Tag: Monopoly

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crime and punishment general freedom regulation

Monopoly vs. Monopoly

monopoly octopus, Joe Biden, Apple

The Biden Administration makes much of its pro-​consumer actions. President Sleepy Joe never tires of boasting about how his regulations favor consumers over credit card companies. Considering the massive taxation that his administration supports, however, saving a few bucks on overdraft fees looks a bit absurd in context.

As does the administration’s ramped-​up anti-​trust actions.

The federal government has now attacked Apple. On anti-​trust grounds. For being a monopoly.

The humor in this was noted by anti-​intellectual property theorist Stephan Kinsella, tweeting on X: “‘U.S. Sues Apple, Accusing It of Maintaining an iPhone Monopoly’ We grant you patent and copyright monopoly privileges and you use them to build up a monopoly? How dare you!”

Jeffrey A. Tucker of the Brownstone Institute was less amused, and less concerned with Apple’s reliance upon intellectual property, which he claims is secondary to the company’s useful products: “The very notion that the government is trying to protect consumers in this case is preposterous. Apple is a success not because they are exploitative but because they make products that users like, and they like them so much that they buy ever more.”

At issue is how Apple products work so well together but not so well with other manufacturers’ products. “The Justice Department calls this anticompetitive even though competing is exactly the source of Apple’s market strength,” insists Tucker.

Maybe it’s really about this principle: the government giveth; the government taketh away: blessed be the name of the Biden.

In full disclosure, I have an iPhone, which I hate, and a Microsoft Surface Book, which I also hate. I’m open to any of their competitors, which I might hate less.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets media and media people political economy too much government

Incredulity Doesn’t Cut It

dumpster fire, regulations, privatization

One of the objections people often make to the idea of private enterprise as a solution to government inefficiency is The Argument from Incredulity.

It’s not an argument at all, actually, just a harrumph and a guffaw: we cannot have free-​market police, or fire suppression, or … garbage collection!

But of course all those things are successfully managed in the private sector.

No media outfit has a longer history of pointing this out than Reason magazine. So when the editors of Reason brought us Joe Lancaster’s “Government Waste Monopoly Pits Private Dumpster Business Against Garbage Bureaucrats,” yesterday, I hope they took a moment to revel in a little nostalgia. For this is the kind of story that made Reason what it is today, one of the best sources for retail political economy.

The tale tells of Steven Hedrick, an Arkansas man who put together a business renting out dumpsters — like you often see on construction sites, but smaller — which he would haul away after customers filled them. He built the business without ever going into debt, and then … came the government. 

“[I]n April 2022, the City Council in Holiday Island passed Ordinance 2022-​004, which required all residents and businesses within the city to contract with the county sanitation authority, Carroll County Solid Waste (CCSW), for trash pickup and disposal services,” Reason informs us. “Anyone using private companies would have to switch, and anyone who did not have contracted trash service would have to sign up.”

And Hedrick’s little business must be … dumped.

What this is, at base? Sheer bigotry: preferring monopoly government to competitive private services.

For those of us who’ve been reading Reason for decades, it sports a familiar smell.

Just not a good odor, for the drive to monopolize everything stinks.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets judiciary

The Cheese Stands “Unprotected”

Witte WievenKaas, cheese, copyright, law

Governments tempt us — with special privileges and advantages. 

You know what also tempts us?

Cheese.

Cheese? Yes. In the Netherlands, cheese is a big deal, as Baylen Linnekin relates in “Cheese Fight Ends With Court Declaring Producers Can’t Copyright Taste,” over at Reason — where I go for all my cheese-​related coverage. (Don’t you?)

The tale is about two cheese companies and the European Union’s “Directive 2001/​29/​EC,” which tries to reconcile copyrights among member states. Specifically, it involves the legal fight between “two Dutch herbed cream cheese spread makers,” as Mr. Linnekin relates, “Heksenkaas (‘witches’ cheese’) and Witte Wievenkaas (‘wise women’s cheese’).” The former sued the latter for infringing on “its copyright on the taste of Heksenkaas.”

The case went from a Dutch court to the European Court of Justice, where the Court (Grand Chamber) ruled against Heksenkaas. There can be no copyright on “taste.”

This is of no great significance, I suppose, but in a world where the government gets involved in everything, it’s worth noticing when the government resists its temptation to tempt us.

The rationale for non-​involvement, in this case, was not a move against intellectual property as such, but against the idea of property involved in subjective taste. “The taste of a food product cannot,” the Court determined, “be pinned down with precision and objectivity.…”

Well, sure. But what was really going on here was one company not wanting competition from another company. 

A temptation, for sure. But some temptations (like some cheeses?) must be resisted.

This is Common Sense. I’m Paul Jacob.

 

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Accountability free trade & free markets general freedom national politics & policies privacy subsidy too much government

The Post Office Scam

USPS, Post Office, monopoly, competition, Amazon, discounts

The President of the United States says that the U.S. Postal Service is scamming us by offering shipping discounts to Amazon, the mail-​order giant. “Post Office scam must stop.”

President Trump is hovering in the vicinity of the right idea. But what about government-​required discounts for shippers? Are these scams too?

Congress has long required lower postal rates “for religious, educational, charitable, political and other non-​profit organizations.…”  Robert Shapiro estimates that such mandates cost the agency over a billion dollars a year. The government forces USPS to do a great many things that lose money — things that companies functioning in a free market cannot profitably do. 

And American taxpayers must perennially fork over billions to sustain its lumbering operations. 

It is true that, in markets, buyers of large quantities of a good or service routinely pay less per unit than buyers of small quantities; such discounts can enhance the seller’s bottom line. The fact that USPS offers discounts to a mega-​shipper like Amazon does not in itself show that charging more per parcel would generate more revenue. 

The question is, then, which transactions would flourish if the agency were just another market player instead of a government-​protected, government-​hobbled, government-​subsidized bureaucracy?

Like any government-​run “business,” the Post Office is itself a “scam.” This scam must stop. Phase out USPS as a government agency and let any company deliver first-​class mail to our mailboxes on any honest terms that might attract customers.

This is Common Sense. I’m Paul Jacob.

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folly free trade & free markets general freedom moral hazard nannyism national politics & policies property rights responsibility too much government

What’s the Big Deal?

Standard Oil, monopoly, merger, antitrust, Aetna, CVS Health Corp

Big news: in a $69 billion deal, CVS Health Corp. plans to buy Aetna Inc. The AP story by James F. Peltz says the move “would shake up healthcare industry.”

Should we worry?

Because corporations aren’t cancerous, growth and consolidation are not to be feared as such. 

But speaking of cancerous growths … the federal government will not likely take the news of the merger with the tranquility of a Taoist sage. 

Over at Forbes, last month, Bruce Japsen predicted that the deal wouldn’t go through, arguing that “a full-​blown merger of the healthcare giants would be complicated and unlikely given recent antitrust scrutiny in the sector and given that the drugstore chain is already going into business with an Aetna rival, Anthem.”

Government antitrust to the rescue?

No. We may have been schooled to believe that antitrust “protects competition,” but it has always limited competition, instead. Antitrust was always about fear — of bigness. It was definitely not designed to help consumers. The classic case is the infamous break-​up of Standard Oil, which produced more fuel while lowering prices — even as it grew humongous.* Standard Oil grew because it satisfied consumer demand. Which is what businesses are for. 

And yet government broke it to pieces, using antitrust rationales, for the benefit of some producers, some businesses.

Think of it as crony capitalism in action.

So, my remaining question runs like this: is the CVS/​Aetna merger a response to pure market demand, or as a way to wiggle around insane state and federal regulations?

Health care in America is sick. The merger is not likely the cure. But it would not kill the patient. 

We have government for that.

This is Common Sense. I’m Paul Jacob.

 

* For background, consult the studies of economist Dominick T. Armentano.

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crime and punishment folly free trade & free markets general freedom nannyism national politics & policies responsibility too much government

Serving Consumers? Punish!

Amazon, monopoly, trusts, antitrust, trade, free trade, big business, economic myths

New media ballyhooer Douglas Rushkoff made waves this week. Citing an un-​named friend who went hysterical about Amazon​.com’s purchase of Whole Foods, he asserted that such “unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force.”*

The company has “surely,” he claimed, “reached too far.”

Apparently, serving customers exceptionally well is bad for business.

Yes, he almost totally ignored the pro-​consumer benefits of Amazon. Had to — his case makes no sense when you factor in us consumers. He focused, instead, on Amazon’s success in terms of its recent “online and offline retail sales growth” and its control of 40 percent of cloud storage and streaming services.

He went on to spin a bizarre fantasy about how disruptive bigness is in business. His economically illiterate farrago reminds me of the sad case made against pre-​antitrust Standard Oil, a company which, during the whole time of its growth prior to break-​up, kept on producing more fuel at ever-​decreasing prices.** Broken up because of … fears about how businesses change. And of bigness itself.

As long as consumers are being served, this reaction strikes me as paranoid. When businesses get big (and even near-​monopolistic) and then cease to serve customers, they fail. While serving customers, there is no call for fretting over businesses that move from one success to another  — which is what Rushkoff has the gall to worry about. 

The call for Amazon’s break-​up over-​sells government and necessarily under-​serves consumers.

This is Common Sense. I’m Paul Jacob.

 

* Rushkoff’s piece in Fast Company was the first I heard of such a “call.” Rushkoff is the coiner of the term “media virus” and a sort of populist pusher of market skepticism.

** For the bizarre story of the Standard Oil case, and how it made no economic sense whatsoever, see Dominick T. Armentano, Antitrust: The Case for Repeal (Ludwig von Mises Institute, 1999), p. 41 – 43, and Antitrust and Monopoly (Independent Institute, 1990), pp. 57 – 60.

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Accountability free trade & free markets national politics & policies property rights too much government

Three, Three, Three Mints in One!

monopoly, Microsoft, Google, Chrome, competition, cooperation

Microsoft just announced an innovation that might give folks who fear business behavior — or are extremely skeptical of the positive public outcome of markets — pause.

The Bellevue, Washington, company is adding Google calendar connectivity for its Macintosh users of Outlook 2016.

[Pause.]

You see, monopolies give us the willies. We do not trust them. Yet, despite our fears and suspicions, big business activity in a free market does not lead inevitably to One Corporation Ruling Them All. Or chaos.

Why believe that? This Microsoft Outlook story.

Most folks’ worries about monopoly come down to fear of out-​of-​control competition. In many industries, for the industry to work, there must be general cooperation among competitors. (Think of telephones and electricity distribution, etc.) The reason many people* want to regulate “natural monopolies” is that it seems only natural that businesses would balk at working together on shared standards — they would balk at any form of cooperation … they’re competitors, dagnabbit!

But evidence of competitors cooperating for consumer good is all around us. The classic case? Railroads, when the rail gauges in America were standardized to 4′ 9″ — without government edict.

The current case? This, where one of the three biggest computer outfits in the world offers customers on a competitive platform (Apple) easy syncing with a company that competes directly with it as well as its platform competitor (Google).

Why do this?

The better to serve their customers. As much as Microsoft might want to shun their competitors’ products, its customers do not share that view.

And that is enough.

Welcome to free-​market capitalism.

This is Common Sense. I’m Paul Jacob.**

 

* It is worth noting that economists have a different concern regarding natural monopolies. Something about “cost curves.” Meanwhile, the opposite fear — of cooperation among businesses when cooperation would be generally harmful (price fixing) — has been an issue dealt with by economists since Adam Smith.

** Full disclosure: this came to my attention courtesy of a story on Apple’s News app.

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free trade & free markets too much government

Monopoly Phony

Why is New Jersey Governor Chris Christie against profit?

You expect such an idea from a leftist. The big man is no leftist.

Christie’s anti-​profit bias came up within a long, rambling answer to the subject of a recent bill in the New Jersey legislature to decriminalize possession of small amounts of marijuana. He’s against it. But he’s been for “medical” marijuana. Ed Krayewski of Reason quotes the governor, who insists that legal cannabis distribution “be a hospital-​based program, that way the profit motive is drained out a lot from it.”

I get his logic. He doesn’t want recreational use, but realizes there are legitimate medical uses. To allow the latter but discourage the former, he wants to monopolize the sale of the drug.

It’s the old “monopoly” idea leveraged to discourage over-​use. Post-​Prohibition, many states set up liquor control boards and sold liquor in state-​owned or state-​franchised stores. My state, Virginia, still does. They raised prices on the product, and made it harder to get. More monopoly, higher cost, less product.

But turn the subject on its head.

We want medicine to be cheaper. More accessible and more efficiently delivered.

So why do states limit the setting up of hospitals with hospital boards? Why the prescription system? Why, even, medical licensing? After all, quality controls can be imposed other ways.

Modern medicine has been subjected to monopolistic practices and cartelizing regulations for years. Decades. A century.

Such intervention limits supply and availability, and increases costs.

I suspect that Gov. Christie hasn’t really thought his position all the way through.

(He might be high on government.)

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies responsibility too much government

The Trademark of Irresponsible Politicians

Who doesn’t agree with President Obama? “We simply cannot continue to spend as if deficits don’t have consequences,” he said when introducing his budget in February.

But who believes he’s serious? He went on to say that we must not treat “the hard-​earned tax money of the American people … like Monopoly money.” Yet, by spending at hyper-​deficit levels and offering no reasonable plan to balance the budget, he demonstrates a preference to play Monopoly™, not Responsibility®.

Now, House Budget Committee Chairman Paul Ryan has a plan. He spelled it out Tuesday, giving it a hopeful moniker, “The Path to Prosperity.”

“Prosperity’s Around the Corner” was already taken in the noösphere.

The most salient feature of the plan, though, is that it designed to take its own sweet time. The budget wouldn’t balance next year. Or the year after. Or even in five, like Sen. Rand Paul’s much better plan. 

Besides, today’s Congress can’t control itself must less control future Congresses. That’s the trouble with all these procrastinating plans.

Remember, even Rand Paul thinks his plan takes too long and doesn’t go far enough.

Of course, Obama dislikes Ryan’s plan. The new White House press secretary offers, “The President believes there is a more balanced way to put America on a path to prosperity.”

But he won’t share it with us. Obama and congressional Democrats are playing the oldest game in the book: All talk but no responsibility.

This is Common Sense. I’m Paul Jacob.