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TheCorsairMalack
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Post: #1  Posted: Mon May 24, 2010 7:35 pm Post subject: Competition laws. Do they help anything? |
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A competition law is a law that causes businesses to compete rather than team up. They prevent monopolies and cartels. This wikipedia entry is very helpful: http://en.wikipedia.org/wiki/Competition_law
My question is: Do they actually help anything?
A major premise of these laws is that they prevent cartels or monopolies from putting outrageous prices on necessary goods or services.
My friend had an interesting theory. If a cartel took over the water market and raised the price of water so high that people could barely afford it they would earn more for a while. But then people would demand more pay from their employers, minimum wage would go up, and water would become affordable again. Then the cartel would jump their prices up again.
This would continue on indefinitely, prices and earnings constantly and regularly rising. It would be a cartel run inflation.
But cartels are run by smart businessmen. They know that inflation doesn't serve them at all. They would limit their price to something high, but payable. Do you agree?
In summary:
Would removing anti-trust laws start unending and rampant inflation, or would business cartels set prices high but payable? |
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Scott
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| Post: #2 Posted: Mon May 24, 2010 9:38 pm Post subject: |
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In an otherwise truly free market, I do not think they would be necessary. Monopolies wouldn't be a big problem in a truly free market. However, I think other infringements in the freedom of the market cause problems that pro-competition laws help alleviate. In that respect though, they are not effective enough. The problems in the system that enable some people to gain wealth unfairly and cause other people to lose out on wealth unfairly require much more significant band-aid fixes for the time being and massive fundamental changes to the political system need to be made.
It's like a game of a Monopoly where two players have cheated and now through cheating those two players own all of the property. Making the two players that cheated give a few Monopoly dollars to the other poor propertyless players would help reduce the unfairness but not nearly enough. Making the two players who cheated split up their property between themselves in such a way that neither has a monopoly would also be a way to slightly reduce the unfairness but not nearly enough to really fix the problem. In both cases, the players who cheated might call the breaking up of monopolies or the requirement to give some Monopoly money to the other players as unfair, saying the other players need to play by the rules to make money, but that's not the case in the context of cheating having already been used to make those two players rich which is self-perpetuating (i.e. now that they own all the property they don't need to cheat to further get ahead in the game). Those measures are not unfair but are incomplete ways to try to rectify the cheating that has already occurred.
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TheCorsairMalack
Joined: 17 Aug 2009
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| Post: #3 Posted: Tue May 25, 2010 12:10 pm Post subject: |
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Scott said:
| Quote: |
| In an otherwise truly free market, I do not think they would be necessary. Monopolies wouldn't be a big problem in a truly free market. |
What restrictions on the market do you think cause the need for competition laws? What other laws are making it not 'truly free'?
Also, your second paragraph. Is what you're saying that a more perfect law prevents the cheating in the first place rather than tries to repair it after it's done? |
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Scott
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| Post: #4 Posted: Tue May 25, 2010 2:24 pm Post subject: |
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Thanks for your response, TheCorsairMalack!
| TheCorsairMalack wrote: |
Scott said:
| Quote: |
| In an otherwise truly free market, I do not think they would be necessary. Monopolies wouldn't be a big problem in a truly free market. |
What restrictions on the market do you think cause the need for competition laws? What other laws are making it not 'truly free'? |
I think that the market is not free. Accordingly, the people who are rich under the current unfree, unfair system would often not be rich or not be as rich under a less unfree, less unfair system. People who are poor or non-rich would in many cases probably be wealthier in a less unfree, less unfair system. The people who have monopolies and get the advantages from having monopolies would not be the same people having them and getting them in a freer and fairer society.
What are the policies that have infringed on people's economic freedom and thus, in my opinions and usage of the terms, thus made the market unfair and non-meritocratic? Here are some examples:
1) Consider the long history of government-allowed and government-supported racism such as slavery, Jim Crow and prejudice or discrimination by agents and employees of the government in various countries. I believe this is why in any given country people of certain races may tend to be significantly poorer than others and thus why the monopoly owners would tend to be of a certain race of people who have been unfairly advantaged by infringements on freedom.
2) Consider the fact that in countries like the United States the rich pay less in taxes than the average citizens as a percentage of income. In other words, regressive tax systems and government-imposed free structures are economic infringements on freedom that help certain people get wealthy and get monopolies that, like cheating in the game of monopoly, help them continue to have an advantage without the need to cheat again in the future.
3) Consider the fact the government-imposed laws can enable wealth to be transferred from generation to generation in a way that debt may not be. For instance, the bank-robber may rob a bank, not get caught, arrested or sued before death and then pass the stolen wealth onto his child as inheritance; if the government doesn't allow the bank to collect reparations from the child who has inherited the stolen wealth, then the original infringement of freedom has made the robbed person and those who would have inherited his wealth poorer and the robber and those who inherit is stolen money wealthier. We see more large-scale examples of this in countries that have allowed wealth gained by common practices like slavery to be inherited without allowing those who in a free system would have inherited the wealth to collect reparations.
4) Consider the fact that expensive legal representation is used by the wealthy to get out of following the laws that people who can't afford such expensive legal teams have to follow. Thus a double standard of enforcement by the taxpayer funded government gives some people an advantage that they can use to get wealthy and do things like create monopolies.
5) Consider the fact that wealthy special interest groups get huge handouts from the government in the form of bailouts, subsidies and government contracts thanks to lobbying, campaign contributions and any kickbacks the politicians and bureaucrats get from the wealthy groups they give government help. Consider the military-industrial complex. A certain company may get ahead and beat out the competition and form a monopoly not because they performed well in a free market (and it could be argued that long-lasting monopolies wouldn't form in a truly free market) but because they received huge revenue streams from the government. I could build the best company in any industry and buy out all the competition if the government gave me a trillion dollars of taxpayer money to do nothing.
6) Consider government-run and/or government-funded education systems that are unequal and thus give some people a powerful advantage over others. If one person is the executive of a successful company that eventually grows into a monopoly and another person is not, the cause may simply be that the first person received a top-class free education funded by the government and the other person was taxed in the name of education but never given an adequate one.
| TheCorsairMalack wrote: |
| Also, your second paragraph. Is what you're saying that a more perfect law prevents the cheating in the first place rather than tries to repair it after it's done? |
Yes, I think a more perfect law and system would either prevent the cheating in the first place or would more fully rectify the cheating. If Joe steals $100 from Jill and a legal code and civil court forces him to pay her $20 back, that's justified but it's not enough. I'm saying these competition laws are like ordering thieves to give $20 back, it neither stops the original problem nor fully rectifies the effects of the original problem.
Thanks!
Scott
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TheCorsairMalack
Joined: 17 Aug 2009
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| Post: #5 Posted: Wed May 26, 2010 12:44 am Post subject: |
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All very good points Scott. These would all make unfair earning or losing potential.
My main curiosity lies with number 3 however.
Scott said:
| Quote: |
| ...laws can enable wealth to be transferred from generation to generation in a way that debt may not be. |
I do not believe that debt being passed on would constitute a fair principle. A child whose parents buy a house and then die should not be left with that debt. It is grossly unfair. The lender took a business risk by investing in that home. Unforeseen circumstances caused it to be a financial failure. He must take the loss just as any sailor whose boat sinks.
Thank you very much Scott. You have answered my questions incredibly well. I'll have to think on what you have said. This topic is a part of a personal goal of designing a 'better' system. Maybe sometime soon I'll start another thread and continue. |
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whitetrshsoldier
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| Post: #6 Posted: Thu May 27, 2010 3:30 pm Post subject: |
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Competition laws are put into place because people with power wish to selectively direct their use of that power. It is as simple as that.
| Frederic Bastiat wrote: |
The strange phenomenon of our times one which will probably astound our descendants is the doctrine based on this triple hypothesis: the total inertness of mankind, the omnipotence of the law, and the infallibility of the legislator. These three ideas form the sacred symbol of those who proclaim themselves totally democratic.
The advocates of this doctrine also profess to be social. So far as they are democratic, they place unlimited faith in mankind. But so far as they are social, they regard mankind as little better than mud. Let us examine this contrast in greater detail.
What is the attitude of the democrat when political rights are under discussion? How does he regard the people when a legislator is to be chosen? Ah, then it is claimed that the people have an instinctive wisdom; they are gifted with the finest perception; their will is always right; the general will cannot err; voting cannot be too universal.
When it is time to vote, apparently the voter is not to be asked for any guarantee of his wisdom. His will and capacity to choose wisely are taken for granted. Can the people be mistaken? Are we not living in an age of enlightenment? What! are the people always to be kept on leashes? Have they not won their rights by great effort and sacrifice? Have they not given ample proof of their intelligence and wisdom? Are they not adults? Are they not capable of judging for themselves? Do they not know what is best for themselves? Is there a class or a man who would be so bold as to set himself above the people, and judge and act for them? No, no, the people are and should be free. They desire to manage their own affairs, and they shall do so.
But when the legislator is finally elected ah! then indeed does the tone of his speech undergo a radical change. The people are returned to passiveness, inertness, and unconsciousness; the legislator enters into omnipotence. Now it is for him to initiate, to direct, to propel, and to organize. Mankind has only to submit; the hour of despotism has struck. We now observe this fatal idea: The people who, during the election, were so wise, so moral, and so perfect, now have no tendencies whatever; or if they have any, they are tendencies that lead downward into degradation. |
Not only is mankind, in a democracy, considered wise enough to choose leaders, but he is also assumed righteous in his general intentions with life. But once a Representative is elected with the power to exact any law that acts with selective force, woe to the enemy of that elected man ...
| Frederic Bastiat wrote: |
Well, what liberty should the legislators permit people to have? Liberty of conscience? (But if this were permitted, we would see the people taking this opportunity to become atheists.)
Then liberty of education? (But parents would pay professors to teach their children immorality and falsehoods; besides, according to Mr. Thiers, if education were left to national liberty, it would cease to be national, and we would be teaching our children the ideas of the Turks or Hindus; whereas, thanks to this legal despotism over education, our children now have the good fortune to be taught the noble ideas of the Romans.)
Then liberty of labor? (But that would mean competition which, in turn, leaves production unconsumed, ruins businessmen, and exterminates the people.)
Perhaps liberty of trade? (But everyone knows and the advocates of protective tariffs have proved over and over again that freedom of trade ruins every person who engages in it, and that it is necessary to suppress freedom of trade in order to prosper.)
Possibly then, liberty of association? (But, according to socialist doctrine, true liberty and voluntary association are in contradiction to each other, and the purpose of the socialists is to suppress liberty of association precisely in order to force people to associate together in true liberty.)
Clearly then, the conscience of the social democrats cannot permit persons to have any liberty because they believe that the nature of mankind tends always toward every kind of degradation and disaster. Thus, of course, the legislators must make plans for the people in order to save them from themselves.
This line of reasoning brings us to a challenging question: If people are as incapable, as immoral, and as ignorant as the politicians indicate, then why is the right of these same people to vote defended with such passionate insistence?
Clearly then, the conscience of the social democrats cannot permit persons to have any liberty because they believe that the nature of mankind tends always toward every kind of degradation and disaster. Thus, of course, the legislators must make plans for the people in order to save them from themselves.
This line of reasoning brings us to a challenging question: If people are as incapable, as immoral, and as ignorant as the politicians indicate, then why is the right of these same people to vote defended with such passionate insistence? |
Bastiat raises an interesting question here. And he also makes an astounding point later ...
| Frederic Bastiat wrote: |
Immediately following the development of a science of economics, and at the very beginning of the formulation of a science of politics, this all-important question must be answered: What is law? What ought it to be? What is its scope; its limits? Logically, at what point do the just powers of the legislator stop?
I do not hesitate to answer: Law is the common force organized to act as an obstacle of injustice. In short, law is justice.
It is not true that the legislator has absolute power over our persons and property. The existence of persons and property preceded the existence of the legislator, and his function is only to guarantee their safety.
It is not true that the function of law is to regulate our consciences, our ideas, our wills, our education, our opinions, our work, our trade, our talents, or our pleasures. The function of law is to protect the free exercise of these rights, and to prevent any person from interfering with the free exercise of these same rights by any other person.
Since law necessarily requires the support of force, its lawful domain is only in the areas where the use of force is necessary. This is justice.
Every individual has the right to use force for lawful self-defense. It is for this reason that the collective force which is only the organized combination of the individual forces may lawfully be used for the same purpose; and it cannot be used legitimately for any other purpose.
Law is solely the organization of the individual right of self-defense which existed before law was formalized. Law is justice. |
So "Competition Laws" are essentially just examples of the government using "Force" to deprive individuals of their right to liberty and property. Nothing more, nothing less.
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"I'm sorry if I hurt your feelings! I'm obviously just insecure with the ineptitudes of my logic and rational faculties. Forgive me - I'm a "lost soul", blinded by my "ignorant belief" that there's such a thing as reality and truth in the world" |
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Unrealist42
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| Post: #7 Posted: Thu May 27, 2010 3:58 pm Post subject: |
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| whitetrshsoldier wrote: |
So "Competition Laws" are essentially just examples of the government using "Force" to deprive individuals of their right to liberty and property. Nothing more, nothing less. |
No, competition laws are examples of government acting to protect the right to liberty and property of the many from a few who are in the position to use coercion to limit or deprive the many of liberty and property.
Certainly there are many examples where this has gone awry but this does not bely the basic intention of competition laws or government action to protect the rights of the many from the depredations of a few. |
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whitetrshsoldier
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| Post: #8 Posted: Fri May 28, 2010 1:18 pm Post subject: |
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| Unrealist42 wrote: |
| whitetrshsoldier wrote: |
So "Competition Laws" are essentially just examples of the government using "Force" to deprive individuals of their right to liberty and property. Nothing more, nothing less. |
No, competition laws are examples of government acting to protect the right to liberty and property of the many from a few who are in the position to use coercion to limit or deprive the many of liberty and property.
Certainly there are many examples where this has gone awry but this does not bely the basic intention of competition laws or government action to protect the rights of the many from the depredations of a few. |
That is what Legislators claim they are there for. But, please tell me Realist42, how do they implement these laws?
| Fr้d้ric Bastiat wrote: |
Law Is a Negative Concept
The harmlessness of the mission performed by law and lawful defense is self-evident; the usefulness is obvious; and the legitimacy cannot be disputed.
As a friend of mine once remarked, this negative concept of law is so true that the statement, the purpose of the law is to cause justice to reign, is not a rigorously accurate statement. It ought to be stated that the purpose of the law is to prevent injustice from reigning. In fact, it is injustice, instead of justice, that has an existence of its own. Justice is achieved only when injustice is absent.
But when the law, by means of its necessary agent, force, imposes upon men a regulation of labor, a method or a subject of education, a religious faith or creed then the law is no longer negative; it acts positively upon people. It substitutes the will of the legislator for their own wills; the initiative of the legislator for their own initiatives. When this happens, the people no longer need to discuss, to compare, to plan ahead; the law does all this for them. Intelligence becomes a useless prop for the people; they cease to be men; they lose their personality, their liberty, their property.
Try to imagine a regulation of labor imposed by force that is not a violation of liberty; a transfer of wealth imposed by force that is not a violation of property. If you cannot reconcile these contradictions, then you must conclude that the law cannot organize labor and industry without organizing injustice. |
Please tell me about a Competition Law that does not require the Government to deprive a man of his property [or his ability to freely associate, also known as liberty]. If you can do that, I'll be happy to accept your statement.
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"I'm sorry if I hurt your feelings! I'm obviously just insecure with the ineptitudes of my logic and rational faculties. Forgive me - I'm a "lost soul", blinded by my "ignorant belief" that there's such a thing as reality and truth in the world" |
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Marabod
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| Post: #9 Posted: Fri May 28, 2010 1:34 pm Post subject: |
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| Well, we became humans from the Apes because we had to compete - with other life forms and with each other. Competition is cruel but essential. As Nietzsche formulated this "All weak and botched must die". |
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Unrealist42
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| Post: #10 Posted: Tue Jun 01, 2010 3:08 pm Post subject: |
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| whitetrshsoldier wrote: |
Please tell me about a Competition Law that does not require the Government to deprive a man of his property [or his ability to freely associate, also known as liberty]. If you can do that, I'll be happy to accept your statement. |
It is a question of whose rights and liberties the government is protecting. It is government law that licenses businesses and corporations as artificial entities. When these implement anti-competitive practices that deprive others of their natural rights and liberties through extortionate acts it is only reasonable that government remedy the situation by regulating unnatural rights of artificial businesses rather than endorsing their depredations on the many whose rights are natural. In the case of business regulation the government takes the position that natural rights trump artificial rights.
In most cases the government is not depriving anyone of any property with competition laws. It does not take anything. At most it requires them only to rearrange their business activities a little. It does not require them to make divestitures at a loss. Shareholders do not suffer.
As far as the liberty of freedom of association goes. There is no freedom of association, i.e. no liberty to extort. That government acts to break up extortion rackets no matter where it finds them is just the normal exercise of its duties to protect the rights and liberties of all the citizenry. |
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whitetrshsoldier
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| Post: #11 Posted: Tue Jun 01, 2010 3:47 pm Post subject: |
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| Unrealist42 wrote: |
| whitetrshsoldier wrote: |
Please tell me about a Competition Law that does not require the Government to deprive a man of his property [or his ability to freely associate, also known as liberty]. If you can do that, I'll be happy to accept your statement. |
It is a question of whose rights and liberties the government is protecting. It is government law that licenses businesses and corporations as artificial entities. When these implement anti-competitive practices that deprive others of their natural rights and liberties through extortionate acts it is only reasonable that government remedy the situation by regulating unnatural rights of artificial businesses rather than endorsing their depredations on the many whose rights are natural. In the case of business regulation the government takes the position that natural rights trump artificial rights. |
Huh? You're making my point here, Unrealist42. By giving certain businesses "special" statuses as "corporations", the government [who EXISTS SOLELY BY DEPRIVING INDIVIDUALS OF PROPERTY] is encouraging the artificial anti-competitive market that you say "requires" their intervention.
Think about it; without government intervention in the first place, business owners wouldn't have the ability to curry "extortionate" benefits that they are able to once they acquire the zero liability status they enjoy as a "corporation", would they?
Maybe a single business-owner would still buy out a lot of other companies, but he couldn't use the government to create a "protected legal status" for himself that he enjoys once he ceases to remain an individual and becomes a "collective entity".
| Unrealist42 wrote: |
In most cases the government is not depriving anyone of any property with competition laws. It does not take anything. At most it requires them only to rearrange their business activities a little. It does not require them to make divestitures at a loss. Shareholders do not suffer.
As far as the liberty of freedom of association goes. There is no freedom of association, i.e. no liberty to extort. That government acts to break up extortion rackets no matter where it finds them is just the normal exercise of its duties to protect the rights and liberties of all the citizenry. |
The government cannot exist without depriving EVERYBODY of property in the first place.
As far as the "liberty of freedom of association" goes, how and why does the government have some special ability to dictate which company gets to do business with another?
If they possess this ability, are they not depriving a person [the business owner] of his right to liberty and property arbitrarily? If not, please explain how and when they have a right to use force to tell a man when his business deal is "unfair"?
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"I'm sorry if I hurt your feelings! I'm obviously just insecure with the ineptitudes of my logic and rational faculties. Forgive me - I'm a "lost soul", blinded by my "ignorant belief" that there's such a thing as reality and truth in the world" |
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Unrealist42
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| Post: #12 Posted: Tue Jun 01, 2010 8:22 pm Post subject: |
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Government is the ones who granted property arbitrarily in the first place so I do not understand what you are trying to argue here. If it is some sort of violation of the mythical right to property then you are barking up the wrong tree because there is no such thing as rights in the first place, only privileges granted by tyrants. In this case, your typical government tyrant.
The government giveth the government taketh away. |
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whitetrshsoldier
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| Post: #13 Posted: Wed Jun 02, 2010 12:58 pm Post subject: |
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| Unrealist42 wrote: |
Government is the ones who granted property arbitrarily in the first place so I do not understand what you are trying to argue here. If it is some sort of violation of the mythical right to property then you are barking up the wrong tree because there is no such thing as rights in the first place, only privileges granted by tyrants. In this case, your typical government tyrant.
The government giveth the government taketh away. |
Are you kidding me?
That's exactly what I said before you defended the government's "just right" to defend certain entities over others. Other than the fact that man has no right to property ... if that were true, then you have no right to breathe eat or drink!
_________________
"I'm sorry if I hurt your feelings! I'm obviously just insecure with the ineptitudes of my logic and rational faculties. Forgive me - I'm a "lost soul", blinded by my "ignorant belief" that there's such a thing as reality and truth in the world" |
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Unrealist42
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| Post: #14 Posted: Fri Jun 04, 2010 9:19 pm Post subject: |
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| whitetrshsoldier wrote: |
That's exactly what I said before you defended the government's "just right" to defend certain entities over others. Other than the fact that man has no right to property ... if that were true, then you have no right to breathe eat or drink! |
You have no right to breath or eat or drink or even to live for that matter. All you are granted by being alive is the opportunity to continue your existence. There is no such thing as rights. |
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whitetrshsoldier
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| Post: #15 Posted: Mon Jun 14, 2010 5:24 pm Post subject: |
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| Unrealist42 wrote: |
| You have no right to breath or eat or drink or even to live for that matter. All you are granted by being alive is the opportunity to continue your existence. There is no such thing as rights. |
I have no "right" to do it, but I have the "opportunity" to do it. Ok, let's call it my "opportunity" to Life, Liberty, and Property.
And since my "opportunity" to continue these things implies that I require property and liberty to continue my existence, and that I will fight for self-preservation against any who attempt to end my "opportunities", does it really matter what word you use?
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"I'm sorry if I hurt your feelings! I'm obviously just insecure with the ineptitudes of my logic and rational faculties. Forgive me - I'm a "lost soul", blinded by my "ignorant belief" that there's such a thing as reality and truth in the world" |
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