View Full Version : Help arguing with a Socialist?
FortisKID
10-11-2011, 06:40 PM
This is his argument against Free-markets:
If there is a free economie with 3 book store's in a city, each in competition. Each have 33% of the business. If two of the owners could merge their stores they could out compete the 3rd and both owners would increase their profit. One then fails because it cant compete, the other combined store would grow, till their is only one book store remaining country.--If their is only one store to begin with, made bye all the people, and profited by all the people, nobody is unemployed and nothing grows to manipulate the market
Can someone help me explain why this would not happen and how monopolies can't exist in a free-market?
VBRonPaulFan
10-11-2011, 06:56 PM
he makes several silly assumptions to make his argument.
first, he assumes each business has the exact same market share which is pretty silly.
second, he assumes that two competitors would be willing to merge to push out another.
lastly, he fails to realize that a monopoly in a business has no way to know what a competitive price is for their product/service. as soon as they start becoming noncompetitive, someone will jump in to capture some of the market share and will grab a foothold again. this has happened time and time again throughout history - to think that isn't the case is to ignore reality. what he assumes to be the outcome does not explain why there are multiple car manufacturers, multiple fast food chains, etc.
Wesker1982
10-11-2011, 07:27 PM
http://www.youtube.com/watch?v=eO8ZU7TeKPw
Also see:
Fear of Monopoly (http://mises.org/daily/621)
In an economy free of governmental regulation, wouldn't a firm or group of firms obtain a monopoly over some vital resource or product? And won't the monopoly then exercise its power by raising prices? (http://www.fff.org/freedom/0592c.asp)
The Myth of Natural Monopoly (http://mises.org/daily/5266/The-Myth-of-Natural-Monopoly)
Most monopolies are not created by selfish others, but by our own aggression. (http://www.ruwart.com/Healing/chap7.html)
reillym
10-11-2011, 07:34 PM
he makes several silly assumptions to make his argument.
first, he assumes each business has the exact same market share which is pretty silly.
second, he assumes that two competitors would be willing to merge to push out another.
lastly, he fails to realize that a monopoly in a business has no way to know what a competitive price is for their product/service. as soon as they start becoming noncompetitive, someone will jump in to capture some of the market share and will grab a foothold again. this has happened time and time again throughout history - to think that isn't the case is to ignore reality. what he assumes to be the outcome does not explain why there are multiple car manufacturers, multiple fast food chains, etc.
Not true, at all. That only happens if a company can enter the market. Many markets are have entry-prices far too high to warrant any initial investment. ex, cable companies, phone companies, etc.
Monopolies are very possible in any sort of market scenario. They have happened throughout history and will continue to do so.
Seraphim
10-11-2011, 07:38 PM
Thanks to State regulations and labor laws that are well intentioned but functionally retarted.
It is NOT that expensive to enter the market when artificial State barriers are removed.
Try again.
Not true, at all. That only happens if a company can enter the market. Many markets are have entry-prices far too high to warrant any initial investment. ex, cable companies, phone companies, etc.
Monopolies are very possible in any sort of market scenario. They have happened throughout history and will continue to do so.
dannno
10-11-2011, 07:39 PM
If two of the owners could merge their stores they could out compete the 3rd and both owners would increase their profit.
Ask them to explain this part in more detail.
dannno
10-11-2011, 07:45 PM
Ask them to explain this part in more detail.
The only valid explanation I've been able to come up with is that the per store advertising expenses might go down since they now have one store name to promote instead of two, and they might save on some costs related to purchasing. But there are still two owners who are going to want to keep their salaries high.
However these costs cuts can be beneficial for the consumer in that books might be less expensive. That isn't a bad thing.
Also important is that once these stores start getting bigger, it becomes more difficult for them to cater to the needs and flavor each individual locality. This is where smaller businesses can do much better, and the market can decide which is better.
Unfortunately today we have a business climate that favors big corporations, but that is because of government regulations, taxes and banks that control the money supply. If big businesses and small businesses competed on a level playing field, then you would find a balance in each industry that supplied the best service for each individual community.
VBRonPaulFan
10-11-2011, 08:11 PM
Not true, at all. That only happens if a company can enter the market. Many markets are have entry-prices far too high to warrant any initial investment. ex, cable companies, phone companies, etc.
Monopolies are very possible in any sort of market scenario. They have happened throughout history and will continue to do so.
... and who determines who can/cannot enter a certain marketplace? i'm pretty sure you already know the answer, but i'll let you respond. (note that we are talking about free markets here)
edit: also, how did the monopolized company in your example get to be that way in the first place? after all, the barrier to entry is so high that even the monopolized company shouldn't have been able to start to begin with :rolleyes:
silverhandorder
10-11-2011, 08:13 PM
This is his argument against Free-markets:
Can someone help me explain why this would not happen and how monopolies can't exist in a free-market?
Why does he think it is more profitable for both owners to merge? How does he justify making such an assumption? One needs to understand profits to be able to talk about them. Profits are rewards for pleasing the market. So if they are getting more profits this means people prefer their business. As long as they continue pleasing people why should this be a problem? Once they stop they will be replaced by someone that does.
Not true, at all. That only happens if a company can enter the market. Many markets are have entry-prices far too high to warrant any initial investment. ex, cable companies, phone companies, etc.
Monopolies are very possible in any sort of market scenario. They have happened throughout history and will continue to do so.
If the business is profitable there will be investments. What you describe is actually a likely situation where it is not profitable to start a business in the first place. I rather investments go into areas where there are needed.
gerryb
10-11-2011, 08:20 PM
If their is only one store to begin with, made bye all the people, and profited by all the people, nobody is unemployed and nothing grows to manipulate the market
So we should force a monopoly in books controlled by the state, in order to prevent three companies that specialize in books from merging into the same thing naturally(if it makes the most economic sense for their survival to do so)?
Here are the places I know of that sell books in my town: Grocery store, health food store, vitamin shop, farmers market, hardware store, garden center, gift shop, flower shop. This is not including the "big box" stores, and i'm sure I haven't noticed books in a bunch of other stores I go to...
Why would it be beneficial to force these stores to stop competing and to have one book store? Are we also going to have one publisher? How about one author?
Liberty74
10-11-2011, 08:27 PM
Yet, your Socialist friend favors a monopoly of one tyrannical federal government and one secretive Federal Reserve?
I believe it is the JOB of a President and the federal government to create an environment where businesses can compete in a free market, hence anti-monopoly rules are in place for commerce reasons. One of the very few things the federal government should do.
Tell your mindless friend that he is being hypocritical. If he is against monopolies, he would be in favor of limited federal government and support of a Republic where people have a choice to choose which government to live under i.e. State.
pcosmar
10-11-2011, 08:31 PM
Is it a republican socialist or a democrat socialist?
Sometimes that makes a difference.
redbluepill
10-11-2011, 09:34 PM
This is his argument against Free-markets:
Can someone help me explain why this would not happen and how monopolies can't exist in a free-market?
Monopolies would not exist in a true free market. That is, a free market where land is held in common but capital and labor is private property. Tax the full value of the land (which the community creates) and you will not see the monopolies your statist friend warns about.
ClayTrainor
10-11-2011, 09:42 PM
a free market where land is held in common but capital and labor is private property.
:confused:
Sentient Void
10-11-2011, 09:58 PM
In a place where labor abounds but there is comparatively little capital, the businessmen will tend to have more leverage. In extreme cases they'll basically have it all. In a place where capital abounds but there is comparatively little labor it's the other way around: high wages, lots of room for employees to negotiate, and plenty of opportunities to jump ship if the cigar chompers aren't making the workers happy.
The leftist response to corporate power is to strive to control, restrict, and punish capital. In other words, to make labor more abundant and less valuable. Way to go, progressives!
libertybrewcity
10-11-2011, 10:05 PM
Give him a spelling lesson before you argue any further.
If there is a free economie with 3 book store's in a city, each in competition.[consider revising sentence] Each have 33% of the business. If two of the owners could merge their stores they could out compete the 3rd and both owners would increase their profit. One then fails because it cant compete, the other combined store would grow, till their is only one book store remaining country.--If their is only one store to begin with, made bye all the people, and profited by all the people, nobody is unemployed and nothing grows to manipulate the market
I'm sure there are other grammatical errors as well.
http://images4.wikia.nocookie.net/__cb20070204063346/uncyclopedia/images/b/b3/Mainscreen1.jpg
libertybrewcity
10-11-2011, 10:12 PM
Tell him to look at a real life examples. Does this happen in the city or town that he lives in? If he lives in a small town why doesn't that monopolistic book store raise prices and take the entire market share. Well, that store would go out of business as people in the town flock to a nearby city or online. When I was in high school I started an online used book store. Who is to say that all people buy their books from those stores? They could go to rummage sales, resale shops, etc etc.
Pauls' Revere
10-11-2011, 10:15 PM
This is his argument against Free-markets:
Can someone help me explain why this would not happen and how monopolies can't exist in a free-market?
In a "free market" a true free market monopolies would not exist because as competition deminihes so does selection and people will want more selection through free association and free will. Imagine if all you could buy were yellow cars of one type from only one car manufacturer. Do you think it would be difficult to sell a blue car to someone so they can differentiate themselves? In addition, those with the imagination (say Steve Jobs, or Bill Gates) will think of a better way to make the product or do it at a cheaper price. I will however add this caveat, that there might be barriers to entry (start up cost etc) but private investment should overcome that. I hope this helps.
redbluepill
10-11-2011, 10:45 PM
:confused:
Just as the libertarian economist Milton Friedman argued: "Land should be taxed as much as possible, and improvements as little as possible." http://www.cooperativeindividualism.org/land-question_f-h.html
He understood the benefits. And one of the benefits of it is the prevention (or at least reduction) of monopolies.
Czolgosz
10-11-2011, 10:52 PM
<drive by comment>
If you're "arguing" then the message isn't being heard.
<speeds off>
Socialists in the US don't even look like regular people. They are weird looking, and don't look, act, or dress normal, and almost every one of them either has messy hair or scruffy facial hair. I wouldn't want them on my side unless they took a shower.
Wesker1982
10-12-2011, 09:19 AM
I also recommend the chapter Monopoly and Competition (http://mises.org/rothbard/mes/chap10a.asp) from Man, Economy, and State.
pcosmar
10-12-2011, 09:42 AM
Socialists in the US don't even look like regular people. They are weird looking, and don't look, act, or dress normal, and almost every one of them either has messy hair or scruffy facial hair. I wouldn't want them on my side unless they took a shower.
That doesn't describe Romney at all. And he is an American socialist. As are most of the "R" candidates.
The US has been a socialist country since the early 1900s,, as is most of the world.
few give little more than lip service to our Constitution.
Ron Paul is a noticeable exception, and is not well received by most in his own party.
As far as your "description", fits a large portion of the working class poor. Shrimpers, construction and farm workers.
Both Rednecks and hippie.
And often myself. (I am a cross between both)
http://farm4.static.flickr.com/3386/5693814909_6118e5e85f_z.jpg
redbluepill
10-13-2011, 05:22 AM
Here's a great libertarian article on the different kinds of monopolies that dominate economies: http://www.thefreemanonline.org/featured/the-many-monopolies/
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