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post #51 of 54
Quote:
Originally Posted by guyladouche View Post

I'm not saying that government policies are perfect when it comes to utilities (though I do think prices for utilities are generally as fair as they can be). In a free market, I agree, companies are held accountable to their customers. But in the case of a monopoly, that is not the case, as customers don't have an alternative (other than nothing). When you have a service like wireless providers that people rely on so much for their day-to-day tasks, there's a huge amount of power that gives to the companies to levy unfair and unrealistic prices. Prices are already absurd IMHO and there are already competing companies.
I don't know if you do or do not support the idea of this merger, but you in fact state that the free market is the best regulator for businesses--and I agree. But when you whittle down the free market down from many to only three major providers for a service, that's no longer a free market since there aren't enough competing services to truly put pressure on the rest of them.

Just read Alan Greenspan's piece on ALCOA and see that a single company holding a monopoly can indeed be competitive. There doesn't need to be a set amount of firms, especially with firms that have economies of scale. As you said, these types of industries actually provide cheaper prices because of economies of scale. Though you claim this cannot work in the real world, I disagree. And historically I can prove it to be the case.
Quote:
Originally Posted by trumpet-205 View Post

Explain please.

It's a fallacy because some say it "needs to be operated" as a monopoly, indicating that indeed large firms have economies of scale and operating that way does create lower prices but at the same time saying this cannot be done.

I've already posted statistics of accused monopolized and cartelized industries and their prices in the decade proceeding the Sherman Antitrust Act. The fact is that these companies were putting the little guys out of business and because they were lowering prices Congress passed this act.

Just look at the Congressional record of the time.

Representative William Mason: “trusts have made products cheaper, have reduced prices; but if the price of oil, for instance, were reduced to one cent a barrel, it would not right the wrong done to people of this country by the trusts which have destroyed legitimate competition and driven honest men from legitimate business enterprise."

Republican, Senator Edmunds: “Although for the time being the sugar trust has perhaps reduced the price of sugar, and the oil trust has reduced the price of oil immensely, that does not alter the wrong of the principle of any trust.”

Government is the only true source because it can enforce laws by force. A private business cannot send in the police and shut down a company or arrest them.


Another fact to think about. 90% of antitrust lawsuits are filed not by the government but by private companies.
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post #52 of 54
Quote:
Originally Posted by critical46 View Post

It's a fallacy because some say it "needs to be operated" as a monopoly, indicating that indeed large firms have economies of scale and operating that way does create lower prices but at the same time saying this cannot be done.

I've already posted statistics of accused monopolized and cartelized industries and their prices in the decade proceeding the Sherman Antitrust Act. The fact is that these companies were putting the little guys out of business and because they were lowering prices Congress passed this act.

Maybe I should have use better wording. When it comes to public utility (excluding AT&T of course), utility companies have very large fixed cost going on (maintaining power plants, water filtration, checkup on gas pipes, etc). So when you have another competitor in the same market each company will have divided customer share. Fixed cost is the same regardless how many customers are subscribed to your service. Therefore average fixed cost will be higher with fewer customers. Consequently many public utilities have government commission to regulate its price, in exchange for a monopoly. This is done to keep average fixed cost low, and in return, price low. California energy crisis in 2000 is an example where government attempted to increase competition in energy market, only to be backfired from divided customer pool and various other reasons.
Edited by trumpet-205 - 12/13/11 at 6:15am
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post #53 of 54
Yay, more greedy ass people *****ing about not making enough money.
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post #54 of 54
Quote:
Originally Posted by critical46 View Post

Just read Alan Greenspan's piece on ALCOA and see that a single company holding a monopoly can indeed be competitive. There doesn't need to be a set amount of firms, especially with firms that have economies of scale. As you said, these types of industries actually provide cheaper prices because of economies of scale. Though you claim this cannot work in the real world, I disagree. And historically I can prove it to be the case.
It's a fallacy because some say it "needs to be operated" as a monopoly, indicating that indeed large firms have economies of scale and operating that way does create lower prices but at the same time saying this cannot be done.
I've already posted statistics of accused monopolized and cartelized industries and their prices in the decade proceeding the Sherman Antitrust Act. The fact is that these companies were putting the little guys out of business and because they were lowering prices Congress passed this act.
Just look at the Congressional record of the time.
Representative William Mason: “trusts have made products cheaper, have reduced prices; but if the price of oil, for instance, were reduced to one cent a barrel, it would not right the wrong done to people of this country by the trusts which have destroyed legitimate competition and driven honest men from legitimate business enterprise."
Republican, Senator Edmunds: “Although for the time being the sugar trust has perhaps reduced the price of sugar, and the oil trust has reduced the price of oil immensely, that does not alter the wrong of the principle of any trust.”
Government is the only true source because it can enforce laws by force. A private business cannot send in the police and shut down a company or arrest them.
Another fact to think about. 90% of antitrust lawsuits are filed not by the government but by private companies.

Alan Greenspan served as the director of the company, I'm not surprised that he defended their previous actions.

Besides, I never said that companies that become monopolies are prohibited from conducting fair and responsible business, only that historically there's no real trend to think that ALL companies will behave that way. Given how AT&T has conducted themselves over time, I see no reason to expect that they would behave in a fair and responsible way when passing down costs to their customers.

I'm not saying that monopolies will ALWAYS result in unfair business practices and higher prices to the consumer, and I'm not saying that ALL government-regulated utility companies will ALWAYS operate fairly or in morally/ethically-responsible ways. But given the illusion of the power I have as a voting citizen, I would rather support a government-regulated utility "monopoly" than a private-sector, board-run monopoly of a service that I deem as necessary to my day-to-day life where I have no choice in the matter.
    
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