Comment by yonran
5 months ago
Ironically for a question about antitrust price fixing you just named two incumbent government-sanctioned cartels (zoning and taxi medallions) that restrict supply and keep prices high. They would be illegal if private companies made them.
> They would be illegal if private companies made them.
A lot of things governments do would be illegal if private companies did them. Are you arguing that governments shouldn't have special abilities that companies can't have? Should every road be owned by a company? Should the police report to Amazon instead of the local municipality where you may actually have a say in how they are run?
We give governments additional powers because they, at least nominally, answer to citizens and society. Companies have no such responsibility.
I’m saying that government regulations that fix prices should be scrutinized and repealed if they reduce opportunity for ordinary people. Such as zoning codes that price out the poor.
I believe the argument here is that the way to do that isn't by establishing a private business that flaunts and undermines those government regulations, but by changing the policies through government process.
Obviously that's easier said than done, and SV has a track record of "ask forgiveness not permission" as a successful tactic for effecting policy change. But many times it results in indefinite undermining of government which leads to selective enforcement and cartels, which is worthy of criticism (of both government and VC-powered undermining of government).
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> They would be illegal if private companies made them.
Yes, that's kind of the main difference between government functions and private companies. Are you saying the very idea of zoning strikes you as a problem? Or are you trying to call out the bad implementations which strangle urban prosperity in the US?
> Yes, that's kind of the main difference between government functions and private companies
Perhaps that should change. Or at least it’s a reason to scrutinize and repeal laws that are used for price fixing.
> Are you saying the very idea of zoning strikes you as a problem? Or are you trying to call out the bad implementations which strangle urban prosperity in the US?
Zoning Rules! by William Fischel gives good a history of zoning. Zoning was originally for segregation within the city but to the question of prices, no it was not inherently problematic. It was not until the 1970s that zoning was used for growth control to make entire cities unaffordable.
Unless it's pollution-based zoning, I agree that the idea of zoning is a problem.
That's not ironic. Governments and private companies are not the same kind of entities. They have different roles, different roots of legitimacy, different forms of accountability, different operational objectives, and carry different expectations.
It’s ironic that in response to a question about price fixing, failuser brought up other companies that were formed to circumvent government price fixing, and in his examples the governments doing the price fixing were supposedly the good guys!
In the case of Uber, they successfully broke up the taxi cartel since the state PUC ruled that ride hail is a separate category.
In the case of Airbnb, according to their founding story they were created to help economize on space because rents were high in San Francisco due to zoning. Although they made a useful service, they did not succeed in reducing rents because the underlying zoning is still the constraint that keeps rents high.
I did not say those were even good laws. Many people go to jail for breaking bad laws though.
And the government can establish monopolies on many things, my private nuclear weapons startup did not get much traction either.
Zoning, ok, but yellow cabs are now often cheaper than Uber. Last time I took a ride from the airport the difference was not small, like 50%.
compete or die
The problem with that is thanks to many years of below cost pricing Uber has become synonymous with taxi now, and most people don’t even realize (or care) that taxis are often cheaper.
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Many things a government does would be illegal if private companies did them. For example, prison, the draft, and taxes. The government is allowed to do it because we (as a society) believe it's better for the government to do these things than private individuals or companies.
Can you give examples of the topic at hand, price fixing, that are justified? There are a handful of progressive forms of price fixing (e.g. minimum wage laws), but many others should be added to the Niskanen Center’s list of bad regulations in the Captured Economy.
Utilities that trend towards natural monopolies due to high barriers to entry like water and electricity infrastructure are often run by the government or heavily regulated because pricing would be extortionate if the market were allowed to set prices.
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Sure, zoning and taxi medallions are two examples of justified "price fixing."
You have heard of the Prison Indistrial Complex right? Our Prisons have been For-Profit for a long time now. Totally legal, government sanctioned privatized penitentiaries.
Yes, I have. Perhaps I should have made clear that putting people in prison was the thing that was illegal for private companies, not operating a prison.