but in the short term, it's beneficial for each consumer to purchase from the whomever is giving them the best value. That means everyone uses one of the top few banks, one of the top few retailers, one of the top few electronic device manufacturers, etc.
The less concentrated the market, the less regulation required because natural market forces will have larger impacts. Once a corporation reaches a significant size, they largely outgrow the market being able to influence them in a large way, hence the need for more (and stricter) regulation.
Monopolies, if well-regulated, aren't as evil as they seem.
EDIT: I should put my thesis in here: It is easy for regulatory capture to happen in the case of monopoly and regulator. I would also expect the monopoly plus regulator to perform more poorly than either a competitive company or a public entity.
There are a lot of examples where regulatory capture happens to ensure that a near monopoly can comfortably maintain its position, and it strangles competition from startups.
That may explain Google search, but not e.g. Luxotica, which is a monopoly in eye-wear. I'm not sure how much of the centralization is of the "I go to the best provider for me" kind, vs. the "Katamari Damacy" style, but the former is only good for customer in the short term, and the latter not even then.
Free markets and democracies are good at a lot of things, but self preservation is not one of them - that has to be applied from "outside" the system, early and often.
In some countries, said behavior is literally illegal or impractical. Killing small business would be the death of capitalism and freedom.
Capitalism and capitalists would be fine. They would just operate in a non-competitive market. Which is preferred anyway once you have a dominant market position.
Which is to say it is against the will of the people,
However I will defend to the death my right to exchange goods with you. I'm assuming you and I are just normal citizens who don't control multi-billion dollar businesses?
"a wealthy person who uses money to invest in trade and industry for profit in accordance with the principles of capitalism."
As we know there is a huge spectrum of investment strategies, from VCs to Bond holders etc.
Some capitalists like VCs, absolutely value market freedom, others likely don't, but it's too large a swatch of people to generalize by saying they don't care about economic freedom.
This means that 100% stock vehicles are in demand, and Volvo and Saab and BMW benefit heavily compared to a modified Jeep, which would make more sense for Sweden's enthusiasts
In short, economic bullying.
Since the early 80's I've watched Microsoft grow, and don't see it about raw merit at all. It's poker, not chess.
the simplistic retort would be that "value" condenses all that complexity down into a single metric, but we know how well optimizing for one metric works out. we get all kinds of distortions and mis-aligned incentives. we might even name that class of problems "externalities".
the corporate free lunch ain't free. bigness gets paid for by us little people being subjected to thousands of small cuts (decision short-circuiting caused by information assymetries, paying usurious fees on loans, etc.). don't fall for that duplicitous platitude.
Obviously, I'm not talking about infrastructure monopolies as the consumer has little to no choice there between things like mobile/internet/electric/gas/water/sewer/waste removal providers.
your argument is a form of reductio ad absurdum because you're saying your preferred option (buy from large corps) is the only smart and practical choice (so why consider anything else?). but people (like me) choose differently all the time.
with that said, yes, people do take that shortcut (limit choice to large corps) because it's less cognitive load in a world overloaded with moneyed, attention-seeking (self-)promotion, but that certainly doesn't mean it's the best or only choice given the plethora of considerations.
Therefore, customers will be forced to always pay the maximum amount for a good, instead of being able to bargain for a lower price.
As capitalism is based on creating efficiencies of market through customer choice, I have to wonder why mercantilism is back in vogue with a new coat of paint.
There was also a comment here I read recently about Rockefeller being a pretty activist shareholder, in the sense that he arranged meetings--using his considerable clout--among heads of the resulting companies, many of which were his most loyal former employees.
To take that one step further, Agilent then spun off the electronic test equipment portion of the business (which was HP's original market when it was founded) as Keysight to focus on their life science divisions. Each of these decisions was made despite the spun-off division being successful under the greater corporate umbrella.
There are plenty examples of public companies breaking themselves up for this reason. e.g. IAC breaking off Match.com and ANGI Home Services. Service Master breaking off American Home Shield.
I guess it’s some combo of effort/risk? Collect a monopoly rent rather than take greater risk?
Your question is not unknown to economists and there is no clear answer.
Rockefeller rightfully became more wealthy when he owned a large portion of stock in very successful, but highly competitive companies, as opposed to an unchallenged behemoth. It would be like splitting your stake in Walmart into equal shares of Amazon, Target and Dollar Tree.
Also remember his tying: he controlled all the tankers so even if you competed with him in petroleum products he controlled your (literal) path to market.
In comparison to our peers the U.S. is under taxed. The OECD average is 34.2%. What makes the average person feel overtaxed is the combination of federal income tax, state income tax (where it occurs), along with stagnant wages and high medical care costs. The U.S. spends far more per capita on healthcare than any other OECD nation.
It is easy to convince a significant portion of average Americans that taxes are too high. So they vote for politicians that promise to lower taxes. Except they don’t lower taxes for average people. In a properly functioning political system this disconnect between promise and actuality would be taken care of at election time. In my lifetime I’ve not seen this happen and my political memory starts with the Reagan administration.
Due to globalization and the ability of the top 0.1% to easily move money from country to country and to easily move citizenship from country to country one can no longer reasonably make the case that what is good for the top 0.1% is necessarily good for the country. The intersts of the nation as a whole and the interests of the top 0.1% are badly misaligned.
The U.S. is politically unhealthy and until this changes I see no hope for improvement. I think only a shock to the system will really change things.
Its really difficult to compare. Healthcare is a big difference, if we relabeled health insurance as a tax, US tax rates would be very high.
Except for the ~1/3 of Americans who get healthcare through one or more of the government programs (Medicare, Medicaid, VA, Tricare, etc.)
The point is exactly and only what the text of the comment said.
> You believe the totality of all U.S. healthcare spending ought to be viewed as a tax
No, I never said that. Nor, AFAICT, did anyone upthread. The claim rb808 made seems to be more "comparing tax rates between countries where there is a substantial difference in the extent to which essential services are provided through tax funded programs is of limited utility".
As an aside I think if one doesn't view something as a tax then it shouldn't be added to the tax calculation. If one wants to say we are both taxed low and in return don't receive as much government services and so it balances out then have at it. I don't agree with that perspective either but it's a logical one to make.
If you agree with rb808 I wish you well in convincing others with your point of view.
> I think I may have upset you.
It's probably best not to post your guesses about other people's emotions when they don't contribute to the discussion.
> I don't understand your original comment in the context it was made.
Clearly, and you keep trying to interpret it as a defense of (what I have already explained why I consider a misinterpretation of) rb808’s comment, even after I have explained both that I see your interpretation of his comment as wrong, and that my original comment was a tangent that didn't intend to defend his comment (whether as I interpret it or as you do) in the first place.
...if we relabeled health insurance as a tax, US tax rates would be very high...
Your original comment doesn't appear to be relevant or to add to the conversation to me because VA, DOD, Medicare, and Medicaid spending are already taken into account when computing tax rates. I really don't understand what you are getting at with your original comment. The healthcare expenditures you mentioned are already part of the calculation for the tax rate in the U.S. So there is nothing to add with regard to the programs you mentioned when making the comparison to OECD average tax rates.
rb808 does not say it ought to be. He says that the comparison is complicated, and that it would be different if it was added in, not that it should be added in. One could with more justification interpret him as describing a problem and noting the effect of one plausible method of attempting to resolve the problem, rather than claiming that that particular method is necessarily correct.
> Your original comment doesn't appear to be apt to me
That's because you are trying to view it as an argument in defense of the position you've read into rb808's post rather than a tangent responding only to the specific claim in your post that was quoted, from someone who doesn't even agree that the position you've read into rb808's post was likely even rb808's position and who, in any case, wasn't arguing in defense of any position, actual or inferred, posited in rb808's post.
Let’s be honest, tax cuts may be bad policy, but it is not true that they haven’t been lowered for the average person. Rates are down, standard deduction is up.
It really depends on where you live. Some blue areas have had effective tax increases for a sizable chunk of the population.
Are those countries broken too?
Here's what I think:
- No corporate taxes
- No income tax deductions
- No income tax exemptions
- Lower income tax rates across the board
- Income tax rate is calculated by a continuous function based on your income
- Such a function would be based on existing effective tax rates
Done correctly, such a reform would be much simpler, easier to deal with, and revenue neutral.
Why is this a good thing? It seems that most people feel that the problem is twofold. 1- Middle and Lower class families feel like too much of their money is forced to pay for taxes or services that taxes could be used to provide and thus they're not getting a fair shake. 2- Rich people are able to navigate the complex legal codes relating to tax in such a way that they benefit by "not paying their fair share". This seems to be a growing sentiment in both wings (although conservatives tend to believe that everyone is taxed too heavily and have all sorts of varied solutions about how best to deal with wealth inequity)
If you created a revenue neutral system it doesn't seem like it really addresses the issue of wealth inequality. If someone believes the wealthy aren't paying their fair share, it would make sense that in a reformed system that's "better" you would increase revenue because you'd be gaining more from those at the top.
A simpler system benefits everyone: it's easier to comply with, it's easier to enforce, it's easier to change.
For instance, adding a negative income tax would be as easy as adding a negative offset to the function.
Clearly market concentration has been going DOWN worldwide since 1988. It's important to get your basics correct.
Named after economists Orris C. Herfindahl and Albert O. Hirschman, it is an economic concept widely applied in competition law, antitrust and also technology management.
The article thoroughly discussed competition and antitrust.
I have not missed the mark on the subject.
So yes, this measure of market concentration has been going down worldwide as globalization increased partnerships between countries, but in this case the HHI index you're referring to isn't measuring microeconomic domestic competition, it's talking about international competition on a macro scale, treating countries as the inputs.
Which hey, machine learning might make this work.