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In response to your comments on predatory pricing, as I noted earlier, it's an interesting idea in theory, but it's been rejected by most legal scholars and economists and has little practical value in the real world for a couple of reasons.

First, leaving aside the difficulties with calculating marginal cost, the main hurdle to predatory pricing is, again, free flow of capital. I think the problem with your example is that you assume only one market entrant. Let's assume, for a moment, an established company ("EC") engages in predatory pricing and drives a new entrant from the marketplace (A large assumption, I think, since I'm not aware of any successful real life example of predatory pricing, ever). Now, since EC has suffered losses over an extended period of time due to its predatory pricing tactics, it will have to raise prices to supracompetitive levels in order to recoup those losses. But, whenever EC prices products above competitive levels, capital will again be attracted to the industry and new entrants will appear: it's a vicious cycle that never allows EC to recoup the losses it suffers in a predatory pricing scheme.

Second, assuming that EC is a public company (a pretty safe bet if we assume EC has market power), and assuming that EC decided to pursue a predatory pricing scheme, investors would be intolerant of an extended period of losses--capital would flow out of the industry and in order to continue operations, EC would have to raise prices back to its marginal costs: competitive levels. Even if predatory pricing were possible--and I'm not saying it is--it's just impossible to get millions of investors on the same page. An extended period of losses would drive away investors. It's just not practical.

Second, to address cross-elasticity of demand, I agree that it's certain a company would attempt to price its product just below the point at which people begin to switch to an alternative, but as a business, isn't that the idea? That's the market price; that's the price people are willing to pay for the product.

While I note that you are correct in saying that there are high barriers of entry in the steel industry, there are also alternatives for the product: titanium, aluminum, and scrap metal come immediately to mind. While I recognize these aren't suitable alternatives in every situation, they are in many, and that's the idea.

But again, all these ideas aren't isolated--if a steel monopolist were charging supracompetitive prices, even if below the point at which consumers would seek alternatives, then capital would flow to the industry and new entrants would appear, despite the high barriers to entry that clearly exist in the steel industry.

While I agree that the government does have a purpose and should do things, it does not need to meddle in the marketplace, and it assuredly does not need to pass antitrust laws for the protection of the marketplace; you only need those for redistribution of wealth.

Let’s recap and summarize before continuing the discussion:

We agree (correct me if I am misstating your position, please) on the following:

A. The function of any, and all, governments is the maintenance of social order…

B. Pure libertarians hold that government should be minimized and that government should have only that power necessary to prevent an individual or group of individuals from coercively imposing their will on other individuals or groups …

C. Even pure libertarians agree that some type of government must be called upon to coercively balance individual rights based upon certain principles.

D. [T]he pure libertarian… can only support a constitutionally limited, democratically-elected, republican form of government with certain individual rights immutably and irrevocably enshrined in that constitution…

E. [A] pure libertarian could never support any economic system except capitalism since all others arbitrarily limit the individual’s freedom to engage any commercial enterprise of choice.

Where we disagree (again, correct me if I am misstating your position, please) is the following:

1. Exactly what constitutes an individual or group of individuals coercively imposing their will on other individuals or groups.

It is my position that it is possible for another individual, or group of individuals, to coercively impose their will on other individuals or groups through nominally legal, economic means (as opposed to fraud or force) such as monopolistic practices (or other means such as abusive, expensive litigation as a mere “cost of doing business”).

Based upon the above position, I further maintain that some government proactive, market regulatory actions (although not necessarily those currently existent) are appropriate to prevent such coercive manipulation.

2. Exactly what government actions and principles are appropriate to coercively balance individual rights when they are in conflict.

It is my position that it is appropriate for government to prophylactically establish very limited, procedural safeguards to forestall, as much as possible, the necessity for post coercion, government intervention via judicial dispute resolution. Small businesses cannot easily afford expensive, drawn out litigation and, thus, can be forced by larger competitors who can afford the legal expense (a mere “cost of doing business”) into not pursuing a remedy for a coercive restriction of individual rights.

3. Another area (directly germane to the economic vein) not yet discussed where you may disagree with me is related to the government’s responsibility to provide for the common defense.

It is my position that in order to maintain a strong and diverse industrial base in military equipment essential to national defense, that government may actively interfere in the economy to ensure that essential defensive capabilities are available in time of need. However, it is further my position that the most appropriate means of government intervention is not as a regulatory agent, but as a “customer,” i.e., by contracting with a variety of firms to provide the requisite equipment even at the expense of not necessarily, always choosing the “lowest bidder.”

4. Yet another area (indirectly germane to the economic vein) where some other posters (and possibly you) have disagreed with a position of mine is that government must actively discourage hallucinogenic and narcotic drugs.

I hold that a certain, significant percentage of the population must, of necessity, be economically “productive” or the entire population, figuratively, or perhaps, literally, “starves” and the “society” collapses or becomes too weak to resist active take-over by a competing, non-libertarian society. In the interest of justice and common sense, it is inappropriate for the government to intentionally not act in this area until a certain, critical percentage of the population has become non-productive. There are two reasons for this position. First, addiction once it occurs is difficult if not impossible to reverse for a large number of citizens. Thus the productivity problem is not solved. Second, it is intuitively unjust to let some people engage in such activity, but when the percentage becomes too high, to arbitrarily out law the activity. Therefore, for the sake of common sense, it must discouraged consistently.

5. Another area (not directly germane to the economic vein) where some other posters (and possibly you) have disagreed with a position of mine is that government must proactively prevent nominally libertarian activities which threaten to dissolve the society which, otherwise, supports a libertarian system.

It is my position that government must actively discourage gay marriage (nominally an individual liberty choice) because the practice weakens the heterosexual family unit and thus, potentially causes the collapse of the “society” in which the libertarian would exist.