From: John Clark (jonkc@worldnet.att.net)
Date: Sun Jun 17 2001 - 09:00:29 MDT
free markets
Smigrodzki, Rafal Wrote:
> At some point growth stops being good - if there is just one huge company remaining after a free market shakeout, it becomes a de facto government. Free market dies
Why? Suppose I make 99% of the world's widgets and you make 1%, How does that put you at a disadvantage? How could I put you out of business? The only way is if I am more efficient than you, and if so then you should go out of business.
>Yes, companies kill too - whenever they can get away with it.
All the evil companies have committed from the stone age to today amounts to little come than mischief compared to the horror perpetrated by governments.
>Standard Oil owned too much of the oil fields, refineries, and distribution chain to be threatened by almost anybody
That is an urban myth, the company's strength was in refining and distribution, it never controlled a significant number of oil fields. The truth is that standard Oil was started in 1874 and in that year the average price of kerosene was 23.5 cents a gallon. After 20 years of improved efficiency and "usurious" practices it was at the height of its power and the company still made a healthy profit, but in 1894 kerosene, its principal product, sold for 7.5 cents a gallon.
Far from driving their competitors out of business every one of the people who ran crying to the government and later testified that Standard Oil's predatory tactics made competition impossible, nevertheless somehow managed to amass huge fortunes competing with Standard Oil. Take David P Reighard for example, when Standard Oil threatened to lower the price so much that he would lose money on every gallon he sold, Reighard called their bluff, he knew Standard oil sold a lot more gallons of oil than he did, and so would lose a lot more money than he would if they tried to do that. Standard Oil realized that the only way to stop Reighard was to buy him out, which they did, at a huge profit to Reighard. What did he do with all that money? He built an even larger oil refinery of course. Standard felt they had to buy that one too, at an even larger profit to Reighard. Are you starting to see a pattern here? In all Reighard did this 3 times before Standard caught on and gave up, making him one of the riches men in the country.
>Our present taxes punish cleverness - I am taxed whenever I make money, but not when I lose it
No argument. You won't hear me defending our tax system.
>A jetliner could be made by a large network of semi-independent contractors, under the quality control system of a brand name, which would buy results of R&D from yet other groups of contractors.
There is an old saying that a camel is a horse designed by a committee. Boeing already uses thousands of subcontractors when they make a 747, but somebody has to get the financing to pay those contractors and make long term deals with them, and somebody has to do the R&D, and somebody has to decide to go with this design and not that design, and somebody has to give the basic go or no go to the entire thing. Mom and pop can not do none of these things.
John K Clark jonkc@att.net
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