[jaws]

$this->bbcode_second_pass_quote('Zentric', 'J')aws, your jargon-filled explanations are so turgid, I often can't tell what you're saying or what side, if any, you're taking in an argument. And can you see what happens? Your vagueness has sucked me into this conversation with you. They've given the job to Bernanke already, so give it a rest.

You say that Wal-mart is monopolistically competitive with Target - which I take to mean the stores are brand-name-distinctive, yet comparable (and let's hope, for the sake of your argument, that the poor slobs who shop at Wal-Mart also can choose to shop at a Target right in their same neighborhood).

Then, in your next paragraph you say that the Standard Oil of old is not monopolistic. Well, if Standard Oil could dramatically raise their revenues by dramatically raising their prices in one locale, while knocking other, smaller gasoline vendors out of business by dramatically lowering their prices in another locale, what else would you call it other than "good, fair and free-market business practices"?

[jaws]

$this->bbcode_second_pass_quote('nero', 'I')s this your idea that since they can always walk away they balance of power in the negotiations is even? This is simply not true. The division of the benefits of trade are set in negotiations. The ability to extract the maximum for your side is set by the opportunity cost of walking away from the deal. If you have limited options as to where else you can work then you are in a poor bargaining position. If your opposite number in the negotiations has a multitude of alternative sources for those kind of services or if the loss involved in not hiring at all is not significant to their bottom line then they are in a stronger negotiation position and therefore can extract a larger fraction of the benefits of trade.

[...]

In the classic case of a small mill town if the employer chooses to terminate an employee's contract then the employee will have the large cost of moving to another location to find work (substitution). Whereas the employer simply can continue the work with their remaining employees until someone comes along who is willing to work at the less advantageous terms. Since the market for employees is more liquid even in a small town than the market for jobs the opportunity cost of forgoing the services of that particular employee is less than the opportunity cost to the employee of losing their job.

[nero]

$this->bbcode_second_pass_quote('jaws', 'B')ut again, the assumption that employers have greater bargaining power is based only on the fact that employees seek the highest pay. The employer must offer this high pay to keep his employees from leaving town. He has an opportunity cost to face as well. If the employees were to offer to work for pay below the market rate, then they would claim all of the bargaining power, because the opportunity cost for the employer of replacing a low-paid employee with a market-rate one is comparatively much higher. Of course if employees care only about getting as much money as they can be offered, then they give up their bargaining power.

[threadbear]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('Zentric', 'J')aws, your jargon-filled explanations are so turgid, I often can't tell what you're saying or what side, if any, you're taking in an argument. And can you see what happens? Your vagueness has sucked me into this conversation with you. They've given the job to Bernanke already, so give it a rest.

You say that Wal-mart is monopolistically competitive with Target - which I take to mean the stores are brand-name-distinctive, yet comparable (and let's hope, for the sake of your argument, that the poor slobs who shop at Wal-Mart also can choose to shop at a Target right in their same neighborhood).

Then, in your next paragraph you say that the Standard Oil of old is not monopolistic. Well, if Standard Oil could dramatically raise their revenues by dramatically raising their prices in one locale, while knocking other, smaller gasoline vendors out of business by dramatically lowering their prices in another locale, what else would you call it other than "good, fair and free-market business practices"?

[jaws]

$this->bbcode_second_pass_quote('nero', 'T')he market rate is whatever people get paid. The market rate is set by the relative bargaining power of the two individuals making the latest trade. To say they have no bargaining power if they demand the going rate is to mistake the direction of causality. The relative bargaining power sets the market rate, the market rate does not set the bargaining power.

[jaws]

$this->bbcode_second_pass_quote('threadbear', '
')And this is what you do, Jaws. You split hairs when you're cornered and use jargon. I think everyone here understands the concepts you're describing quite well. It's not a lack of understanding, but an appropriate amount that has me rolling on the floor laughing at how you defend yourself.

It is disingenuous, in the extreme to get overly technical to support your lame point while ignoring the bigger picture of true monopolistic control, as it applied to Standard oil. Then you trot out examples like Starbuck as opposed to Macdonald's price of coffee. There are literally hundreds of people competing with both. They just have market dominance--it's not the same thing, and you're beating a dead horse by using them as examples. They have nothing to do with monopoly, at the present time. So let's give it up, shall we?

[threadbear]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('threadbear', '
')And this is what you do, Jaws. You split hairs when you're cornered and use jargon. I think everyone here understands the concepts you're describing quite well. It's not a lack of understanding, but an appropriate amount that has me rolling on the floor laughing at how you defend yourself.

It is disingenuous, in the extreme to get overly technical to support your lame point while ignoring the bigger picture of true monopolistic control, as it applied to Standard oil. Then you trot out examples like Starbuck as opposed to Macdonald's price of coffee. There are literally hundreds of people competing with both. They just have market dominance--it's not the same thing, and you're beating a dead horse by using them as examples. They have nothing to do with monopoly, at the present time. So let's give it up, shall we?

[jaws]

That's the point of monopolistic competition and defining what a monopoly is. To decide whether or not Standard Oil was a monopoly depends entirely on how you define the class of the good they sold. Was it kerosene, oil, energy? Kerosene has many substitutes, and energy is a broad market where Standard Oil was only one of many actors, competing with coal and wood.

The same process took place when Microsoft was identified as a monopoly. They were the only supplier of Microsoft Windows, not the only supplier of computer operating systems by far, and one of countless suppliers of computer software. But since the law was vague and gave the government the power to take down Microsoft, they tried it. And it was a mess.

What if Standard Oil was actually good for the public? That they lowered prices on fuel by realizing economies of scale? The whole theory of anti-monopolism falls apart because it requires that the monopoly be able to take advantage of its monopoly position to raise prices, something that arguably only DeBeers has ever succeeded at doing for a long period, and OPEC sometimes succeeded.

[threadbear]

Jaws, You're pretty much arguing that black is white here. Just because Standard Oil didn't control all sources of energy, all the way from coal to oil blubber doesn't mean they weren't a monopoly. They controlled the oil sector. Period. End of story. Even judged by the most ambiguous terms, it's pretty inescapable that you are simply incorrect.

[jaws]

Perhaps they controlled the oil sector. The question to ask is, so what? How is controlling the oil sector any worse than controlling expensive gourmet coffee or PC operating systems?

The anti-monopolists answer has always been that it allowed them to raise prices and it was therefore inneficient. The reality with Standard Oil is that they lowered prices. It was therefore more efficient for one gigantic enterprise to run the oil business than it was before with several enterprises.

[Zentric]

$this->bbcode_second_pass_quote('jaws', 'P')erhaps they controlled the oil sector. The question to ask is, so what? How is controlling the oil sector any worse than controlling expensive gourmet coffee or PC operating systems?

The anti-monopolists answer has always been that it allowed them to raise prices and it was therefore inneficient. The reality with Standard Oil is that they lowered prices. It was therefore more efficient for one gigantic enterprise to run the oil business than it was before with several enterprises.

[nero]

$this->bbcode_second_pass_quote('', 'Y')ou can't have it both way. Either the market rate sets a fair and equal balance of power between workers and employers, or employers are horrible oppressors abusing the plight of their employees. If the employees have no bargaining power then the employer can demand they work for nothing. That is not the case, therefore a balance must exist.

[nero]

$this->bbcode_second_pass_quote('', 'P')erhaps they controlled the oil sector. The question to ask is, so what? How is controlling the oil sector any worse than controlling expensive gourmet coffee or PC operating systems?

The anti-monopolists answer has always been that it allowed them to raise prices and it was therefore inneficient. The reality with Standard Oil is that they lowered prices. It was therefore more efficient for one gigantic enterprise to run the oil business than it was before with several enterprises.

[donshan]

$this->bbcode_second_pass_quote('nero', 'T')he problem with globalization isn't trade liberalization itself. I agree with the jaws that trade itself isn't a bad thing. The real problem with globalization and the current economic consensus is the way it tends to cater to the needs of the corporations and the wealthy and ignore the worker's rights, the environmental consequences or social equity for the poor.

Yes the two people involved in the trade both will benefit from the deal but one party can still feal agrieved if he or she recognizes that the other party receives the vast majority of the benefits of the deal.

[CARVER]

$this->bbcode_second_pass_quote('nero', 'T')he problem with globalization isn't trade liberalization itself. I agree with the jaws that trade itself isn't a bad thing. The real problem with globalization and the current economic consensus is the way it tends to cater to the needs of the corporations and the wealthy and ignore the worker's rights, the environmental consequences or social equity for the poor.

Yes the two people involved in the trade both will benefit from the deal but one party can still feal agrieved if he or she recognizes that the other party receives the vast majority of the benefits of the deal.

[lakeweb]

$this->bbcode_second_pass_quote('CARVER', 'P')roperty rights should be protected, but who sais that the current distribution of property is 'right'. Maybe what we need is a system that does not lead to concentration of wealth, but instead has a bias to move towards an even distribution of wealth.

[jaws]

$this->bbcode_second_pass_quote('CARVER', 'P')roperty rights should be protected, but who sais that the current distribution of property is 'right'. Maybe what we need is a system that does not lead to concentration of wealth, but instead has a bias to move towards an even distribution of wealth.

[jaws]

$this->bbcode_second_pass_quote('nero', 'W')e already went into in this thread how Standard Oil abused their monopoly to protect their monopoly and to extract secret advantageous deals from their suppliers. You think that we should forgive all these anti-competitive trade practices because Standard Oil gouged their suppliers not their customers?

[CARVER]

$this->bbcode_second_pass_quote('jaws', 'Q')uestioning the justness of the allocation of property is missing the point of the institution of property entirely. Property is a mutual protection agreement against theft. Property makes possible the creation of new property, and this creation of new property is how civilization advances. If you start questioning whether or not someone deserves the property he owns then you are advocating theft, and the mutual protection agreement falls apart along with the progress of civilization.

[nero]

$this->bbcode_second_pass_quote('jaws', 'T')here's nothing wrong with any of this. Why shouldn't they compete for buyers with lower prices? Why shouldn't they get the best deals they can from their suppliers? To argue that they have no right to this is to advocate protectionism... in the name of competition!!