I'm going Socialist: Someone explain this to me?

[Patriot123]

So in my history class, we've been discussing trusts. A lot. We're now onto the Election of 1912. We've looked at so many acts trying to curb trusts. We've looked at "good" trusts and "bad" trusts who have ruined competition for an entire industry. As much of a conservative as I am, this is one topic that I can't just ignore and say, "let the free market decide." Trusts seem like they are literally the key flaw of Capitalism. Presidents have just kept regulating and regulating, and REGULATING the economy just to fix the problem of trusts! And they just keep coming back, or more just keep popping up. And it's so pointless. I'm beginning think that Capitalism is a failed form of economy -- that Socialism, despite its vices, is a much better way to have an economy set up. I hate this path of thinking that I'm on, but it just seems like there's no other way to have an economy work. Can someone please explain to me where my thinking on trusts is flawed? Why I'm wrong? Why a laissez-faire economy is better than a regulated, or even Socialist one?

 

[dannno]

Trusts are funded by bankers who counterfeit money into existence and loan it out at interest. Extremely dishonest. If you or I did that we'd be thrown in prison before we could create a trust to influence the economy. Banks receive protection from government to counterfeit.

 

[LibForestPaul]

Don;t trusts regulate government...can a monopoly exist without government/banking corruption

 

[paulitics]

So in my history class, we've been discussing trusts. A lot. We're now onto the Election of 1912. We've looked at so many acts trying to curb trusts. We've looked at "good" trusts and "bad" trusts who have ruined competition for an entire industry. As much of a conservative as I am, this is one topic that I can't just ignore and say, "let the free market decide." Trusts seem like they are literally the key flaw of Capitalism. Presidents have just kept regulating and regulating, and REGULATING the economy just to fix the problem of trusts! And they just keep coming back, or more just keep popping up. And it's so pointless. I'm beginning think that Capitalism is a failed form of economy -- that Socialism, despite its vices, is a much better way to have an economy set up. I hate this path of thinking that I'm on, but it just seems like there's no other way to have an economy work. Can someone please explain to me where my thinking on trusts is flawed? Why I'm wrong? Why a laissez-faire economy is better than a regulated, or even Socialist one?

Everything in your history class, is told from a biased point of view. They don't discuss corruption, the federal reserve being a private bank, and collusion between bankers and government. Government usually acts as a between firewall to protect the elite from the people who would take them to court.

 

[strapko]

Governments create the monopoly, because monopolies can only be created by deals that no other company gets, but why do these companies get these subsidies? Also, laws such as min wag, banning of certain substances, import export quotas all aid the creation of monopolies. As you see monopolies need force to exist. If a mon is created and sustained in a free-market I would have to argue that they offer the people the best prices, services and incentives which is hard to accomplish when you have fair competion.

 

[mtj458]

Another thing to look at is whether or not the monopoly is bad for the economy. Say you consider Standard Oil a monopoly, but Standard Oil allowed consumers to buy oil for an extremely inexpensive price. Just because other companies were not competing doesn't necessarily mean its a bad thing. If the trust is able to raise prices then that just gives incentives for competitors to enter the industry, since obviously there is plenty of profits to go around.

 

[emazur]

I haven't read it, but Folsom's The Myth of the Robber Barrons is supposed to be a pretty good book about this. Here's an article about it:
http://fee.org/nff/the-myth-of-the-robber-barons/
People bitch about Rockefeller's oil trust, but my understanding is that he dramatically reduced the price of oil. He did that (I think) w/o any government assistance, but on the other hand, he has said things such as "competition is a sin" and "I'd rather have regulation than competition" (paraphrasing here) - and used the govt. to club the competition by becoming a top dog in the Federal Reserve banking cartel.

Regulatory capture is the name of the game - this is on my wish list:
http://www.amazon.com/Big-Ripoff-Bu...=sr_1_1?ie=UTF8&s=books&qid=1257299938&sr=8-1

Regulation tends to crowd out the competition - only those who can afford to conform with the regulations stay or enter into the game. I've heard the founder of Home Depot say that he wouldn't have been able to do the same thing in today's regulatory environment.

 

[1836er]

What you have to realize is that after the Civil War the Republicans had largely uncontested control of the federal government and pushed through Henry Clay's "American System" of big-government wealth redistribution policies like high tariffs and government subsidies/exclusivity contracts (especially in regard to access to resources) for well-connected big business (especially the railroads, which in many cases became government-sponsored cartels). And, not only did the government interventionism into the economy come from Washington DC, it also increased at an unprecedented level at the state level (especially in the Northeast) too... whether we're talking about the railroads, the steel industry, coal, machine-tools, textiles, etc.

By the time of the Progressive Era we were already on the path to transforming our free market economy of the pre-war (Civil War) years into the "corporatist" system of today. Thus, just like today, the problem really wasn't so much the failure of capitalism that led to the rise of "trusts," it was the rise of government interventionism and wealth redistribution schemes into the economy that helped create the environment for well-connected big business to utilize the coercive powers of government to manipulate the "American System" to their particular advantage in ways that ran contrary to truly free market principles that was the problem. Just as now, once they had acquired their wealth, many of the so-called "robber barons" were content to ask for regulations to protect their wealth often at the expense of competition and free-market freedoms.

Had we enjoyed from 1865-1900 - on the other hand - largely non-interventionist government policies like those endorsed by President Grover Cleveland I think we would have seen noticeably different economic circumstances in regard to the rise of trusts (and I haven't even gotten into yet the disastrous state banking regulations that existed by the turn of the century that really helped concentrate power and wealth into the hands of the well-connected elites).

 

[LibertyMage]

Private industry can obtain a sustainable monopoly in a free market only if they can offer products at a price that competition can't meet. If they attempt to "milk" consumers then competition will undercut them.

The opacity comes in regulation. Regulation forces monopoly in many cases. The problem with this is that many people think companies that operate under a regulated market are operating under a free market. People think the credit bubble and the high medical costs are due to the free market. We all know that isn't the case.

 

[Bman]

People constantly want to refer to Rockefeller on this topic, and it is a fail.

Let me explain.

Market Share does not equal Monopoly. They want you to think about it that way but that is simply not a monopoly. Think about market share for a second and then consider on the RonPaul Forums you have a 100% market share of posts made by Patriot123. We can bend monopoly to mean anything we want if we look at it from a market share point of view, it's absurd.

The anti-trust stuff is nonsense. Sure they may get large market shares, but when they fail to be the best available means to get a product they will loose to competition. Actually as customers they insure us lowest possible prices on an item. If they tried cutting prices to destroy competition they would lose their advantage as soon as they rose their prices. There's no need for government to solve these problems. Market share does work itself out. I was once a doubter looking from the point of market share, but once I realized what a hoax market share is I realized quickly that free market still reigns supreme.

There's no reason to subsidize the failing. Another absurd idea.

 

[dannno]

Seems to me that a trust can only theoretically exist with corporations:

http://en.wikipedia.org/wiki/Trust_(19th_century)


Otherwise the business would have to be completely bought out by the person attempting to create a monopoly, and this makes it a market transaction rather than a payoff to investors.

 

[dannno]

Governments regulate corporations.

Corporations should be able to exist as long as they don't do anything that an individual cannot. So, if you want to create a company and get outside investors you should be able to structure it however you want, and get no special incentives or disincentives to do so.

There could be Incorporating Insurance companies who take on the liability for corporations in trade for premiums, that way you can start a business and still protect yourself from liability but in a free market way.

 

[erowe1]

So in my history class, we've been discussing trusts. A lot. We're now onto the Election of 1912. We've looked at so many acts trying to curb trusts. We've looked at "good" trusts and "bad" trusts who have ruined competition for an entire industry. As much of a conservative as I am, this is one topic that I can't just ignore and say, "let the free market decide." Trusts seem like they are literally the key flaw of Capitalism. Presidents have just kept regulating and regulating, and REGULATING the economy just to fix the problem of trusts! And they just keep coming back, or more just keep popping up. And it's so pointless. I'm beginning think that Capitalism is a failed form of economy -- that Socialism, despite its vices, is a much better way to have an economy set up. I hate this path of thinking that I'm on, but it just seems like there's no other way to have an economy work. Can someone please explain to me where my thinking on trusts is flawed? Why I'm wrong? Why a laissez-faire economy is better than a regulated, or even Socialist one?

So let me get this straight.

Trusts are bad.

The trusts that existed in our history existed under heavy government regulations and not in free markets.

Therefore, free markets are bad.

?

 

[Joe3113]

YouTube - Anti-Trust and Monopoly (with Ron Paul)

Do you have any understanding of Austrian Economics? It is the only reason Ron Paul has had a political career.

Seriously, head over to mises.org and get your learn on. There are free audio-books, lectures, everything. Get a mp3 player, and start listening when you drive, or are doing chores, going for a run, whatever.

Austrian Economics is quite literally, the only real way to guard yourself from fallacies.

 

[Joe3113]

A monopoly is not one provider of goods, but restrictions on free entry.

Government does that, and as a result - monopoly on justice, the courts, defense, formal education, etc.

When you have a monopoly on what is just, and you are the final arbiter - you will naturally rule in your own favour.

Hence, the failure of classical liberalism and the growth of the State to what it is now.

There is no state that has ever remained limited.. in the history of the world. It is utopian.

I think you have found the contradictions, but you are going the wrong way with it. The solution is more markets, not more socialism.

 

[NYgs23]

Yes, true monopoly can't exist without government protection, because you have open entry of competition. Anti-trust regulation was just another state-corporatist scheme for some businesses to use the state to bust their competitors. Standard Oil was losing market share before they were broken up as a "monopoly."

P.S. Take what they teach you in your presumably government-run school with a grain of salt.

 

[Akus]

So in my history class, we've been discussing trusts. A lot. We're now onto the Election of 1912. We've looked at so many acts trying to curb trusts. We've looked at "good" trusts and "bad" trusts who have ruined competition for an entire industry. As much of a conservative as I am, this is one topic that I can't just ignore and say, "let the free market decide." Trusts seem like they are literally the key flaw of Capitalism. Presidents have just kept regulating and regulating, and REGULATING the economy just to fix the problem of trusts! And they just keep coming back, or more just keep popping up. And it's so pointless. I'm beginning think that Capitalism is a failed form of economy -- that Socialism, despite its vices, is a much better way to have an economy set up. I hate this path of thinking that I'm on, but it just seems like there's no other way to have an economy work. Can someone please explain to me where my thinking on trusts is flawed? Why I'm wrong? Why a laissez-faire economy is better than a regulated, or even Socialist one?

I don't know why but I read all this with a Stewie's voice from Family Guy. Calm down, it's not the end of the world, so you and Ron Paul disagree on something, don't turn your political views into some religion.

 

[Che]

that's like saying baseball is not good for the society because of steroids. Isn't it? Is that a good analogy?

 

[Epic]

Here's a good article by anti-trust expert Armentano: http://mises.org/story/2694

He appears in the popular anti-trust youtube video with ron paul

BTW, there has never been a significant monopoly in a free market in the history of the US.

 

[youngbuck]

YouTube - Anti-Trust and Monopoly (with Ron Paul)

Do you have any understanding of Austrian Economics? It is the only reason Ron Paul has had a political career.

Seriously, head over to mises.org and get your learn on. There are free audio-books, lectures, everything. Get a mp3 player, and start listening when you drive, or are doing chores, going for a run, whatever.

Austrian Economics is quite literally, the only real way to guard yourself from fallacies.

And there's your answer