Comment by array_key_first
1 day ago
Right, but regulations are necessary. And ideological opposition to regulation, as a concept, in inherently wrong and always will be.
Some regulations are good, some are bad. In order to have a free market, you MUST have some regulations. It's not optional.
The reason is simple and intuitive - if you don't regulate the free market, it will just make itself un-free, which is what we're seeing with Apple. You need to actively push back against that.
The reason is all free market players, no exceptions, have the utmost fundamental incentive to make the market non-free. Everyone, all the time, is devising new and innovative ways to make the market they control non-free. Because this is how you maximize revenue.
which is what we're seeing with Apple
Apple is the result of a broad class of regulations: IP laws. Would Apple even exist without IP laws? I doubt it.
That's besides the point. If Apple isn't viable as a business without the ability to misinterpret copyright law, then they shouldn't exist at all.
It isn't though. The argument is that regulations are necessary to rein in big companies like Apple. But if regulations created the monster in the first place, it's not a good argument in favour of regulations.
A proper laissez-faire capitalist economy would not have any legally-enforced monopolies at all. That means no IP laws whatsoever!
Thank you for your response :)
I would push back a bit on the ideological comment, just to say that ideological acceptance of regulation is also probably wrong. This is different from a philosophical opposition/acceptance of political authority, although it often appears the same.
I think it's fairly obvious that the base prerequisites for market economies are property rights and some form of legal system to handle disputes. I don't consider that to be "regulation", especially not government regulation, but if that is what you mean by the term then of course I would concede that markets require it. However since even the most fervent proponents of laissez-faire economies accept the necessary role of property rights and a legal system, I would consider those to be separate from what we commonly refer to as regulation.
Ok to respond to your main point: It seems reasonable to me that in a competitive market there is an incentive to win, and companies can win by preventing others from being able to compete. This is commonly done via regulation, for example the big companies are lobbying for regulation on AI to help cement their position at the top. The thing is, just because companies are incentivized to win doesn't mean that it's possible to sustain a monopoly position for a significant amount of time. Unlike other competitive activities there isn't a time clock with winners declared at the end. Economists have shown that absent of external cofounders, a position where a company can charge monopoly prices is unsustainable.
There is of course a stronger position to be made for regulating so called natural monopolies, but even then there isn't much evidence that they really exist. Some of the most cited examples, like telecom providers, end up not being true - look at Eastern Europe and what happened when they deregulated that industry for example.
> for example the big companies are lobbying for regulation on AI to help cement their position at the top
And pray tell, how did that work out? It didn't. The worst of it came from OpenAI snatching up long-term federal contracts, but it's not illegal or anticompetitive to waste taxpayer money on debt-encumbered AI outfits. You're citing an example that works against your broader point.
> doesn't mean that it's possible to sustain a monopoly position for a significant amount of time.
> Unlike other competitive activities there isn't a time clock with winners declared at the end.
Neither the SEC nor the FTC has ever argued either of these points to my knowledge. Maybe this is true for other economies, but not America.
> Economists have shown that absent of external cofounders
We don't live in a world absent of confounding factors. Simple cartel logic is enough to loophole around this little theory: https://en.wikipedia.org/wiki/Cartel
I personally don't take offense at people who prefer anarchist economics. But you have to understand that your opinion about regulation is not shared by even the most hardcore conservative politicians. US courts have proven that it is possible to hold an indefinite monopoly and incur billable damages onto the market, hurting consumers and competitors alike.
Mmm, if you read about cartel prices you'll see that it's inherently unstable since there is incentive for any one member of the cartel to cheat, driving down prices. That isn't a loophole around the theories around monopoly pricing. What tends to confound are government laws and regulations, like IP law for example.
Re. OpenAI et al, they actually work with the US government to help shape the regulatory landscape, and interestingly enough since Google jumped out ahead they are now pushing for a lighter model. I imagine Google is pushing for heavier regulation since that tends to be their M.O.
Also I don't have anarchist economics - anarchists don't believe in property rights or markets, and they certainly don't understand economics. And I certainly don't put any stock in what right leaning American politicians or their courts think or say.