Comment by jack_h | Hacker News Reader

Comment by jack_h | Hacker News Reader

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I didn’t miss their point, I challenged the foundation upon which it rested.

You are asserting that a free market is unstable and will inevitably lead to a monopoly. Even if I take this as a fact for the sake of argument, it doesn’t nullify my point that judging the intention of political action (antitrust laws to prevent monopolies) against the outcomes of a system (free markets devolve into monopolies) is comparing apples to oranges. You must judge the outcomes of both systems. As I stated in my original reply, regulations can actually lead to monopolies, so the outcomes matter a lot more than their good intentions.

If I don’t take your assertion as a fact though[1], then what you’re doing is judging what you believe to be the outcome of a free market with what you believe will prevent that through legislation. This is entirely too theoretical and doesn’t even begin to answer which is a better system. Ultimately we need to understand the actual trade-offs that are being made between these systems in order to select the system with the most desirable characteristics.

[1] It is not at all proven that a free market will naturally devolve into a monopoly. This has been a contentious debate in economics for centuries and is absolutely not resolved. People tend to assume a static market and extrapolate into the infinite future, e.g. if a horse drawn carriage manufacturer has 99% market share then will it forever be a monopoly in a broken system or will a fledgling automotive industry dethrone this “monopoly” with a better alternative that is not even a direct competitor? This is a really, really deep subject in either case.

> You are asserting that a free market is unstable and will inevitably lead to a monopoly.

No, I am not asserting that.

I think the first thing to clear up is our definitions. My main point would be that a market that is controlled by a monopoly is not a free market. I would define a free market not as a market that is free from government interference, but a market in which all of the actors are free to participate on a fair competitive playing field.

I think that lassaiz-faire, with the meaning of "hands off" may be a more precise way to describe what you are saying when you say "free market".

I think that a fair competitive landscape is ultimately what we want out of markets. I agree that it is bad when government actions interfere with a fair competitive landscape. But it is not inevitable that all goverment actions will do that, and in many cases government action can help rather than hurt. And similarly, plenty of actions by non-government actors can interfere with a fair competitive landscape as well.

> a market that is controlled by a monopoly is not a free market.

In other words, the thing you are talking about _does not exist_ except in libertarian fantasies. Without a government (the monopoly on force in a region, that controls the markets within) providing the backbone for this - i.e. with features such as courts, police, mint - there is no freedom, because an aggrieved party has no recourse other than violence.

> It is not at all proven that a free market will naturally devolve into a monopoly.

I think it comes down to the category of item being offered in the market. Some things naturally lend themselves to monopolies; it feels like perhaps it's based on factors like the difficulty of entering the market with a new product at all, the amount of coordination and manpower required to field it, and the cost efficiencies of having a singular producer vs. many.

There are certainly cases where we see duopolies or triopolies etc. where one really-well-run company might be more efficient, from a labour standpoint; but then, in turn, we all benefit from having a redundant array of supply chains.

There are other cases where we absolutely want a monopoly, such as with policing, or (in many countries) with healthcare, because they apply to everyone and being a consumer of the service is not exactly optional.

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