mck@ratex.UUCP (Daniel Kian Mc Kiernan) (05/01/85)
Lines marked '>' are sevener's latest straw-man argument. >For some time Danny Mck. has asked me to substantiate my claim >that monopoly power poses a very real detriment to the supposed >benefits of the "market" and often leads to contradictions >of the theoretical efficiencies of the "market". (lower prices,etc.) >I have cited historical examples of monopolies like Standard Oil. >The fact that our country has had antitrust legislation since then >to break up such pure monopolies distorts attempts to measure >their stability. >But the problem of monopoly power is not simply the problem of >one company which totally controls a given market 100%. It is >the problem of oligopoly power as well, which is the truly modal >means of production for the top 500 corporations in the U.S. >There is substantial and repeated documentation of the extent >of oligopoly power in the U.S. I have finally sorted through my >books and found some hard facts for Danny Mck and other Libertarians >to chew on regarding monopoly power in todays economy. > >>From "Monopoly Power and Economic Performance" by Edwin Mansfield: > Percent of Total Sales made by Four Largest U.S. firms in > each Industry, 1962 >------------------------------------------------------------------- >80.8 Motor Vehicles 27.3 Primary nonferrous metals >47.3 Aircraft 14.7 Other fabricated metal products >30.3 Other transport equipment 18.1 Stone, clay and glass products >34.4 Electrical machinery 5.2 Furniture and fixtures >14.5 Metalworking machinery 21.2 Lumber and wood products >20.6 Other machinery 37.9 Instruments >40.2 Primary iron and steel 16.3 Miscellaneous manufacturing >42.9 Dairy products 31.0 Drugs and medicines >33.6 Bakery products 28.5 Other chemicals >12.5 Other food 50.2 Petroleum refining >22.0 Textile mill products 48.1 Rubber products > 4.9 Apparel 26.7 Leather >20.7 Paper 41.4 Alcoholic beverages >42.0 Basic industrial chemicals 70.9 Tobacco > >This is very old data. I suspect that updating it would reveal two >major differences between 1962 and today. One is that market concentrations >in general would have increased. The second is that to the extent market >concentrations have not increased (for example, notably autos) it is >not necessarily due to any development of new competition within the U.S. >but the movement of markets from the national to the global level. >This has not necessarily meant the victory for "free competition" or >free markets however. Many of the international firms which have invaded >U.S. markets from abroad, for example the auto companies from Japan, >have done so with massive government help and intervention. > >I think it is rather foolish to shrug off this market concentration and >say it has no effects on economic performance, some bad and some good. >To blindly continue in the "lasseiz-faire" approach is to continue >to believe blindly in a fantasy opposed to reality. Sevener, I have NEVER said, implied, or suggested that our economy does not have unhealthy concentrations of power. I have, at each stage of this argument, AGREED that such unhealthy concentrations do exist. Producing statistics to substantiate the existence of such concentrations does not refute my position; to pretend that it does is dishonest. At each stage of this argument, I have pointed out to you that the existence of such concentrations is a consequence of government intervention in the market; at each stage of this argument, I have directed you to one or more historical works (such as Kolko's *Triumph of Conservatism*) which detail the ways in which such intevention has acted to do so; at one point in this argument, you claimed that I had not explained how government intervention can do such a thing (notwithstanding the fact that I HAD mentioned where to FIND such explanations) so I explained how a regulatory body can create a de facto enforced cartel (Incidently, for about its first five years, the Roosevelt administration blamed the depression on, amongst other things, the failure of the market to produce cartels, and the adminstration set out to FORCE cartels into existence; when the recession of '38 happened, the Roosevelt administration blamed it on the failure of the market to break-up cartels!). In alleging that Libertarians are defending the status quo, and/or in pretending that a Fascist economy is a Free Economy, you are engaging in straw-man argumentation. Now, two points: Oligopoly power BY DEFINITION is not monopoly power. (Please resist the temptation to claim that I think either one is desirable.) Four-firm concentration ratios (like those you cite), measure concentration of market-shares, rather than concentrations of economic power. Due to differring price elasticities (roughly speaking: the responsiveness of consumers to changes in price) and differring barriers to entry, there is a poor correspondence between concentrations of market-shares and concentrations of economic power. (Please resist the temptation to claim that my pointing this out implies that I deny the existence of unhealthy concentrations of economic power.) Back later, DKMcK
orb@whuxl.UUCP (SEVENER) (05/02/85)
> > Lines marked '>' are sevener's latest straw-man argument. > I would appreciate it if you would stop labelling every critique of laissex-faire Libertarian ideology as a "strawman argument". Thank you. tim sevener whuxl!orb "Yeah, and he'll be the strawboss then........"