Anti trust

[eugenekop]

Wow, this video is really great: http://www.youtube.com/user/misesmedia#p/u/121/mwH8unDcdMY

Even though most anti trust cases were damaging to the economy, but I still can't rule the benefit of some government interventions. For example Intel payed money to computer producers such as Dell not to use AMD chips. Isn't that just thugish? Do we really want that to happen in our economy? How can small companies like AMD compete with giants with limitless resources such as Intel? What is the incentive to innovate if some thug like Intel crushes you like a bug when you try to sell your product?

 

[YumYum]

With Austrian economics you cannot stop monopolies. Austrian economics is great in the dream world, but in reality could never exist because it assumes that we are all decent people. Capitalism, The Free Market, is like a poker game where you, an expert in poker, has $100,000 in cash to play, and Bill Gates shows up to the poker game with $20 billion. You are an expert at poker and Bill Gates doesn't have a clue how to play. Who do you think will win? Of course, Bill Gates, and I think you see that this is obvious.

The good people on this board will answer your questions regarding economics. They will attempt to help you any way they can.

You can help us. You say your are from Israel. Surely you have an opinion on the current crisis that we are all facing. I do not want to derail this excellent thread with the questions I want to ask you, one Jew to another, but my questions should be on the "General Politics" forum. If I ask questions, will you kindly respond?

 

[TheHumblePhysicist]

With Austrian economics you cannot stop monopolies. Austrian economics is great in the dream world, but in reality could never exist because it assumes that we are all decent people. Capitalism, The Free Market, is like a poker game where you, an expert in poker, has $100,000 in cash to play, and Bill Gates shows up to the poker game with $20 billion. You are an expert at poker and Bill Gates doesn't have a clue how to play. Who do you think will win? Of course, Bill Gates, and I think you see that this is obvious.

The good people on this board will answer your questions regarding economics. They will attempt to help you any way they can.

You can help us. You say your are from Israel. Surely you have an opinion on the current crisis that we are all facing. I do not want to derail this excellent thread with the questions I want to ask you, one Jew to another, but my questions should be on the "General Politics" forum. If I ask questions, will you kindly respond?

I think you are confusing "Austrian economics" with "Anarchy". Although most Austrians are anarchists in disguise, it is important to recognize Austrians focus on the business cycle and monetary policy.

Anarchy doesn't work, because it assumes that people have 100% information, never die, and always view problems from a rational long term perspective, rather than being sucked in by short term gains.

But I think you have to make that distinction. Don't discount free markets because of the radicals.

 

[YumYum]

I think you are confusing "Austrian economics" with "Anarchy". Although most Austrians are anarchists in disguise, it is important to recognize Austrians focus on the business cycle and monetary policy.

Anarchy doesn't work, because it assumes that people have 100% information, never die, and always view problems from a rational long term perspective, rather than being sucked in by short term gains.

But I think you have to make that distinction. Don't discount free markets because of the radicals.

I don't discount anything. Explain to me how the good citizens of my county could stop a multi- billionaire from buying up the county in a free market environment?

How does Austrian economics stop greed?

 

[hugolp]

Wow, this video is really great: http://www.youtube.com/user/misesmedia#p/u/121/mwH8unDcdMY

Even though most anti trust cases were damaging to the economy, but I still can't rule the benefit of some government interventions. For example Intel payed money to computer producers such as Dell not to use AMD chips. Isn't that just thugish? Do we really want that to happen in our economy? How can small companies like AMD compete with giants with limitless resources such as Intel? What is the incentive to innovate if some thug like Intel crushes you like a bug when you try to sell your product?

Intel has gained his place in the first place through government enforced patents (patents discourage innovation). So his position is not gained through free market dinamics, but using government regulations.

That said, nothing has changed since the government went in. The government made Intel pay some money to itself and thats all. The situation has not change, the vendors keep using Intel chipsets. For all we know the situation has not changed except that Intel is paying to the government as well.

Same happen with Microsoft and the EU. The EU made Microsoft pay some money because supposedly it was a monopoly and let them be. It seems to me they are just raising extra money.

The most funny anti-trust case was when Blockbuster was accused of being a monopoly, to go bankrupt 5 years later: http://mises.org/daily/4506

With Austrian economics you cannot stop monopolies. Austrian economics is great in the dream world, but in reality could never exist because it assumes that we are all decent people. Capitalism, The Free Market, is like a poker game where you, an expert in poker, has $100,000 in cash to play, and Bill Gates shows up to the poker game with $20 billion. You are an expert at poker and Bill Gates doesn't have a clue how to play. Who do you think will win? Of course, Bill Gates, and I think you see that this is obvious.

I though you knew better.

 

[TheHumblePhysicist]

I don't discount anything. Explain to me how the good citizens of my county could stop a multi- billionaire from buying up the county in a free market environment?

How does Austrian economics stop greed?

This is not Austrian economics specifically, this is just economics.

Well, you need to realize that the free market only works in the following situation:

1. contracts are enforced,

2. force is not used (You can't hire a bunch of thugs to extort money from people)

3. no slavery (in the old days, if you went into debt, you became a slave to pay it off, nowadays that is a no no)

So if a billionaire decided to buy the government, and begin extorting money from people with taxes and armed gestapo, that is not the free market, because it violates rule #2.

These rules are not some arbitrary construction I pulled out of my ass. These are the well established doctrines of capitalism. Our constitution was directly written to set up the rules under which a free market could exist, and this is what they were. (It is no coincidence that The Wealth Of Nations came out in 1776)

 

[eugenekop]

So hugolp, are you against any anti-trust regulations? What about this hypothetical case. Some company discovers a new resource called "unobtainium", this resource when consumed adds 200 years to your life. No one except the company knows that. Now the company buys ALL the unobtainium in the world. It has done so fairly, but now only this company owns it. Surely it is a monoply right now.

Now about Intel, it might be that the damage was already done and AMD, despite having better chips could not compete fairly with Intel because Intel payed a lot of money to all computer manufacturers, and after a year of such payments and a year without revenues AMD, despite the better and more innovative chips, had to give up.

 

[cooker263]

With Austrian economics you cannot stop monopolies. Austrian economics is great in the dream world, but in reality could never exist because it assumes that we are all decent people. Capitalism, The Free Market, is like a poker game where you, an expert in poker, has $100,000 in cash to play, and Bill Gates shows up to the poker game with $20 billion. You are an expert at poker and Bill Gates doesn't have a clue how to play. Who do you think will win? Of course, Bill Gates, and I think you see that this is obvious.

The good people on this board will answer your questions regarding economics. They will attempt to help you any way they can.

You can help us. You say your are from Israel. Surely you have an opinion on the current crisis that we are all facing. I do not want to derail this excellent thread with the questions I want to ask you, one Jew to another, but my questions should be on the "General Politics" forum. If I ask questions, will you kindly respond?

The only monopolies we have are government-enforced monopolies. Think about it - if the government didn't sanction monopolies, we wouldn't have any.

They don't exist in a free society because as soon as the price of something goes too high, the quality is too poor, or there is any gap in satisfaction, a competitor would come about with their alternative.

Nobody forces you to buy Microsoft. Yeah, tons of people use it - but if people weren't generally satisfied with it, they'd buy something else. Vista came along and it sucked - look at the market share Apple was able to gain. Furthermore - mobile is the future - I can't think of anyone that actually uses Windows Mobile.

The one way a monopoly could exist is on an island or something that has a resource in demand that is only produced on that island. If one entity owns the island and the resources on it, you could call that a natural monopoly. However, odds of that are pretty slim.

I think there could be monopolies in the short run but they would not be sustainable in the long run without the help of governments.

 

[eugenekop]

The problem is that when some firms are very large and have a lot of resources, it becomes too difficult to compete with them. As a result there is less innovation. You have to come up with something really incredible to beat up a huge corporation like Intel, otherwise Intel will just dump the prices and you will go bankrupt. There are a lot less incentives to come up with creative and efficient solutions when your competitors use money to counter you and not better solutions.

For example it is very difficult to compete with Microsoft. If you come up with something innovative, Microsoft just copies into its own product and you become irrelevant. What incentive is there to innovate under such conditions?

 

[hugolp]

So hugolp, are you against any anti-trust regulations? What about this hypothetical case. Some company discovers a new resource called "unobtainium", this resource when consumed adds 200 years to your life. No one except the company knows that. Now the company buys ALL the unobtainium in the world. It has done so fairly, but now only this company owns it. Surely it is a monoply right now.

Can you point a case where this has happened? I mean if we are going to start speculating about hypothetical situations we could justify almost anything, but the reality is this things dont happen. Check the case of rare earth metals where China produced almost all of them for the last decade. Now their price is rising as chinese are consuming more for themselves, and the USA is reopening a mine and will be operative in 2012.

Now about Intel, it might be that the damage was already done and AMD, despite having better chips could not compete fairly with Intel because Intel payed a lot of money to all computer manufacturers, and after a year of such payments and a year without revenues AMD, despite the better and more innovative chips, had to give up.

Well, AMD having better chips... I actually like a lot the Atom series. I have one as my home server. Now AMD is going to come out with a new series that have GPU included. Will see how it does with those. But when AMD was competitive in the server segment it dominated it. Also when Intel dominated the notebook market same accusations happened, but then AMD got in shape and his chipsets started appearing in notebooks.

The problem is that when some firms are very large and have a lot of resources, it becomes too difficult to compete with them. As a result there is less innovation.

Thats why it becomes easier to compete with them. As a firm becomes larger it becomes more burocratic, making it easier for smaller companies to outcompete them. Thats why big companies need regulations to keep competition out.

You have to come up with something really incredible to beat up a huge corporation like Intel, otherwise Intel will just dump the prices and you will go bankrupt. There are a lot less incentives to come up with creative and efficient solutions when your competitors use money to counter you and not better solutions.

Intel does a good job making chips. If it was that horrible it would have been outcompeted. The thing is that Intel is protected by patents making it for competitors harder, but there are several chip makers.

For example it is very difficult to compete with Microsoft. If you come up with something innovative, Microsoft just copies into its own product and you become irrelevant. What incentive is there to innovate under such conditions?

The industries with patent system become less innovative than the ones with patent system (I am a Ubuntu user): YouTube - Johanna Blakely: Lessons from fashion's free culture

 

[talkingpointes]

This thread seems sort of odd, especially considering that most here I assume would know a bit about computer hardware. Computers and electronics in general always have falling prices becuase of the innovation and the cutthroat competition. (No regulation) AMD and Intel would usually share ideas and patents, but no matter what AMD was never real competition for Intel seeing as how Intel has something like 80%+ of the manufacturing base. Suppose AMD had enough business to expand by the time they did the technology would be expired becuase of the lag in the physical creation from the R&D. However since ATI/AMD are now combined they're are going to lead in the future the switch from CPU's to GPU's will be the next big thing.

http://en.wikipedia.org/wiki/AMD_FireStream

 

[hugolp]

This thread seems sort of odd, especially considering that most here I assume would know a bit about computer hardware. Computers and electronics in general always have falling prices becuase of the innovation and the cutthroat competition. (No regulation) AMD and Intel would usually share ideas and patents, but no matter what AMD was never real competition for Intel seeing as how Intel has something like 80%+ of the manufacturing base. Suppose AMD had enough business to expand by the time they did the technology would be expired becuase of the lag in the physical creation from the R&D. However since ATI/AMD are now combined they're are going to lead in the future the switch from CPU's to GPU's will be the next big thing.

http://en.wikipedia.org/wiki/AMD_FireStream

Intel has been trying the CPU+GPU thing for years with the Labarree project, but it was a big failure, that has been re-scheduled several times.

AMD got more than 50% of the market share for servers (not desktops) for a while. It outcompeted Intel.

 

[talkingpointes]

Intel has been trying the CPU+GPU thing for years with the Labarree project, but it was a big failure, that has been re-scheduled several times.

AMD got more than 50% of the market share for servers (not desktops) for a while. It outcompeted Intel.

http://www.itproportal.com/2010/11/23/acer-use-amd-zacate-chip-7-inch-tablet/

They are almost ready to sell the chips ???

YouTube - AMD Financial Analyst Day 2010: AMD Fusion Technology Demonstrations

 

[hugolp]

http://www.itproportal.com/2010/11/23/acer-use-amd-zacate-chip-7-inch-tablet/

They are almost ready to sell the chips ???

I know.

I said INTEL has been struggling to deliver a decent CPU+GPU chipset (Labarree project). I wanted to point out that the supposedly monopolistic company (Intel) was being outcompeted by the smaller one (AMD). So its a prove that its not always impossible to fight against the big dog.

EDIT: Sorry the Intel project name is Larrabee: http://en.wikipedia.org/wiki/Larrabee_(microarchitecture) Why do they use this stupid names?

 

[talkingpointes]

I know.

I sad INTEL has been struggling to deliver a decent CPU+GPU chipset (Labarree project). I wanted to point out that the supposedly monopolistic company (Intel) was being outcompeted by the smaller one (AMD). So its a prove that its not always impossible to fight against the big dog.

Oh ok, sorry about that, I assumed you meant the big company couldn't do it so why could the little guy do it. Good point and thanks.