Comment by eru
5 hours ago
Free markets don't automatically do anything. There's nothing automatic. It's about giving individual people the opportunity to take action.
5 hours ago
Free markets don't automatically do anything. There's nothing automatic. It's about giving individual people the opportunity to take action.
Free markets tend toward monopoly which restricts individual people’s opportunities for action. In this example, there was a cable monopoly mentioned. The only way to coerce it (not even to defeat it in some way) was through baseless deception, not free market competitive action. The monopoly remained.
> Free markets tend toward monopoly
Not true and oversimplification. Some markets tend toward monopolies, but you rarely will get one unless enforced/protected by a state. If you navigate through history, you will find almost exclusively monopolies on salt extraction, coal mining oligopolies (with the help of worker unions), silk... Curiously, the Standard Oil was accused of being a monopoly, and the proof was they were offering lower prices than anyone thanks to their scale, destroying the competence. The reward for offering low prices was disolving the company (notice that they never reached the hypothetical price hike stage).
It is also common practice for the state to declare something "public utility" or "natural monopoly", on things like snail mail distribution, telephone or TV, that were clearly not a natural monopoly and could be offered by free market. Here fall a lot of ISPs, that get a "public utility" status and only then can abuse that monopolistic position with the help of the state.
A lot of free market sectors tend to atomization: think hair or nail saloons, masonry, plumbers, carpenters... if you know someone in the sector, it seems that as soon as they get a size over 5 or 6 people, two of them always decide to split and go by themselves.
You're right on most of these, but wrong on telephony. That actually was a natural monopoly.
It's exactly how OP describes it. It's unproductive for multiple companies to maintain disconnected, parallel telephone infrastructures. The most productive use of resources is to lay more wires to more houses, not to lay more wires to places which have already been wired up for telephone service by somebody else. That creates a monopoly, and the government should step in.
With modern tech, you can mandate local-loop unbundling and fix some of this, but that wasn't possible with 1970s (and earlier) phone infrastructure.