Mises' Jeff Riggenbach shreds the Zeitgeist movement (sort of)

[Zhwazi]

Your definition of monopoly is an implication of my definition, however I don't believe that's how most people understand it. That is something monopolies frequently do, but it isn't the definition of a monopoly. Here's what Wikipedia says, it brings in both our points but first mentions having control which is prerequisite for the rest of it:

In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. (This is in contrast to a monopsony which relates to a single entity's control over a market to purchase a good or service, and contrasted with oligopoly where a few entities exert considerable influence over an industry)[1][clarification needed] Monopolies are thus characterised by a lack of economic competition to produce the good or service and a lack of viable substitute goods.[2] The verb "monopolise" refers to the process by which a firm gains persistently greater market share than what is expected under perfect competition.

The concept of power I use is very general because power can be converted between violent power, purchasing power, and other forms of power. Monopoly is a form of power.

I do not consider success to be an overstep or abuse of power. However persistently high profits of a company when it should be fully possible for competitors to enter the field and bring the price down can be seen as a symptom of centralized power being protected, and it will look like success to a casual observer. Power is being abused, but it isn't necessarily the power of governments.

Also you don't need to explain very basic economics concepts to me. I understand the forces that act against monopolies, it was made pretty clear in economics class and again when I was studying Austrian economics. How do they happen anyway? By non-market forces. Not by government necessarily. In fact the existence of government is a good demonstration of the failure of the forces destructive to monopoly to do their thing adequately to prevent monopoly.

I want to suggest that capitalism (as I use the word) is not inherently reliant on the state to supply the force needed to perpetuate its monopolistic system. Consider how government used to rely on religion for the massive lies needed to maintain appearance of legitimacy, but no longer does. How would you know by looking at an exploitive system like government or capitalism if it is self-sustaining before the final test of the real world? If we did away with government today for instance, and had alternative market-based systems of justice, would the centralized powers be able to continue growing? It would be a setback and they'd have to adjust the way they do certain things to deal with the new system, but they may be able to continue the exploitative systems they've got going for them. Capital big enough to employ force has the resources needed to hide itself from responsibility for the force that they use. What do you think, is corporate-capitalism entirely a byproduct of the state and still fully reliant on it, or would it be able to stand up and learn walk on its own two feet without it?

[LTKoblinsky]

I only had time to skim, and have come to the conclusion that our observations are the same. We are both troubled by the crony system that encourages inefficiency and corruption. The problem is that this a system of mercantilism, or a mixed market (I think that may be the word you were looking for earlier), and not capitalism. DO I think the size and scope of many of the larger companies that exist today would be diminished without the current government? Yes. Do I think this is an indictment of private ownership of enterprise? No.

[Zhwazi]

Not alone for a single iteration, no, but it's a self-feeding process. The existence of mass producers necessitates the existence of mass suppliers and mass markets, and the more massive any one of them is, the more massive the others must become. If you have a mass market (for instance, a government in a war needs food, oil, vehicles, and explosives in large amounts), you need mass producers. For mass producers, you need mass suppliers of the raw materials. They in turn need mass suppliers for their own raw inputs. And when it eventually turns out that there actually *isn't* a mass market, there's a crash. The crash is the best illustration of how it works because it happens more suddenly. A couple major producers cut staff and capital because they can't sustain their output profitably without a market to sink it all into as they thought there would be. Their suppliers then have to cut staff as well, as do theirs, and in turn theirs. Then there's less employment and less consumption, leading to a further worsening of the situation. Austrian business cycle theory is basically the financial aspect of this.

The entire mass production/consumption economy is a symptom of the problem and a problem unto itself.

All I'm saying is that it's more efficient in the long run to produce things at small scales for local or small markets with general-purpose tools. It may not be more efficient strictly in per-unit cost, but it cuts out most management and most distribution overhead and makes it easier to repurpose to rapidly changing needs when those needs arise, and reduces any incentive to overproduce things people don't want in those quantities thinking you'll recoup the costs of overcapitalizing with reduced unit costs.

I recognize the ways that firms and mass production can be more efficient, but do not believe that those factors have as great an effect as you probably do. As long as you also recognize the ways small-scale production can be advantageous, and disagree with my belief at how influential those factors are on the market, we're close enough to being on the same page for my own contentment.

If you disagree with the reasoning however, I'd prefer to keep discussing it until I learn of any major flaws in what I believe.

[LTKoblinsky]

Not alone for a single iteration, no, but it's a self-feeding process. The existence of mass producers necessitates the existence of mass suppliers and mass markets, and the more massive any one of them is, the more massive the others must become. If you have a mass market (for instance, a government in a war needs food, oil, vehicles, and explosives in large amounts), you need mass producers. For mass producers, you need mass suppliers of the raw materials. They in turn need mass suppliers for their own raw inputs. And when it eventually turns out that there actually *isn't* a mass market, there's a crash. The crash is the best illustration of how it works because it happens more suddenly. A couple major producers cut staff and capital because they can't sustain their output profitably without a market to sink it all into as they thought there would be. Their suppliers then have to cut staff as well, as do theirs, and in turn theirs. Then there's less employment and less consumption, leading to a further worsening of the situation. Austrian business cycle theory is basically the financial aspect of this.

The entire mass production/consumption economy is a symptom of the problem and a problem unto itself.

All I'm saying is that it's more efficient in the long run to produce things at small scales for local or small markets with general-purpose tools. It may not be more efficient strictly in per-unit cost, but it cuts out most management and most distribution overhead and makes it easier to repurpose to rapidly changing needs when those needs arise, and reduces any incentive to overproduce things people don't want in those quantities thinking you'll recoup the costs of overcapitalizing with reduced unit costs.

I recognize the ways that firms and mass production can be more efficient, but do not believe that those factors have as great an effect as you probably do. As long as you also recognize the ways small-scale production can be advantageous, and disagree with my belief at how influential those factors are on the market, we're close enough to being on the same page for my own contentment.

If you disagree with the reasoning however, I'd prefer to keep discussing it until I learn of any major flaws in what I believe.

OK, so we both agree that there is a diseconomy of scale at some, but disagree on where that point is. I currently work at a small-scale plant pushing to become large-scale. As we lower cost/unit, we become more profitable, more flexible (more means of production means splitting part of it off for another order is less costly than before), and more efficient. So far, everyone has benefited from it.

I can also tell you that the tax structure makes expansion difficult and government regulation inhibits efficiency. So, to me, the effect you speak of (government pushing businesses larger and larger) goes both ways.

[Zhwazi]

It presses in both directions, and it's easy to point out the direction of the effect of each forcing factor but not necessarily how strong it is, or how these effects scale to the size of a business. The main factors I'm concerned with are more about the effects on the structure of business market-wide than how any particular one of them conducts business. Obviously how they conduct business individually is the mechanism, but I'm looking at cause and effect through these emergent processes and not so much at the processes. The effects I'm talking about with distribution costs being exponential and management overhead growing quickly as well, affect other businesses just as much, but the reasons why the distribution costs are being hidden for example show why it seems that bigger is always better and becoming larger means becoming more profitable.

The example of the company you work for doesn't demonstrate for or against anything I'm saying, it's the mechanism working both as you say (economy of scale still in effect at that level) and as I say (diseconomy of scale artificially lowered making growing larger look more attractive than otherwise), they both have the same net effect no matter who is right. There's a good chance we both are and it's like I said before a question of degree of how much effect each contributing factor has, that we just can't test for an answer to.