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by schubidubiduba 67 days ago
Some markets just inherently turn non-free very quickly when left unsupervised. Especially infrastructure markets.
2 comments

Most markets inherently turn non-free when left unsupervised. That's the insight that folks like Keynes came to (as does any honest, informed observer with two or more functioning brain cells). That's why anti-trust and competition-preserving regulators and laws are essential. Without them, a very few powerful players form [0] cartels and/or tri/du/monopolies and enrich themselves vastly out of proportion with the value that they provide to their customers.

[0] ...often legally protected...

There won’t be anti-trust as long as elections can be bought and there’s a revolving door between regulators and industry. We need a firewall to separate capital and state.
Yep. But everyone's realized this ship has sailed in the US right? Regulatory capture is complete.
No they don’t. What happens is that people want to manipulate the market for a variety of reasons, so they do that, and then really really smart people come along later and try to claim that those manipulators weren’t actually the problem but the solution! It is completely backwards, like reversing cause and effect. It’s like blaming a person for standing in the path of a bullet instead of the one firing the gun.

Want a free market? Stop messing with it.

> No they don’t.

Yes, they do. Price competition and R&D are expensive activities. Businesses seek to maximize profit, as they're not charities or governmental entities. Neutralizing competition (whether by eliminating it or colluding with it) and entering into private agreements with suppliers and vendors to box out any potential upstarts increases profit. Another fine way for a monopoly or cartel to increase profit is to make their product cheaper to produce by adulterating it with inferior ingredients, but mislead customers about the fact of the quality loss, the reason for the quality loss, or both.

The natural stable state of a profit-seeking business is the establishment of a monopoly or cartel. You get the most profit when there is neither a need to compete on price nor a need to expend resources on improving one's product.

That isn’t really true though, monopolies are not sustainable. Pretty much the only way to create a long lived monopoly is to collude with the government (also a monopoly btw).
> ...monopolies are not sustainable.

You might be surprised to learn that the private sector can enter into durable agreements much like the public sector does. It's how things like mon/oligopolies and cartels form and persist.

Anyway. I'd suggest you go read your histories, but you're either unlikely to, or don't have enough supporting information to understand what they're telling you. If you're young enough [0] to be alive thirty to sixty years from now, and you're living in a place -like the US- that's steadily dismantling its consumer protection regulations, then do pay attention to how things have changed between now and near to the end of your life. Take especial care to track down the root causes of the differences, rather than just uncritically swallowing whatever explanations you're handed.

[0] ...and lucky enough...

That may or may not be true, but in this case many cities signed exclusivity agreements with cable companies in the 60s and 70s when cable was becoming popular. Back then it was not technically feasible to have multiple cable companies sharing the same cable; the same set of analog channels had to be broadcast to every subscriber. Multiple subscribers, often hundreds of them in apartments, were attached to the same run of coaxial cable in a daisy chain or using splitters. Those agreements carried over to internet service once the cable companies started offering it. It made sense 50 years ago, but today it means that we haven’t actually had much of a free market. Now the FTTH is cheap and readily available, that is starting to reverse simple because the monopoly agreements only apply to _cable_ networks, not to fiber networks.