On Dec 5, 2004, at 1:26 PM, Lee Einer wrote:
> This IS an interesting discussion.
It is
> As far as the market liking good stuff, though, it's not as simple as
> that. The market gravitates towards monopoly, as economic power
> centralizes and consolidates.
Some markets gravitate toward monopoly. Some don't. It depends on the
production function and the size of the market.
> Thus, while we have a proliferation of labels in the average food
> store, you would likely be astonished if you followed those labels up
> the food chain in any given category , to find out that they are all
> owned by the same few mega-corporations such as Beatrice Foods and
> Nestle.
Yes, food processing may be a natural monopoly or a natural oligopoly.
> The situation is the same with the recording industries and the media-
> we are actually only dealing with a small number of mega-corporations
> controlling the entire market.
The situation is entirely different in one respect. Natural monopolies
are not regulatory monopolies. If I want to blend some breakfast cereal
from Kellogg's with some from Post, call the result Chris' Breakfast
blend, and give it away to my friends, nobody is going to sue me.
> When this happens, there is no real or meaningful competition- Adam
> Smith's invisible hand gleefully flips us the bird, and the quality of
> goods trends toward decline with no corresponding decrease in price.
> This is the situation which we see now with the recording industry.
> There is no significant competition, so there is no pressure on the
> music industry to find the next Dylan or Hendrix. They control the
> airwaves, and they produce the music. We will buy it because it is
> what they sell, and because there is no commercially available
> alternative. Any significant competition which does crop up must
> inevitably start small, and will, barring the miraculous, be pounded
> into oblivion by the superior economic might of the monopolies.
The effect may be the same. Monopolists behave like monopolists whether
they have their by virtue of natural barriers to entry in their
industry or legal one but the cause is different.
---
Seven Deadly Sins? I thought it was a to-do list!
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