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To: discostu; Havoc
Command economies aren't cartels, they're government run industries. Again look at Amtrak, their chairman gets to go to congress and beg for money be given half of what he needs and is told to find a way to make it work without reducing service or increasing fair...

There are utilities which are automatically cartels. Public transport is like a utility in that they are necessities which everyone uses and which the public as a consequence demands supervision over. The public will not permit private interests to, say, quadruple the train fare or the water bill because as a practical matter the entry cost of the industry is so high that competition is practically impossible. Can private investors lay new sewer lines ? Isn't the cost of massive infrastructure investment so high (the Brooklyn Bridge, subway systems, commuter rail, sewer systems, etc) that the taxpayer is the final guarantor ? So since the taxpayer was the underwriter, the taxpayer will be the determiner of what a "fair" profit is.

There's a myth that the top players in industries have a live and let live understanding, but it's a myth. Competition is fierce in almost every industry, if a business isn't expanding then it's probably shrinking, the business cycle is not condusive to a company sitting on a plateau, the only way for a business to expand is to take business away from somebody else.

Even in war there are hot sectors where combat is intense and vast quiet sectors of little or no activity. You can't spread out your armor and aircraft carriers everywhere. They are concentrated on key objectives. Competition for competition's sake is wasteful. Plateau ? Technology plateaus. When it does competition drops as now. The breakneck technological change of the 80's and 90's in personal computers saw feverish competition that did in Wang, Digital Equipment Corp, Ashton-Tate, Osborne, Timex, CP/M, Wordperfect, Dbase, Clipper, etc. Now it has stabilized because the marketplace has settled on a standard and X86 technology has plateaued. You see, the tendency is inevitably towards cartels because cartels enforce technological standards and the marketplace wants technological standards, be it in word processors, DVD recording formats, VCR tape formats, or operating systems. The marketplace wanted first IBM and then Microsoft to determine the technological standards. People want to invest in developing software that they know will still be supported 8 years from now. If I came up with a fantastic new X86 operating system the marketplace would not want it because they are not going to invest in something that major players will not support. Nobody wants orphan production software.

It is almost like the progression of history where states are created by warlords on horseback and consolidated by bureaucrats. Businesses are created in the "heroic age" of the industry by entrepeneurs on horseback and managed a generation later by bureaucrats who are risk minimizers.

790 posted on 04/16/2004 10:14:57 AM PDT by Sam the Sham
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To: Sam the Sham
No utilities are usually monopolies, it's very rare for there to be any real competition between them where you live determines who gives you your service.

Public transportation depends on where you live. I haven't used a form of it in 15 years and have no intentions of ever going back, Tucson is too spread out for public transportation to be even useful much less necessary. And again these are monopolies not cartels, and as such have a LOT of additional regulation they have to put up with (like not being able to set their own rates and having minimum service standards they must maintain or lose their permission).

Actually yes private investors can lay new sewer line, in fact in most places if you're adding a new dwelling to a piece of land it's your job to lay all the line necessary to hook it to the main system.

Roads and bridges have nothing to do with this. Transportation infrastructure is one of the duties of government as laid out in the constitution. It's niether a cartel nor a monopoly, it's the government doing it's job (though not very well when you look at the potholes... always a great argument against socialized medicine).

Competition isn't for competition's sake it's for survival. As anyone that's watch western history knows it is the natural tendancy of bureaucracies to grow, this is just as true in the corporate world as it is in the alphabet soup of American government. As bureaucracy grows it increases a companies costs, both by adding people and by making them less productive on a man hour basis. When your costs are increasing you've got to find a way to increase revenue, raising prices isn't always a good way to do it, so that leave expansion, which causes competition. A company whose costs are constantly rising and whose revenue is not growing is a company that's going out of business.

Technology hasn't plateaud at all. The X86 chip might have the majority of the market but there's still plenty of competition, check out Solaris and Mac, then there's AMD making high quality clones of hte X86. And of course within the market that sells X86 based computers there are literally DOZENS of manufacturers all competing with each other, just check out BestBuy http://www.bestbuy.com/site/olspage.jsp?id=cat01172&type=category and they don't even carry a major percentage of the brands available.

No the tendancy is towards competition. Remember when there were only 3 automanufacturer in America? Whatever happened to the Big 3? What happened was they got lazy. Standardization can and does happen with competion, desks are all the same basic height yet there are hundreds of companies making them. The growth of Linux and an OS on the X86 chip proves your wrong about there being no room in that marketplace. Cartels and monopolies happen, but the inevitably go away to, that's the natural flow of business. Hartz Mountain was the king of pet supplies for 20 year, now where are they? AT&T owned the entire phonesystem of America for decades, how many long distance companies are there now (some of whom starte BEFORE AT&T was broken up). The Big 3 are now in cut throat competition with at least 4 other car companies.

You got that last paragraph right, but you didn't carry it to the next step: once risk averse bureaucrats take over the company is now ripe for attack and new competition is almost inevitable. That's the natural cycle: start as something new and exciting, become king of the hill, get lazy, get replaced.
791 posted on 04/16/2004 10:57:41 AM PDT by discostu (Brick urgently required, must be thick and well kept)
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