Created by gornotck
Post Reply The Government Should Break Up Companies That Form Monopolies Or Get Too Big
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Posted 7/17/17 , edited 7/17/17
So in this slew of articles of "x is destroying y" where, no matter what "x" is it could be replaced with "the government", and hearing about current monopolies in the eyeglass industry and agriculture, I thought about this function of government. Should the government break up businesses and monopolies too big to compete?
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Posted 7/17/17 , edited 7/17/17
Hey I actually have a opinion about whether or not a government should intervene when monopolies begin to form or "get too big" and the ways in which they can do so, or if they should just be all Laissez Faire about the whole thing. Let's go.

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Posted 7/17/17 , edited 7/17/17
The problem with capitalism is that monopolies are both the enemy
And the most natural consequence

Having the government break them up isn't the answer
Making a system where they don't form would be better. This means breaking up current Monopolies and if they ever reform, but it is not the main solution.


Personal Economic beliefs is that there needs to be enough socialism to give everyone a chance, but then let capitalism (and it's incentive system) drive society forward.
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Posted 7/17/17 , edited 7/17/17
[Warning: This is written by someone whose knowledge of economics comes from one book about basic macro economic concepts and what I heard others said so far, so take this with a truck ton of salt]

(Sorry for the wall of text)

[Answer]
Depends on what is wanted.(You'll hear the word "Depends" a lot, economy has trillions or more transactions going on yearly, very large, very complex, very difficult to predict)

[Actual answer 1]
If the reason of wanting to break up these companies is to allow those organisations who could not compete before to be able to do so for its own sake, perhaps because of the emotionally embroiled protect the little guy mindset, then the answer is yes.

[Actual answer 2]
However if the reason is to increase competition and because of it efficiency through the minimising the amount of time and resources to produce products & services through the fear of having clients/customers spend their money else where because of a better deal, and overall increasing the amount of said products & services being circulated in the economy which would also increase the living standards of the population as a whole, then it again depends on other things.

[Depends 1 for answer 2]
The thing to note is that increasing competition does not automatically result in an increase in efficiency. There are methods which could lead to an increase in efficiency that require large amounts of resources in order to perform that cannot be done by an equally (collectively) large amount from many separate companies to the same degree, e.g. using economies of scale, producing a lot of things at large cost with little profit each but sell a lot to receive a large total profit, which usually requires a lot of resources to setup. Back to the point, it also depends on the type of product or service as well as the environment they are produced in, e.g. how many people are buying?

[Depends 2 for answer 2]
Another thing is that the seemingly lack of competition in an environment (note: oligopolies and monopolies) might not actually mean there is no pressure to existing companies in said environments to be efficient as there is still the fact that companies, existing or not, might enter the low competitive environment due to the low risk (little competition). Also just because there is no direct competition doesn't mean there is no competition at all, e.g. pens and paper losing customers to computers as computers can do what pen and paper can do and more.

Not that I'm saying there's never going to be a situation where lack of competition will result in extortionary prices, though I do think that it's not as easy of a thing to happen as (again my opinion here) media implies.

[Conclusion]
From the reasons I could think of from the top of my head, depends on the situation.
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Posted 7/19/17 , edited 7/20/17
Definitely, the glasses industry is so monopolized that it costs about 800% more to buy than it is to actually produce. It is to the extent that someone would need life insurance or something to pay for these expensive glasses.
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Posted 8/9/17 , edited 8/10/17
This is what happens when you trade someone into the Orange monopoly before you've even passed go.
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Posted 8/10/17 , edited 8/10/17
Why not just bring back Feudalism!
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Posted 8/10/17 , edited 8/10/17
nope, that's how Capitalism is born. but it sure would be nice if they would step in and fix the healthcare "bill".
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Posted 8/10/17 , edited 8/11/17
Monopolies are the very antithesis of what most people consider capitalism to be, in particular regards to free competition. Even as a natural result of capitalism, that does not necessarily make it an acceptable thing nor harmless.

I am not sure of the resolving method here, but I disagree that monopolies give birth to capitalism as much as the benefits of capitalism are destroyed by it. Only a possibility, of course. Economic freedom and political efficacy go hand in hand.

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Posted 7/3/18 , edited 7/5/18
I vote neutral, but the answer should possibly be no considering those same Monopolies will complain of abusive power from the Government.

I have read some articles of how the Monopoly businesses have made earning money more difficult for smaller, independent businesses while constructing their stores in many locations as possible (I think of the story that was discussed in the previous five years with Walmart wanting to construct their business in Mexico where the Mayan ruins were).

The final decision may have to be the customers who are supporting the Monopolies, but that task will not be as easy as suggested being aware the Monopolies do outnumber independent companies that are doing successfully.
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Posted 7/5/18 , edited 7/5/18

Tactiturn wrote:

I have read some articles of how the Monopoly businesses have made earning money more difficult for smaller, independent businesses while constructing their stores in many locations as possible (I think of the story that was discussed in the previous five years with Walmart wanting to construct their business in Mexico where the Mayan ruins were).


This absolutely happens, it's a common business practice. Big business use their money and influence to persuade governments to introduce new "safety measures" and "health reforms" in regards to certain industries. Despite the fact that they are addressing rare and uncommon issues, they are heralded in as "a step in the right direction". This drives up the cost for smaller, starting business and only benefits the rich and already successful.

They also attempt to purchase potential threatening businesses when they're small, in an attempt to eliminate future competition. When these businesses refuse, the big companies start up a rival and sell the same service at a significantly lower price to either:

a) run the rival out of business, and force them to close down.
b) run the rival out of business, then buy them up in an "act of charity".

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Posted 7/10/18 , edited 7/11/18
I think when companies get to big any sense of customer service suffers, i businesses are motivated money and would hate to lose you competition so they try to be the better option. Remove that competition and consumers suffer in the long run.
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