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The Northbreather
03-27-2012, 07:48 PM
When Ron Paul wins and we start the transfer to a truly free market how will new businesses compete with large and powerful corporations already in place?

Obviously in some instances big business has benefited from their relationship to government.

Will removing government regulation give an established business even more of an edge to the detriment of new business?

Will there need to be any kind of protection for new business during a transitional period (though it seems contrary to free markets)?

Any insight would be appreciated.
I have some other questions on this topic that I'll put in another thread.

Carson
03-27-2012, 08:10 PM
When Ron Paul wins and we start the transfer to a truly free market how will new businesses compete with large and powerful corporations already in place?

Obviously in some instances big business has benefited from their relationship to government.

Will removing government regulation give an established business even more of an edge to the detriment of new business?

Will there need to be any kind of protection for new business during a transitional period (though it seems contrary to free markets)?

Any insight would be appreciated.
I have some other questions on this topic that I'll put in another thread.

Honestly.

If we can move to an honest currency, one we can all bank on, everyone should start regaining strength. I figure we will rise out of the ashes like a bunch on Energizer Bunnies.

The best is yet to be. ?

The Northbreather
03-27-2012, 08:36 PM
Honestly.

If we can move to an honest currency, one we can all bank on, everyone should start regaining strength. I figure we will rise out of the ashes like a bunch on Energizer Bunnies.

The best is yet to be. ?

I agree but I am looking for a more specific answer.

moderate libertarian
03-27-2012, 08:40 PM
RP is already winning in more ways than one, it's a longterm liberty plan with major that requires paradigm shift in decades old US thinking and does conclude overnight.

If Rand Paul became President in 2016 as he very well might if RP got behind that, that would be yet another fruit of effect RP is having on America.

The Northbreather
03-27-2012, 09:11 PM
RP is already winning in more ways than one, it's a longterm liberty plan with major that requires paradigm shift in decades old US thinking and does conclude overnight.

If Rand Paul became President in 2016 as he very well might if RP got behind that, that would be yet another fruit of effect RP is having on America.

I absolutely understand all of that. I'm trying to get my head around the pro and cons of free markets. I don't see how a truly free market could benefit the small guy in the scenario above.

Also, as I understand it, its very hard to fight and sue a corporation from another country. As we know certain industries (like energy and chemical) tend put their bottom line above the health, safety and freedom of people in this country and abroad.

How does the Libertarian view of less regulation solve the issue of corporations pillaging other nations and muddying the name of the american people?

I'm asking for help as I'm in the process of converting my family over to Ron Paul.

kuckfeynes
03-27-2012, 09:47 PM
The reason corporations get so big is because the tax code is written in their favor, and the regulations for any given industry are usually written by the lobbyists of the most powerful corporations in that industry specifically to weaken smaller competitors. Take away these advantages, and many of the large corporations' business plans are not going to work so well.

Remove these barriers to entry, remove the liability of compliance, and the pressure of competition will be on. Also, free the currency and end the price controls, and demand for domestic labor would make unemployment and immigration a non-issue overnight. Then local business really starts to have an advantage in a huge emerging market. We already know the banks aren't solvent, nor Fannie or Freddy. Who knows what other large corporations may not be. Bottom line, the little guy has PLENTY of opportunity when government exits the scenario.

WilliamShrugged
03-27-2012, 10:20 PM
The reason corporations get so big is because the tax code is written in their favor, and the regulations for any given industry are usually written by the lobbyists of the most powerful corporations in that industry specifically to weaken smaller competitors. Take away these advantages, and many of the large corporations' business plans are not going to work so well.

Remove these barriers to entry, remove the liability of compliance, and the pressure of competition will be on. Also, free the currency and end the price controls, and demand for domestic labor would make unemployment and immigration a non-issue overnight. Then local business really starts to have an advantage in a huge emerging market. We already know the banks aren't solvent, nor Fannie or Freddy. Who knows what other large corporations may not be. Bottom line, the little guy has PLENTY of opportunity when government exits the scenario.

this
to help explain...
http://www.youtube.com/watch?v=vMvVmlDN0nY&feature=player_embedded

So that will eliminate more than 99% of the cases of monopoly right there. (Seriously...that percentage. For every one example one might be able to come up with in which a company grows to that sort of position without government privilege I'll give more than 99 others who weren't able to do so despite their best attempts.) But even still that leaves two more things: 1) A company just being big and rich doesn't allow it to gain, and certainly doesn't allow it to maintain, any monopoly power. It doesn't even keep it from going bankrupt:
http://www.youtube.com/watch?v=I0Ocv8aMBjk&feature=player_embedded#!

It is only when you have a de jure monopoly--that is a monopoly by law...when laws prevent other entrants into an industry or sector--that you risk the sort of things these statists are talking about. As long as there is free entry into the market, those things don't exist. That's why US Steel fell apart, that's how every one of these other enormous companies with names like Bank of America, Goldman Sachs, AIG, Bear Stearns, Lehman Bros, GM, Ford, Chrysler...were not only not able to garner the type of monopoly/oligopoly power these people always talk about despite having plenty of government privilege, but were also all brought to their knees and would have all gone bankrupt, again, if not for government interference.

Being a big company does give you advantages, sure. But even a big company with a huge market share is not safe from competition. Just being one of the few players in an industry does not allow you to exploit customers OR workers. Only when there is prevention of new competitors is there any real risk.

Think about it. Why else would you see Philip Morris lobbying for tobacco regulation? (And not just any regulation, regs the company helped write). Why else do you see Skype, Google and Amazon.com pushing for government regulation of the Internet? Or toy companies like Mattel supporting mandatory laws to require toy testing? (Again, the company actually helped write the legislation).

Because they know, that as a larger company, they can sustain the added cost of compliance...but a smaller company couldn't be able to. So basically the government not only helps eliminate competition for the bigger company, but it does so through force. So no matter how much better, cheaper or faster the other guy could do something, it makes no difference because it's a government mandate that stops him. You can't get a much better assurance than that. And what's more, the tax payers are the ones footing the bill for keeping the other guy out of the market. They pay the cost of creating, maintaining and enforcing the rules that keep him out...meaning a company not only gets monopoly privilege, but it also doesn't even have to pay a fraction of the cost for it. It's like having the mafia there to back you up with scare tactics and intimidation...except you don't even have to pay monthly collections. As Russ Roberts (of Hayek/Keynes rap fame) points out, capitalists never liked capitalism. They much prefer corporatism.

The same motivation goes for school officials campaigning for ever-more government presence and regulation in the already government-controlled monopoly of the education industry. They even lobby against such simple things as school vouchers. If someone were truly interested in the education of a child, what problem would they really have with allowing the child to attend school wherever she and her parents felt was best? The truth is their concern is not with the children. It's with maintaining their monopoly.

So that's #1: Just because a company is big, doesn't mean it can get away with cheating customers or employees. Even if it turns out the company has enough of a market share that it is a de facto monopoly (i.e. (mostly) the only provider for a certain class of services or products.) And that leads to #2:

When was the last time you were pissed off at a company selling you a product at a lower price?

Some people say "they will just work on some kind of massive scale letting them make things cheaper than any startup could." And? What the hell is wrong with offering a better product at a cheaper price? Since when is it such a bad thing to give the customer what he wants? This is exactly how Standard Oil came to hold the market position it did. Rockefeller was obsessed with efficiency and was always finding ways to improve his service. He captured such a big market share because his innovations made him the only guy who could still make a profit when oil went down to a nickel a barrel. Pretty much any company he bought was already facing bankruptcy because they couldn't make a profit...meaning people got their goods at ever lower prices. Not only that, but he even helped the environment:

Quote:
Back when there were a lot of oil companies competing to make the most of their find, companies would often pump waste products into rivers or straight out on the ground rather than going to the cost of researching proper disposal. They also cut costs by using shoddy pipelines that were prone to leakage. By the time Standard Oil had cornered 90% of oil production and distribution in the United States, it had learned how to make money off of even its industrial waste - Vaseline being but one of the new products launched.


The truth is there is absolutely nothing inherently bad about a de facto monopoly and the case of Standard Oil proves it. Innovation was through the roof, prices were through the floor, and more and more people were able to get the products they needed because (a) they were finally invented and (b) the people could finally afford them. Standard Oil in fact is a great example of many of the benefits to a de facto monopoly:

Quote:
The benefits of having a monopoly like Standard Oil in the country was only realized after it had built a nationwide infrastructure that no longer depended on trains and their notoriously fluctuating costs, a leap that would help reduce costs and the overall price of petroleum products after the company was dismantled. The size of Standard Oil allowed it to undertake projects that disparate companies could never agree on and, in that sense, it was as beneficial as state-regulated utilities for developing the U.S. into an industrial nation.


A large market share does very little to put a company in a position to take advantage of anyone. It is only when the government gets involved do things get messy. It is only when the government prevents entrants into a market, and creates a de jure monopoly do these threats of price fixing and employee exploitation exist. Also important to note, as Doug French outlines (audio here) there actually is an upper limit to how large a company can get and not essentially "buckle under its own weight" so to speak.

The truth is these evil "robber barons" of the late 19th and early 20th century were not so...


http://www.youtube.com/watch?v=BbIIPtLEVbA

RabbitMan
03-27-2012, 10:40 PM
I worked at a small independent convenience store bar for the past year. I'll first say that if we followed every health regulation that we simply would not sell food in our store, it is a huge burden and complication when the customers honestly don't care, as we fix it right in front of them. Second, when my wife came on as the owner's personal assistant, she was tasked with dealing with the store's paperwork and recording of its finances. She is a progressive at heart, skeptical of big business and pro-regulations. Well, even she was horrified by the amount of red tape and bureaucracy she had to deal with, the amount of useless paperwork and information she had to record at the expense of precious time and money of the owner. She's lately had an almost 180' turn-around and is beginning to think that regulations only help big corporations, those that have the vast amount of resources to waste on redundant copies of forms that don't matter that must be submitted to five different departments on different levels of the government. So....yeah.

Free markets help small business a lot. Im sure regulations help in some extreme cases, but it is only an expediency that in the end just gets in the way of doin' bidness.

onlyrp
03-27-2012, 11:36 PM
When Ron Paul wins and we start the transfer to a truly free market how will new businesses compete with large and powerful corporations already in place?


That's like asking who created God or who is the bachelor married to. Don't you know that in a truly free market there is no such thing as a large and powerful corporation?



Obviously in some instances big business has benefited from their relationship to government.

Will removing government regulation give an established business even more of an edge to the detriment of new business?


Common sense says yes, but educated libertarian Austrian economists say no way. Because the market always knows never to buy from big corporations no matter what the price.



Will there need to be any kind of protection for new business during a transitional period (though it seems contrary to free markets)?


No, protection is against free market. Protection for free market is like war for peace.



Any insight would be appreciated.
I have some other questions on this topic that I'll put in another thread.

Cool.

The Northbreather
03-27-2012, 11:37 PM
Whoa I just got back. Thanks for the info. Give me a minute to take it in. :)

The Northbreather
03-28-2012, 12:31 AM
Hang on.

The Northbreather
03-28-2012, 01:17 AM
The truth is these evil "robber barons" of the late 19th and early 20th century were not so...


http://www.youtube.com/watch?v=BbIIPtLEVbA[/QUOTE]

Thanks for your insight. On the subject of robber barons, I'm not so much concerned about the 19th century fellas as I am with the modern ones.

It seems that many corporations in our current global market have a propensity to exploit less powerful countries for their labor and resources. They may in fact produce a better product at a lower price for the market to consume but it is often times at the expense of someone's liberty be it through slave wages pollution et cetera. Corporations have time and time again put their profits first while doing harm to people here at home and especially in less regulated places. This happens in high the tech manufacturing, mining and energy industries all the time.

How does the removal of regulations solve these issues especially abroad?

It seems that the removal of regulation would make some companies even bolder in their negligence.

Help me out here.

The Northbreather
03-28-2012, 01:22 AM
That's like asking who created God or who is the bachelor married to. Don't you know that in a truly free market there is no such thing as a large and powerful corporation?

I do understand that much but I also understand that right now (in reality) we don't have a free market and I'm wondering what is going to happen in the transition to one. Obviously a pure capitalist system is going to meet with stiff resistance from a corporatism.

Paul Fan
03-28-2012, 03:36 AM
If a corporation exploits people, another one will come along to produce a similar product without exploitation, and make the fact of non-exploitative production a big feature of its advertising. Then the people who dislike exploitation will have the option to buy from the second corporation. If enough do, then the first corporation will have to change or go out of business.

Paul Fan
03-28-2012, 03:41 AM
One transition idea I have is to introduce a two-tier regulatory regime: corporations can choose the existing regime, or a no-regulation, unlimited liability option. In the second option, corporations could buy insurance to cover any damage caused - or, the owners could pay from their personal pockets. I'm confident that competing insurance companies would require safe products, but with a lot less regulation than there is now.

The Northbreather
03-28-2012, 04:05 AM
If a corporation exploits people, another one will come along to produce a similar product without exploitation, and make the fact of non-exploitative production a big feature of its advertising. Then the people who dislike exploitation will have the option to buy from the second corporation. If enough do, then the first corporation will have to change or go out of business.

So we wait for something bad to happen then wait for the market to correct it after the damage has been done.

There will always been a business willing to cut corners and it seems as if many only stop when they get caught or run out of plunder.

I'd like to say that I'm a capitalist and I have not done harm to anyone that I know of. I'm a world away from a multinational business operating in a foreign land with little accountability to anyone with the power effect their behavior.

Would it be considered infringement of ones personal liberty if a company poisoned groundwater of some rural and for the most part defenseless town in Argentina?

If so how do we prevent this. Less regulation? This is an actual problem (right now).

Paul Fan
03-28-2012, 05:18 AM
Poisoning groundwater infringes the property rights of those who own the groundwater i.e the people in Argentina. It also annoys people who prefer that groundwater remain poison-free. The latter group may include some people who don't have property rights over the affected water. This subgroup can't require the property owners to prohibit poisoning ( assuming that the poison stays on the property owners' land). But this subgroup can use moral and social pressure to try to change the actions of the poisoner and poisonees (eg negative publicity, boycotts etc). This subgroup also has the option to purchase the poisoned property and then prohibit the poisoning, and sue if it doesn't stop.

NoOneButPaul
03-28-2012, 06:15 AM
When Ron Paul wins and we start the transfer to a truly free market how will new businesses compete with large and powerful corporations already in place?

Obviously in some instances big business has benefited from their relationship to government.

Will removing government regulation give an established business even more of an edge to the detriment of new business?

Will there need to be any kind of protection for new business during a transitional period (though it seems contrary to free markets)?

Any insight would be appreciated.
I have some other questions on this topic that I'll put in another thread.

Small Businesses would be positively effected right away...

Ron talks about in "The Revolution" about how most regulations that are in place today are actually there as a detriment to small business. Most regulations that are in place currently are there so the elite few can afford it and the small businesses can't. It's corporate welfare and a way to keep small business from competing.

Ron points to an example where George McGovern, after leaving politics, tried to open his own hotel and was slapped with unnecessary fire safety regulations that only the big hotels could afford... after updating his sprinkler system McGovern's project was bankrupt and went under. He had a change of heart on all the business regulations they had been putting in place during his political career.

This is merely one example... sound money also has a lot to do with it...

As the federal reserve artificially lowers the interest rates to encourage more economic activity they do so by manipulating what the state of the market actually is, by doing this SMALL BUSINESS owners are more likely to withdraw loans at lower interest rates as its supposed to be a sign of wealth buildup in the nation.

The fact is, it isn't, its the FED trying to create another bubble and after it pops, as all bubbles do, it's typically the small guys who go belly up and lose everything because the big businesses are equipped to take the brunt of the burst AND they know if worse comes to worse they can run to the government screaming about being too big to fail.

With a sound currency and less regulation the small businesses would actually be better off than they are today.

As for corporations running wild and becoming modern day robber barons... we'll they already are.

The Northbreather
03-28-2012, 12:33 PM
Poisoning groundwater infringes the property rights of those who own the groundwater i.e the people in Argentina. It also annoys people who prefer that groundwater remain poison-free. The latter group may include some people who don't have property rights over the affected water. This subgroup can't require the property owners to prohibit poisoning ( assuming that the poison stays on the property owners' land). But this subgroup can use moral and social pressure to try to change the actions of the poisoner and poisonees (eg negative publicity, boycotts etc). This subgroup also has the option to purchase the poisoned property and then prohibit the poisoning, and sue if it doesn't stop.

Ok. I'm still trying to get past the idea that less regulation will keep certain industries from doing more harm. I consider clean water a property right and so if someone damages my water I should sue them for damages.

The problem with this is that in reality it is hard for an individual to take legal action against monster corporations with huge law teams who's function is to win any dispute. Your saying that less regulation would help here?

That doesn't seem realistic to me. I'm more concerned with long term to permanent damage. Sometimes monetary rewards can't make up for permanent damages so the whole wait until it happens then sue idea really fails. Most of the time ground water contamination is a extremely long term problem once it happens. As is radiation contamination.

Don't get me wrong I'm voting No One but Ron Paul because i agree with 95% of his positions but like I said before I'm trying to reconcile this issue with myself and my family. I'm not just making up hypothetical scenarios here.

This kind of thing is happening right now in the U.S. and to more of an extent, abroad.

Is this just an area of weakness in the platform that I have to deal with?

Expert help needed.

Shredmonster
03-28-2012, 01:39 PM
What I think it is that you are not understanding the THE KIND OF REGULATION we have today. The laws and regulations are written to keep those already in power - in power and make them more rich.

The term regulation should probably be replaced cause what happens is government picks the winners based on who supports the government - military industrial complex anyone ? The government and business are in bed with each other to line their pockets. Government makes regulations for their supporters and against their detractors.

Regulations are not fair. And in many cases not only do they not protect but they have terrible effects. They are suppose to protect but they are nothing but political in nature these days.

It is like saying look where capitalism has gotten us. We have not had true capitalism for 150 years in this country due to laws and regulations written by government.

The only thing laws and regulations should do is protect the citizens from predatory practices, unfair practices etc... When you protect the environment for example you are protecting the citizens. However, when you don't allow farmers to farm due to protecting a small fish as out in CA you are hurting citizens.

Government does not protect. It punishes and stifles competition. It picks the winners. Laws and regulations are written to grow government and those who support its totalitarian agenda. I could go on and on but hopefully you get my point.

The regulations - most of them you have today - are political and made to protect government interests - not we the people.

The Northbreather
03-28-2012, 02:28 PM
What I think it is that you are not understanding the THE KIND OF REGULATION we have today. The laws and regulations are written to keep those already in power - in power and make them more rich

I completely understand that most of these huge bureaucracy's don't perform their function and usually end up doing the opposite.

So what about common resources ie rivers, groundwater....

Your saying that its the regulations that make a business have a "pollute until you get caught because its less expensive" policy and that the removal of all regulations will change the invective to put profits first at the expense of environments and peoples safety. That removal of regulation will suddenly make a business more ethical or virtuous?

Am I correct that under the libertarian view the only recourse of someone harmed by a corporation is to sue? There shouldn't be any safeguards in place? Even if that isn't the case under the current system?

Do you see what I'm getting at?

Paul Fan
03-28-2012, 03:08 PM
Class-action suit (lots of affected landowners) with a win-only fee (no worries about costs). Lawyers would be lining up to take that case! And the firms would know that lawsuit would come - and so would their insurers - so the firms wouldn't take the actions that would allow the lawsuit, and even if the firms wanted to, their insurers wouldn't cover them for it, so the firms wouldn't want to take an uninsured action, so the action wouldn't happen.

Paul Fan
03-28-2012, 03:16 PM
One other point: regulations don't actually prevent harmful actions. They just set out the penalty that may be imposed. So they are no more preventive than the possibility of a lawsuit. Inspections by governmental entities might help reduce damage; but so would inspections on behalf of insurance companies. Insurance companies often impose tighter rules than governments!

The Northbreather
03-28-2012, 04:02 PM
So what I'm understanding is that a change to a more Libertarian government will probably result in a generally worse environmental impact at least at first. Is this true for the most part?

I'm not trying to bait anyone here and I appreciate all the input on the subject. If need be we could take this conversation private.

Paul Fan
03-29-2012, 08:04 AM
A more libertarian government would result in the immediate improvement of the environment, because companies wouldn't have a 'license to pollute' from the government, and they wouldn't be able to get insurance that allowed them to pollute, and they wouldn't want to risk the bankrupty that would happen if they polluted and then got sued.

Maybe you should read some more theory; it sounds like I'm not getting through.