Income Inequality Questions
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2013 Sep 24, 2:28am 56,199 views 226 comments
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Dan8267
2013 Oct 30, 9:57am
The "Game Theory" that you refer to explicitly postulates repeating game involving the same set of players in a non-changing market.
No. Not at all. The branch of mathematics known as game theory most certainly handles problems involving dynamic systems.
In any case, you haven't refuted the point that "Corporations will inevitably create monopolies and oligopolies through mergers unless prevented by government." This point is also empirically true. History proves it. It is a matter of written fact regardless of whether or not you accept any theory explaining why it is so. To argue otherwise is to argue that there is no water on the planet Earth. It is demonstrably false.
It's not just corporations that want to maximize profits; individuals too! A big part of maximizing profit is reducing expenses, which means reducing someone else' profit.
And what is good for the individual can be devastating for society as a whole resulting in worse conditions for everyone including the individual who is maximizing his own self-interest. This is the very definition of a dilemma.
According to capitalist theory, a capitalist economy should work like this. An inefficiency exists in some market. An entrepreneur notices this inefficiency, creates a more efficient way of satisfying the market, reaps a profit from the efficiency gap between his solution and the current market solution, the market adjusts, the profits the entrepreneur has been making falls to zero, the entrepreneur can no longer collect rent on his solution and has to find another inefficiency in some market to correct.
If capitalism worked as it is supposed to, then all economic (not normal) profit in any enterprise should rapidly fall to zero no matter how high it starts. And this should be a good thing, one that everyone wants because it means there is no waste, no misallocation of resources.
However, the reality is that so-called capitalists don't want that and prevent that scenario from playing out. Capitalists want inefficiency and waste in the economy because that is the only way for economic profits and rent collection to take place. A fully efficient market, by definition, has no opportunity for economic profit. It is precisely through creating and exploiting waste that the financial parasites like those in Goldman Sachs obtain their wealth. But doing so only works as a zero-sum game.
Dan8267
2013 Oct 30, 9:59am
Whereas in a government controlled economy, the bureaucrats also want to maximize their own personal profits
Unrestrained "American style capitalism" and Soviet Communism are exactly the same thing. The only difference is if you call the central dictatorship controlling everything a "government" or a "corporation". Of course, the name you give that dictatorship does not change its nature.
No. Not at all. The branch of mathematics known as game theory most certainly
handles problems involving dynamic systems.
Go back and read your game theory again. Pay attention to the pre-conditions of the model.
In any case, you haven't refuted the point that "Corporations will inevitably
create monopolies and oligopolies through mergers unless prevented by
government." This point is also empirically true. History proves it. It is a
matter of written fact regardless of whether or not you accept any theory
explaining why it is so. To argue otherwise is to argue that there is no water
on the planet Earth. It is demonstrably false
Utter nonsense. Give me a monopoly or oligopoly, and I will show you the government role in its creation. Mergers do not translate into monopoly or oligopoly, and are usually failures in growth industries. Mature industries are just something that is ready to be displaced by new industries, absent government regulations barring new entry.
And what is good for the individual can be devastating for society as a whole
resulting in worse conditions for everyone including the individual who is
maximizing his own self-interest. This is the very definition of a dilemma.
You are defining own stuff in self-contradictory terms, but in any case I get what you are trying to say . . . here's the key: so why would you want to entrust any particular individual with the privilege of nobody else being able to say "no" to him? You are recognizing monopoly is bad on one hand, yet advocating monopoly by government bureaucrat is good on the other. Do you think people become selfless gods when they put on the robes of a bureaucrat? Is that your religion?
If capitalism worked as it is supposed to, then all economic (not normal)
profit in any enterprise should rapidly fall to zero no matter how high it
starts. And this should be a good thing, one that everyone wants because it
means there is no waste, no misallocation of resources.
That's not true. Information propagation takes time. Some people actively reject good information for a long time, like you are doing now, wasting electricity repeating magic theory that's been proven false over and over again. Free market is a information distribution system, just like a bureaucracy is. Free market just happens to be more efficient than bureaucracy in distributing new information, rewarding those adjusting to new reality quickly, instead of rewarding the "yes men" playing to some pre-established template that has long been obsolete.
However, the reality is that so-called capitalists don't want that and
prevent that scenario from playing out. Capitalists want inefficiency and waste
in the economy because that is the only way for economic profits and rent
collection to take place. A fully efficient market, by definition, has no
opportunity for economic profit. It is precisely through creating and exploiting
waste that the financial parasites like those in Goldman Sachs obtain their
wealth. But doing so only works as a zero-sum game.
In case you did not realize, Goldman Sachs works in a central banking bureaucracy system. GS churns out bureaucrats that head central banks of the world. Creating inefficiency is what the bureaucracy is good at, as the consumers are not allowed to say no to the bureaucracy, at gun point. In a free market, consumers, that means you and me, would be shopping elsewhere.
Unrestrained "American style capitalism" and Soviet Communism are exactly the
same thing. The only difference is if you call the central dictatorship
controlling everything a "government" or a "corporation". Of course, the name
you give that dictatorship does not change its nature.
Nonsense. What you are seeing now is not "unrestrained American Style Capitalism." You see what you see as comparable to the soviet system because central banking is one of the 10 planks of the Communist Manifesto of 1848 (Plank #5 to be specific). It is not co-incidence. At the macro level for money and banking in the US, you are indeed looking at a soviet-like system. At the height of soviet power, they believed with new-found computers they can precisely calculate the price for every single product ever known to men. That's what believers in central banking believes regarding the price of money.
Dan8267
2013 Oct 30, 5:56pm
No. Not at all. The branch of mathematics known as game theory most certainly
handles problems involving dynamic systems.Go back and read your game theory again. Pay attention to the pre-conditions of the model.
So you are saying that the entire branch of mathematics known as Game Theory is based on one and only one specific model with a static set of pre-conditions. What the fuck are you talking about?
That's like saying there exists one and only one derivative in Calculus, one and only one polynomial in Algebra, and one and only one summation in arithmetic. Yes, you can add 2 and 3, but not 5 and 7. Arithmetic only supports adding 2 to 3.
Give me a monopoly or oligopoly, and I will show you the government role in its creation.
Viacom
Mergers do not translate into monopoly or oligopoly, and are usually failures in growth industries.
Mergers have been standard operating procedure since Reagan killed anti-trust enforcement.
The entire so-called basis of capitalism theory is competition. Mergers, by definition, are antithetical to competition and thus have no place in an economy that allegedly follows capitalistic theory.
Companies are suppose to crush their enemies, not join them.
You are recognizing monopoly is bad on one hand, yet advocating monopoly by government bureaucrat is good on the other. Do you think people become selfless gods when they put on the robes of a bureaucrat? Is that your religion?
Like a typical American, you are assuming that because I reject your position I must be taking the stereotypical opposite position. If I reject the nonsense of the right, I must accept the nonsense of the left. If I acknowledge that completely unregulated capitalism is harmful and wasteful, then I must be a Communist or a socialist and believe that government can do no wrong.
This is a false dichotomy. The truth is orthogonal to the left-right line. I can reject two opposing thesis and propose a third option that is like neither. In fact, I could propose an infinite number of alternatives arrange in all directions in a many-dimensional problem space. It is your false assumption that all of economics and politics is represented by a one-dimensional line with coordinates to the left and coordinates to the right. I think in much higher dimensions; many more degrees of freedom.
And it is because you unquestioningly accept this false dichotomy as the only possible truth, that you must misinterpret my position. You can tell that my position is not the same as yours, but you wrongly assume that therefore my position must be on the other side of this one dimensional line you think is the universe. My position is nowhere near that line.
My "religion" is the lack of religion. Economic systems are like underwear, you change them whenever you need to. There is no "best" economic system. There is only one or more best systems for a particular set of priorities, constraints, and environment. For example, an autonomous science lab that must perform resource management (mining, extracting chemicals), run scientific tests in a variety of fields, and self-repair would best be ran as a Communistic model rather than a Feudal or Capitalistic model. The economy would not even involve human beings, but would be an economy nonetheless and subject to the same engineering discipline.
The bottom line is that in order to understand anything I'm saying, you'd need to abandon your paradigm and you don't seem ready to do that yet. Perhaps in time you will be able to do that. I'd suggest coming back and reading my posts again when that time comes and you'll have an ah-ha moment when everything clicks. Until then, explaining my economic philosophies would be like trying to explain cloud computing to a Medieval farmer.
tatupu70
2013 Oct 30, 9:30pm
You are just dodging the question. Thanks for trying to side-track the discussion yet again.
You're asking me the definition of "believe" and I'm sidetracking the discussion? OK then.
What do you think the real productivity per person per hour would be if those "jobs" are taken into account? Yet it is this more comprehensive average that the people really feel about the economy. Those without official jobs are people too! BLS seems to think they cease to be part of the economy and cease to be living human beings.
So what? I'm not arguing the advantages or disadvantages of the BLS measurment of productivity. Just that you don't know the definition.
So you are saying that the entire branch of mathematics known as Game Theory
is based on one and only one specific model with a static set of pre-conditions.
What the fuck are you talking about?
You were talking about one specific game theory scenario: repeat games. That's when the players have an interest to collude. Otherwise, basic game theory would dictate "Prisoner's delimma": under cut the prices of your competitors to get their business before they do it to you!
"Game theory" may be a fancy new term for you . . . whereas for me it's no more complicated than walking and chewing gums at the same time. I did actually study economics in the same Institute that many of the world's top central bankers went to.
Give me a monopoly or oligopoly, and I will show you the government role in
its creation.
Viacom
What do you have against Viacom? It's not even as big as Disney, Time Warner or Fox/Newscorps. At less than 10% market share in most of its markets, Viacom is certainly not a monopoly or oligopoly, more like an underdog, albeit a relatively big underdog but still an underdog compared to the other big-3 mentioned above.
Mergers have been standard operating procedure since Reagan killed anti-trust
enforcement.
Mergers were taking place long before Reagan. Government anti-trust boondoggle has been taking place long after Reagan.
The entire so-called basis of capitalism theory is competition.
No. It's about freedom of choice. Competition is only a result of consumers having freedom of choice.
Mergers, by
definition, are antithetical to competition and thus have no place in an economy
that allegedly follows capitalistic theory.
Your "theories" don't meet the simplest reality test: if merger is not allowed, then resources (including labor) under the control of losing companies would have to wait till bankruptcy to be recycled! Even then buying from the bankruptcy court would still be Merger & Aquisition. Get to know your "theory" and its implications before pronouncing them.
Like a typical American, you are assuming that because I reject your position
I must be taking the stereotypical opposite position. If I reject the nonsense
of the right, I must accept the nonsense of the left. If I acknowledge that
completely unregulated capitalism is harmful and wasteful, then I must be a
Communist or a socialist and believe that government can do no wrong.
This is a false dichotomy. The truth is orthogonal to the left-right
line.
You are thoroughly mistaken if you think I'm somehow right-wing. On the Nolan chart, my position would be near the top of the chart, for liberty. It is indeed not a one-dimensinonal line. Unfortunately, I get a vague sense that your various positions are rather located near the bottom of Nolan chart, slightly to the left, like the late 18th century French revolutionary youth.
My "religion" is the lack of religion.
Just like the late 18th century French revolutionary youths, quite adament about replacing old religion with a new religion centered on the god-like power of the government . . . also "convert or die!" LOL. It took Europe several hundred years to become mellow on religious conflicts, then the religion of the modern state re-infuses the bloodlust into a new crop of zealots, giving yet another lease to the State. Violent coercion is the life of government.
For example, an autonomous science lab that must perform resource management
(mining, extracting chemicals), run scientific tests in a variety of fields, and
self-repair would best be ran as a Communistic model rather than a Feudal or
Capitalistic model. The economy would not even involve human beings, but would
be an economy nonetheless and subject to the same engineering discipline.
It is the same "clockwork universe" utopia that the original Utopian Socialist of the 18th century France like Fourier embraced. You do realize, in such a machine-run universe of the future, there would be no place for human beings except for perhaps being pets. Until that end-state (really death and extinction for humanity) arrives, the utopists would just run the society as if they were the omniscient and omnipotent macine-god, treating everyone else as mindless cogs in the machine. This whole utopian theory is really quite dehumanizing. "Utopian Socialism/Communism" is really little more than a death cult for wannabe slave masters.
Unfortunately for those utopists, and fortunately for humanity, human beings are born with a yearning for freedom and liberty.
You're asking me the definition of "believe" and I'm sidetracking the
discussion? OK then.
You side tracked the discussion by asking me if I "believed" in the Constitution. Of course I had to ask what you meant by "believe"; as Benjamin Franklin put it when asked what they had accompolished there at the Philadelphia Convention (where the Constitution was drafted):"A Republic, if they can keep it!" Obviously faith in paper itself did not register high even for old Benjamin.
So what? I'm not arguing the advantages or disadvantages of the BLS measurment of productivity. Just that you don't know the definition.
B*llsh*t. Not even BLS claims they invented or defined "productivity." BLS coined the term "Labor Productivity," which has nothing to do with what I was talking about. You are just an ignoramous enamored by a few technical terms that you do not understand. Here is the hint: when you are faced with a new technical terms, best not try to interpret it on face value, but try to figure out what the implications and limitations of the underlying model are.
tatupu70
2013 Oct 31, 1:25am
You side tracked the discussion by asking me if I "believed" in the Constitution. Of course I had to ask what you meant by "believe"; as Benjamin Franklin put it when asked what they had accompolished there at the Philadelphia Convention (where the Constitution was drafted):"A Republic, if they can keep it!" Obviously faith in paper itself did not register high even for old Benjamin
It was meant as a joke. You've now wasted a half dozen posts on it.
B*llsh*t. Not even BLS claims they invented or defined "productivity." BLS coined the term "Labor Productivity," which has nothing to do with what I was talking about. You are just an ignoramous enamored by a few technical terms that you do not understand. Here is the hint: when you are faced with a new technical terms, best not try to interpret it on face value, but try to figure out what the implications and limitations of the underlying model are.
I do understand the term--it's pretty basic. It measures output/input. You can use hours, capital, land, among many things for the denominator. What you can't do is define it as ouput.
You can try to weasel your way out of it as much as you want, but you look like a fool. You were wrong. Own it.
Dan8267
2013 Oct 31, 2:25am
You are thoroughly mistaken if you think I'm somehow right-wing.
My point was that you were assuming that if I don't agree with you the only alternative position I could take is your polar opposite. More specifically, if I do not think government is the cause of the problem, I must think it is the solution. That assumption is wrong.
Just like the late 18th century French revolutionary youths, quite adament about replacing old religion with a new religion centered on the god-like power of the government
And the above statement perfectly illustrates the false dichotomy you are assuming.
No I wasn't. You are trying to force my ideas into your paradigm. That's
simply not possible. In order to understand what I'm saying, you have to discard
your worldview and, at least temporarily, accept a larger and more flexible
one.
As long as you view things through the prism of contemporary American
polarized politics where there are two and only two camps (the left and the
right), you cannot understand what I'm saying because it simply does not fit
into that line.
"Repeat Games" is a classical Game Theory model. It has nothing to do with political left or right. You brought up Game Theory, I assumed you understood what the basic models are in that theory. Perhaps I'm mistaken.
I do have an open mind, but not an empty one :-)
freak80
2013 Oct 31, 3:29am
Patrick:
In addition to the "best of" tab, we need a "dumbest comments" tab.
Give me a monopoly or oligopoly, and I will show you the government role in its creation.
Nominated.
Mergers do not translate into monopoly or oligopoly
Nominated.
Standard Oil was not a monopoly.
Nominated.
Monopolies by definition are created by government otherwise they ain't monopolies.
Nominated.
But a monopoly only exists by government decree.
Nominated.
Standard Oil was not a monopoly.
Nominated.
Standard Oil had little price setting power when it was offering the lowest price)
Wasn't the purpose of the low price to prevent small start ups from entering the business profitably so as to compete ? Left alone, Standard could become like a single utility company controlling nearly all oil production and sales. At that point they would have price setting power in the extreme.
To argue that Viacom, a company which owns so much, isn't an oligopoly at the
least is ridiculous. That there are "bigger" companies in the oligopoly of media
also does not contradict the point that corporations naturally form oligopolies
and monopolies; in fact, it reinforces the fact.
Monopoly and Oligopoly refer to price setting power. Viacom and many other media entities had many subdivisions both due to legal protection from lawsuits and business history in the media industry: most media ventures fail financially after initial success becfause people's taste change over time. Having many subdivisions is not a sign of monopoly or oligopoly. Citing Viacom is all the more specious, as it is the underdog compared to Disney, which has a huge presence in your own home state.
Do you really believe that corporations want competition and seek it out and
lobby Congress to increase how much competition they have for the benefit of the
consumer?
So what? Of course corporations subjectively prefer less competition? Do you want more competition for your job? Of course not, shall we ban software programming then? Every single market participant subjectively prefer less competition. Heck, you probably want less competition when you buy house, buy car, or even going through the checkout line at the grocery store! Heck you even wanted to lobby Congress ban programmers from India. In the interest of American consumers of software, shall we then ban all domestic programmers who want to ban software programme supply and artificially jack up their wages and the cost of software? Perhaps we should, but why should those programmers not engaged in those lobbying be tarred with the same brush like you are tarring all corporations, most of which are not into lobbying.
Have you seen the laws handed to senators by lobbyists? They are all
design to cut competition and ensure that the company writing the law has an
unjust and unassailable advantage in a market. Do I really have to prove this to
you? And is it not obvious that greed would motivate people to seek such
advantages?
Then the problem is with the political power wielded by the government to restrict choice available to consumers. Of course some corporation owners in their self interest would lobby to exercise that power . . . just like you advocated banning Indian programmers.
I'm the most liberal person on this website by far. I believe that people
have a human right to clone themselves as their reproductive choice, that there
should be no laws prohibiting nudity anywhere including courts.
I believe that people have the absolute right of freedom of speech (not
including threats, liable, and false reports of emergencies only) without fear
of government reprisal; for example, you should be able to call a judge a
"fucking asshole" to his face in a trial and not be held in contempt of court
and if the judge cannot objectively handle it, he should be recused from the
trial.
I believe it is your Constitutional right to walk up to any cop and wave your
dick in his face in protest while smoking pot and wiping your ass with the
American flag. That's how fucking liberal I am. So I'm certainly not one that
would advocate any kind of slave-like oppression of people.
None of it would matter for the average Joe and Jane if he/she is taxed to such a degree that he/she can not afford to clone him/herself, buy a megaphone, or get him/herself published. Would matter even less if Joe and Jane have to stay on good behavior if not outright kissing the jackboots in order to have his/her meal ticket stamped, government insurance validated, to drive, to walk the street, etc. etc.
Standard Oil had little price setting power when it was offering the lowest price)
Wasn't the purpose of the low price to prevent small start ups from entering the business profitably so as to compete ? Left alone, Standard could become like a single utility company controlling nearly all oil production and sales. At that point they would have price setting power in the extreme.
That Pinky-and-Brain dream of taking over the world was already proven impossible before the government broke up Standard Oil. Standard Oil market share was already declining in the US due to competitors copying its efficient refinery practices (Standard Oil never had a stranglehold on wells and crude production, not even allegedly); worldwide, Standard Oil market share was rapidly declining before the breakup due to German chemical giants refining eastern europe crude oil.
The Morgan sponsored scribes made up a lot of sensationalistic stories about Standard Oil. In reality, Standard was simply an efficient producer like a modern automibile moving into what had been wasteful horsecab mom and pop shops. Before Standard Oil, the bulk of crude feed stock was thrown away in Kerosene production.
MisdemeanorRebel
2013 Oct 31, 4:00am
Calling long distance with AT&T was cheaper in the 80s than in the 90s, right?
Calling long distance with AT&T was cheaper in the 80s than in the 90s, right?
The AT&T monopoly was a classic case of government regulation creating monopoly. Remember the great goverment plan to wire up all rural America while putting a price cap on how much companies can charge on calls originating from there? Guess who headed the committee to regulate that price and wiring? The Boss of AT&T! Many states even banned competing telephone lines being installed, so the allged "natural monopoly" could be maintained!
freak80
2013 Oct 31, 4:17am
Yes, some utilities were government-regulated monopolies.
But it's ridiculous to assert that monopolies are impossible w/o government intervention. The trusts of the late 19th century are a classic example. They are proof that unregulated capitalism leads to monopolies and trusts. It took government intervention to "bust" the trusts.
"Reality" is using the debate tactic known as the "Gish Gallop." That is, throwing out so much bullshit in so little time that it's impossible for anyone to refute every single point in real time. He just keeps repeating the same PRATTs over and over again, hoping that some of the bullshit will "stick."
Yes, some utilities were government-regulated monopolies.
Try "practically all of them whenever a monopoly was established"
But it's ridiculous to assert that monopolies are impossible w/o government
intervention. The trusts of the late 19th century are a classic example.
Like which one? Be specific. Which "trusts"?
They
are proof that unregulated capitalism leads to monopolies and trusts. It took
government intervention to "bust" the trusts.
What is this "they" that you are talking about? Give a couple examples. Some others already tried: Standard Oil and AT&T; the former was not a monopoly but only called a monopoly by the government, the latter was put into monopolistic power by the government in the 20th century.
Standard Oil kerosene price was undercutting the production cost OF ITS
COMPETITORS! That's because Standard Oil was a much more efficient refiner than
its competitors before the latter copied its practice. Standard Oil was pulling
out gasoline, diesel, lubricants, vaseline and wax to sell, all at high premium
because of lack of competition; of course that meant it could sell Kerosene at
low price
Like usual, you bring your chart to prove your own ignorance. The rapidly
rising profit at Standard Oil was indicative of its high efficiency, not
deliberate price war loss leading.
Golly, I can barely spell Game Theory but wouldn't a steeper slope for the growth of assets vs. earnings indicate falling margins?
Golly, I can barely spell Game Theory but wouldn't a steeper slope for the
growth of assets vs. earnings indicate falling margins?
Falling margins reflecting both competitive pressure as well as capital amortization (i.e. profit decline only in the accounting sense).
Dan8267
2013 Oct 31, 5:08am
Citing Viacom is all the more specious, as it is the underdog compared to Disney,
I think you and I have very different perspectives on Viacom and the other big media companies. Too me, this looks like an oligopoly possibly headed towards a monopoly.
And I think this oligopoly was established intentionally by corporations seeking to cut down markets not by government socialistic policy.
Government's role in establishing this oligopoly has been in abandoning anti-trust law enforcement. Prior to Reagan, corporate mergers involving major telecommunication or media companies were unheard of. The government simply didn't allow large companies in the same industry to merge. After Reagan, mergers have become so normal they are expected and demanded by share holders to make quick profits.
Falling margins reflecting both competitive pressure
hmm..page 3 seems to contradict this - shows falling margins up to 1895. Standard controlled 70% of refining capacity and 91% of production through 1904, after which you could argue competitive pressure.
http://www.ewi-ssl.pitt.edu/econ/files/courses/110908_misc_industrialtrustsgraphs.pdf
What I'm saying is Standard's margins (refined-crude) fell while they were gaining larger and larger market share through 1895. Seems to me exactly was you'd expect from predatory pricing.
capital amortization (i.e. profit decline only in the accounting sense).
Thats a stretch. Do you have any support for that? The chart could easily represent EBITDA as earnings.
I think you and I have very different perspectives on Viacom and the other
big media companies. Too me, this
looks like an oligopoly possibly headed towards a monopoly.
Do you not realize the role of government licensing in maintaining media oligopoly? Some local media markets can indeed be described as approaching oligopoly, largely as result of licensing requirement and regulation. There is no media oligopoly emerging for online media for example, for now anyway before government gets its sticky hand on the internet.
And I think this oligopoly was established intentionally by corporations
seeking to cut down markets not by government socialistic policy.
Of course it's created by government socialistic policies to cut down market freedom. Everyone can dream about monopolistic or oligopolistic pricing power . . . only government regulations can enforce it and prevent someone else to jump in and take the customers from the monopolists and oligopolists. Even you realize only the government can stop Indian software programmers come here to take your lunch when the customers are looking for less expensive software.
Government's role in establishing this oligopoly has been in abandoning
anti-trust law enforcement.
No. The government role in establishing monopoly and oligopoly is in establishing barriers to entry.
Prior to Reagan, corporate mergers involving major
telecommunication or media companies were unheard of. The government simply
didn't allow large companies in the same industry to merge. After Reagan,
mergers have become so normal they are expected and demanded by share holders to
make quick profits.
That's ridiculous. Governments at the federal, state and local levels were instrumental in the creation of the AT&T monopoly since circa 1918, with tax on urban calls to pay AT&T to build rural network and prevent rural networks charging high rate that would attract competitors. That's how governments install monopolies: by trying to pretend "doing good" while channel wealth to cronies, counting on morons and simpletons to cheer along the way to their own financial destruction.
Early in Reagan terms saw the break-up of AT&T. Before the break up, AT&T was wired telephone service; there wasn't much to merge since the 1920's. After the break-up, there were more than one major company in the field, so mergers became possible.
hmm..page 3 seems to contradict this - shows falling margins up to 1895.
Standard controlled 70% of refining capacity and 91% of production through 1904,
after which you could argue competitive pressure.
Oil industry only emerged around the time when Standard Oil was founded in the 1860's. Margin compression was normal for a new industry as it expands to economy of scale and reaching more and more customers over its first 30 years. Witness the personal computer industry from 1975 to 2005.
What I'm saying is Standard's margins (refined-crude) fell while they were
gaining larger and larger market share through 1895. Seems to me exactly was
you'd expect from predatory pricing
Predatory pricing for 30 years? When do the investors plan on collecting their profit? in the after-life? The decades long trend was simply the result of the industry maturing. Standard Oil's own margin compression was indicative of its lack of pricing power. Latent competition risk can drive down price just as existing competition. Let's also not forget, the German chemical giants would be quite willing to export to the US if Standard did not cut prices. They did not have to be physically present in the US to generate competitive pressure.
capital amortization (i.e. profit decline only in the accounting sense).
Thats a stretch. Do you have any support for that? The chart could easily
represent EBITDA as earnings.
EBITDA is recent invention. The chart was showing corporate earnings as reported by accountants to minimize taxes. The rapid rising asset coupled with declining earnings was indicative of accounting procedures being undertaken.
Dan8267
2013 Oct 31, 7:05am
Do you not realize the role of government licensing in maintaining media oligopoly?
If you are going to define any involvement of government in business, as government running the business then every business is ran by the government. The mere fact that corporations have legal charters makes them "touched" by government.
EBITDA is recent invention. The chart was showing corporate earnings as reported by accountants to minimize taxes. The rapid rising asset coupled with declining earnings was indicative of accounting procedures being undertaken.
Do you know why it is a recent invention? In the US, the Corporate income tax was first enacted in 1909. Why would accountants maximize depreciation (lowering earnings) in a tax-free environment.
They wouldn't. Come on, just admit you're making this one up. You have absolutely no support for your assertion that falling margins in the face of exploding assets is in accounting margins only.
Do you not realize the role of government licensing in maintaining media oligopoly?
If you are going to define any involvement of government in business, as government running the business then every business is ran by the government. The mere fact that corporations have legal charters makes them "touched" by government.
The Corporation is indeed a legal entity created by the government. The Corporate Veil shield individuals from business failures is a big part behind the high risk gambling that the Wall Street Corporations engage in. For a long time, Wall Street firms had to function as partnerships (in order to be acceptable to clients), where the partners were not shielded from gambling failures.
In the media corporations, the influence of government is all the more significant as licensing and spectrum restrictions come into play. Like I illustrated in the previous post but you chose to snip, the contrast between the segment of the media industry that requires government licensing vs. the segment that does not (internet online media) behave very differently as far as oligopolistic tendencies are concerned.
Predatory pricing for 30 years? When do the investors plan on collecting their
profit? in the after-life?
They maintained profitability throughout those 30 years. Their monopoly power was derived from economy of scale and control of natural resources.
Standard was able to charge a low enough price for refined oil to make competition difficult because they also controlled a large portion of distribution channel throguh Flagler and Rogers.
You are kidding yourself if you think they couldn't have set the market price higher for refined products when they controlled 90%+. They didn't because of Sherman - they were trying to avoid breakup.
PeopleUnited
2013 Nov 1, 10:08am
President Johnsons no so Great Society redistributed trillions of dollars through a "stable distribution of income and wealth".
The end result? Nothing.
The best way to redistribute wealth is by free enterprise...something retarded liberals just can't figure out for yourselves.
Actually the end result of free enterprise will always be major winners and major. Losers. If you think free enterprise can efficiently solve inequality then how is it that the rich keep getting richer? Please don't try to tell us that the Scrooge mcducks of the world can continue to hoard their wealth and resources AND everyone else can STILL have their fair share.
Survival of the fittest so that the human race improves over time. Let the weak disappear and stop propping them up. It's called evolution and we need to stop interfering with progress.
PeopleUnited
2013 Nov 2, 12:59am
Income, intelligence, strength, independence, cleanliness, honesty, etc will NEVER be equal. Thats why some athletes earn millions per year and others make nothing. Thats why some business people earn fabulous incomes and others go out of business.
There are race norses and there are work horses, they will never be equal. Why do liberals have such a hard time understanding that simple principle? Could it be their unrealistic obsession with utopia?
I think it is an inborn character flaw that causes them to want to fix everyone else's problems. Usually they are unfortunately oblivious to their own shortcomings and therefore utterly incapable of diagnosing anyone else. They mean well, but cause more harm with their good intention than laissez faire ever could.
tatupu70
2013 Nov 2, 1:29am
Why do liberals have such a hard time understanding that simple principle?
Liberals understand it fine. They also understand that when wealth disparity gets to the current levels, the economy stops working. And that's why they favor a strongly progressive tax so that the disparity won't ever get to the point that it's at today (or 1929) and we can always enjoy a strong economy.
Why can't conservatives understand this?
Why do liberals have such a hard time understanding that simple principle?
Liberals understand it fine. They also understand that when wealth disparity gets to the current levels, the economy stops working. And that's why the favor a strongly progressive tax so that the disparity won't ever get to the point that its at today (or 1929) and we can always enjoy a strong economy.
Why can't conservatives understand this?
But don't solve wealth disparity through force, solve it by creating an environment that allows private enterprise to grow and by reducing welfare and social entitlements so that it lights a fire under people's asses. Otherwise, the motivation to excel or even survive is sapped.
tatupu70
2013 Nov 2, 2:35am
But don't solve wealth disparity through force, solve it by creating an
environment that allows private enterprise to grow and by reducing welfare and
social entitlements so that it lights a fire under people's asses. Otherwise,
the motivation to excel or even survive is sapped.
Unfortunately, history has proven that your proposal doesn't work. There was minimal welfare or social entitlements in the 1920s and wealth disparity was very high.
Bellingham Bill
2013 Nov 2, 3:04am
But don't solve wealth disparity through force, solve it by creating an environment that allows private enterprise to grow and by reducing welfare and social entitlements so that it lights a fire under people's asses. Otherwise, the motivation to excel or even survive is sapped.
Here in the real world . . .
http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html
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It seems apparent to me that income inequality drags our economy down and limits its potential. If consumers, even while working two jobs and having more than one wage earner in the household, can't afford basic goods and services, then every entity in the US suffers.
That said, how can it be rectified? How are wages set in a capitalist society? Is it only through taxing the wealthy that we can achieve a more stable distribution of income and wealth?
What else can be done?