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by api
1777 days ago
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I've come to believe that the most important quality of capitalism isn't markets or some super-human intelligence that markets somehow possess, but simply the ability to bypass stagnant incumbents, entrenched interests, and bureaucracies. In other words the most critical quality is permission-free innovation. In all other systems from feudalism to socialism to communism there generally is just one department or agency responsible for each thing, and it's usually either the state itself or some state-blessed entity with an enforced monopoly. If that entity does it's job well, that's great. If it doesn't, tough shit. Nobody can go around it. This is also why I disagree with market purists about anti-trust. If a private company gets so huge that it is able to occupy an entire market niche for a prolonged period of time, it's important to do something to either break it up or incentivize other entrants. A private company allowed to remain super-dominant in one sector for too long starts to look and behave like a Soviet bureau. |
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I would say that if a private company gets so huge and can control an entire market niche for a prolonged period of time, they will inevitably stagnate which leaves them open to competition. The biggest problem issue for such private companies is not that they can control entire market segments but that they can lobby the government for regulations that permanently entrench themselves by making competition illegal in some way. The regulations are almost always done in the name of safety (if we don't regulate this then new unsafe entrants who don't follow all our internal practices could enter the industry and kill people). So they get government regulations created that exactly follow the company's own internal regulations. That both accelerates the company toward stagnation (they can no longer update the regulations) and also puts up walls for new competition as the new entrants can't innovate if they have to follow all the legacy processes.
That further gets trade unions/teamsters involved who learned to follow those regulations in trades schools and further act to restrict any improvement as it would kill their jobs.
Them being a monopoly in and of itself is not a problem, as long as we can prevent them from putting up barriers that would protect themselves from competition once they stagnate.