[CPops]

"Antitrust law provides some interesting insight into the question IMO. It was established because laissez faire economics failed to prevent monopolies."

This is obviously false, both from a logical and historical view.

A monopoly cannot exist in a free market as no company, no matter how successful, can actually restrict entry into any given market without the government banning entry into that market. This is accomplished though various legal means including licenses, trade barriers, so-called "intellectual property" protections, and other tactics. Without the barriers for entry into any market provided by government, establishment of a monopoly on any desired service would be impossible.

Now, you might cite some historical examples like Standard Oil and the like as examples of why monopoly protections are needed, but this standard example only illustrates my case. The price of a gallon of oil, for example, was around 30 cents in 1870 and fell to around 6 cents at the time of the anti-trust trial. And their market share was continuously dropping despite their supposed monopoly.

[jokermatt999]

So I take it you don't believe in natural monopolies?

[doyoulikeworms]

I'm not going to speak for him, but I sense that he does "believe" in natural monopolies. He also probably feels like there's nothing /wrong/ with natural monopolies, and I'd have to agree.

A natural monopoly can and ought to be defined as an entity with monopolistic market share achieved WITHOUT government regulation, subsidies, and the like, AND WITHOUT the illegal use of physical violence.

[dpatru]

In a free market, productivity tends to rise and prices tend to fall. Market leaders, in order to maintain their leadership, must constantly work to stay ahead of their competition.

This is a good rule of thumb to determine whether a market is free. So, for example, in the US, the high tech hardware and software markets are free (prices are continuously dropping) while the higher education market is not (prices go up every year.)

[Andrew_Quentin]

Why use Standard Oil and not say Google or even Facebook? Google has a massive share of search. Not because of any barriers to entry, but, because, well, they, had a great idea and it worked.

It is unlikely that google would loose such position until there is an advance or breakthrough. Until then, google can do quite a lot and pretty much whatever it likes if there were no laws constraining it.

[OpieCunningham]

Not sure why you were down voted on that. You're correct in my view that laissez faire economics doesn't promote monopolies. There are other reasons laissez faire economics is a poor economic model, such as safety.

[m_myers]

I would argue that safety regulations are not at odds with the laissez-faire model. Laissez-faire is not the same as anarchy; injuring another person -- including through faulty products or workplace hazards -- should still be punishable.

[fexl]

Also, on the subject of safety in the free market, think Underwriters Laboratory and Consumer Reports. People don't want coffee makers that burst into flames or cars that roll over.

[krakensden]

Underwriters Laboratory and Consumer Reports seem like special cases. Don't most private quality control organizations go the way of Yelp, the BBB, the BSA, etc- questionable ratings and bad economic incentives?

[fexl]

I'll go ahead and add Standard and Poor's, Moody's, the SEC, and the FDA to your list of bad examples, since poor quality and bad incentives can arise with either voluntary or coerced funding. But at least with voluntary funding you can take your business elsewhere, or even compete.

[OpieCunningham]

Punishable by what? The slow dissemination of information resulting in markets driving down the viability of a company that produced a faulty product? How many injuries are necessary before that information hits a critical mass?

Let's take one specific example, though the principle can be applied to most industries: child car seats. Presently, govt regulations require very specific quality and manufacturing standards and thorough testing before a child safety seat can be sold on the market. Without those regulations in place, how man children need to die before third party organizations can disseminate product failure information wide enough that the responsible company suffers the consequences?