Originally Posted by
osan
All of the micro economic models and their attendant calculations I was taught do very much indeed take innovation into account, which is expressed as part of the cost function.
I don't think the derivative of 1-Q**2 = 1-2Q. Rather, it is simply 2Q. Constants have no derivative. That is why when you are integrating f(x) over some interval, the result includes a constant, usu. denoted 'C', which is more or less the y-offset of the function.
But they always do "bad" things, if they are not regulated otherwise. But the regulation also is a bad thing. Therefore, for my money monopolies are generally deleterious to the economy. I do not advocate banning by force, but do object to state-granted privilege of monopoly.
The deadweight losses to the consumer cannot be avoided without regulation when we are talking of a monopoly operating in its rational self-interest. In this respect, the only thing innovation does is reduce the value of the cost function. But cost remains and the rationally operated monopoly will still operate as a detriment to consumers. The monopoly, if rational, is not going to operate as if there was competition. If they do behave, then they are not rational. It is a simple matter of definitions.
I thought it was fairly clear. Proper accountability for one's actions v. the nonsense that is enforced by "law" would result in a happier, saner world. We now employ force against people for non-criminal acts. Guy buys a hooker and ends up in jail. Lady lights a joint, jail. Fail to pay taxes - jail. And so forth.
One either has free markets or has something else. If costs are such a hazard, then perhaps there is no actual and free market for the product or service in question. If there is a real market, customers will accept the costs. It is as simple as that. BTW, the BI case, as well as others such as Socony and Applalachian coal, are absolute cluster copulations WRT price fixing, with all manner of nonsense about the rules not applying literally.
No. Anti-trust laws are superfluous - redundant, and in the case of real US antitrust, not to be... erm... trusted.
If that is the case then I might agree especially with Price fixing issues. This is something that may not be evident at all to the consumer without these laws.
Your point is well taken, but I would maintain that tort is the answer. That tort may place a burden upon juries... well, tough poo. But I certainly get your point and understand that such a situation could lead to all manner of miscarriages of just equity verdicts and rulings. But the question then arises: would specific and presumably competent anti-trust law fix this potential problem? It just appears to me that in this case anti-trust law would constitute a very narrow and deep branch of tort law, put in place because of the great technical difficulties such cases may at times present.
The better solution, in my eyes, is to remove all restrictions on monopolies and oligopolies. Let them collude all they want, but under certain conditions. Firstly they cannot conspire to bar competition. Secondly, there would be no more state-endowed privileges of monopoly. Power companies and the sort would be stuck with "perfect" competition. If you can maintain your monopoly, then goody for you. But if you cannot, do not look to government to pull your bacon from the fire. With this, all rights of way become public domain and must be shared.... utility and phone poles, for example. That could get messy, but if the problems become bad enough, let the players innovate their ways out of them. That is the right way to do things. The current way is lazy or it is the result of wanting something for nothing - like guaranteed market.
We have all the mechanisms we need - we just need to use them properly. If I design the Ford Pinto and market it knowing that in certain types of impacts the gas tank will explode and the passengers turned to crispy critters, I am CRIMINALLY liable for such death and injury. The excuse Ford officials made about the $11 additional cost for putting in a proper tank should cut no mustard and, in fact, should serve as proof of criminality. Those responsible should see prison time and the company required to pay for what they have done.
If indeed the cost increase would have eaten heavily into the market for the Pinto, then perhaps Ford would have been well served to re-examine that market and possibly decide that it simply did not pay to go there.
Most of these issues really do boil down to simple answers. What complicates things most are the conflicting interests. Ford wanted the extra market share and were willing to see a certain number of their customers burn to death or be horribly maimed by their failed products in order to get it. I would call that malice aforethought. They knew, they did anyway... what part of that is not felonious and deserving of a life sentence?
Had they not known and could not have reasonably become aware, they would then only be liable for the tort in $-terms. Had they now known and should have known as per the reasonable man standard, perhaps a lighter criminal sentence would be in order.
The point is that the mechanisms are there. Congress and other legislatures are far too fond of complicating things with endless pages of redundant, conflicting, and outright stupid statutory enactments.
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