That's patently false. AT&T was a monopoly and they were broken up by antitrust regulation. The absolute most you can say is that some regulations enable monopoly. I contend that we simply should pass the good kind of regulations instead.
Monopoly is enabled by market forces such as economies of scale. Monopolization is a natural market process which happens on its own unless it is actively prevented.
> big pharma loves high regulatory barriers because it keeps competitors out
The FDA, for all the flaws of its current incarnation, is the archetype of necessary regulation. Pre-FDA, the free market did nothing whatsoever to prevent nauseating practices like the adulteration of milk with powdered plaster, lead, and cow brains. The history there is fun but quite gross.
> Somalia
What is notable about Somalia is not its lack of regulation, but the fact that it is perhaps THE least stable country on the planet. It is not the basis for any useful comparison here.
>That's patently false. AT&T was a monopoly and they were broken up by antitrust regulation.
This is patently false in the context of the reply you have made -- after the invention of the telephone more and more and eventually hundreds of telephone services popped up. Then in 1918 (circa WWI), the government effectively quasi-nationalized AT&T by controlling it via a commission and the postmaster general and then AT&T leveraged politicians to create "universal telephone service" provided by AT&T and regulate competitors out of the market while using regulatory capture to use commissions to regulate rates, effectively creating a cartel that drove competitors out of business via regulation.
the whole idea of a "natural market process" here is absolute and utter hogwash. The majority of the market was AT&T competitor up until the regulators stepped in and turned it into an unnatural monopoly enforced by regulatory capture.
>The FDA, for all the flaws of its current incarnation, is the archetype of necessary regulation. Pre-FDA, the free market did nothing whatsoever to prevent nauseating practices like the adulteration of milk with powdered plaster, lead, and cow brains. The history there is fun but quite gross.
You're now arguing why we need regulation rather than whether they create monopolies or not. I see this as a complete red herring, although an interesting topic, that there are some counterpoints to.
> What is notable about Somalia is not its lack of regulation, but the fact that it is perhaps THE least stable country on the planet. It is not the basis for any useful comparison here.
What is notable is that the whole thesis is without regulation it turns into this monopolized hellscape and every inspection of that theory turns out to be false, and sometimes even the opposite.
Anyway, what regulation is responsible for Walmart and Amazon putting local retailers out of business?
> the government effectively quasi-nationalized AT&T
After a big merger put AT&T in charge of the majority of telephone lines in the US, the company used its control over infrastructure to drive its competitors out of business and increase its portfolio. The Justice Department tried to break up AT&T but failed; it was in the settlement of this case that AT&T was first federally regulated in 1913. Yes, AT&T's monopoly grew between 1913 and 1982, but your causality is backwards. They regulated it because it was already a monopoly.
>Anyway, what regulation is responsible for Walmart and Amazon putting local retailers out of business?
Walmart + Amazon combined are only ~16% of the retail business. They're not monopolies. The fact they put a small minority of businesses out of business does not mean they're a monopoly. This is likely part efficiencies and also part regulatory capture via the insane zoning/building regulations in this country and tax breaks that can favor large corporations.
> After a big merger put AT&T in charge of the majority of telephone lines in the US, the company used its control over infrastructure to drive its competitors out of business and increase its portfolio. The Justice Department tried to break up AT&T but failed; it was in the settlement of this case that AT&T was first federally regulated in 1913. Yes, AT&T's monopoly grew between 1913 and 1982, but your causality is backwards. They regulated it because it was already a monopoly.
... It was not already a monopoly. Hundreds of phone companies emerged and by shortly before your noted date of "regulation" those competitors held the majority market share. It became a "monopoly" after the government literally quasi-nationalized them (AT&T) to the point the fucking Postmaster General was basically in charge of it, they became intertwined with regulators, and then the drive for "universal telephone service" and regulatory commissions ensured the regulatory compliance pushed exactly into AT&Ts business model. AT&T intertwined lawmakers even brought in economics quacks to talk up natural monopolies to argue for policies to create the regulations that made AT&T a monopoly. So you have it backwards -- the regulated it from a minority market holder to an unnatural monopoly and lawmakers created this monopoly under the auspices they essentially needed to legislate a "natural" (misnomer) monopoly into existence.
> Walmart + Amazon combined are only ~16% of the retail business.
of ALL RETAIL? That includes groceries! That's huge! Anyway, Amazon is >40% of e-commerce & Walmart is >10%. Together they control more than half of all online commerce. That's definitely monopolistic.
> It was not already a monopoly. […] shortly before your noted date of "regulation" those competitors held the majority market share
From Wikipedia: "AT&T controlled over 80% of the U.S. telephone system market by 1907 and Theodore Newton Vail rejoined the company as its President. Vail negotiated with competitors, charging them fees for connecting to AT&T's long-distance network. These practices led the Justice Department to attempt to breakup AT&T, but a settlement was reached through the Kingsbury Commitment on December 13, 1913. It brought federal oversight into AT&T and led its Bell System monopoly to become federally regulated."
They had an 80% market share pre-regulation. Yes, it was already a monopoly.
>They had an 80% market share pre-regulation. Yes, it was already a monopoly.
Absolute and utter hogwash -- a straight up lie. You must be using a very liberal version of 'control.'
After seventeen years of monopoly*, the United States had a limited telephone system of 270,000 phones concentrated in the centers of the cities, with service generally unavailable in the outlying areas. After thirteen years of competition**, the United States had an extensive system of six million telephones, almost evenly divided between Bell and the independents, with service available practically anywhere in the country.[1]
* My note, under the government imposed patent monopoly period -- Bell's patent expired in the 1894 which started the "years of competition." **13 years of competition marks 1907.
That is, by 1907, the market had dropped from a patent imposed monopoly to half-and-half, and getting shredded further by competition (that is until regulation in 1913, when AT&T started to pick up market share again). This 80% quote is total fiction unless you're using some weasel version of 'control.' The monopolies were all government imposed -- first by the patent and then later by regulation ('universal telephone service' reguluation and commissions and franchises, also ~nationalization and government intervention circa WWI).
Also of interesting note -- to look at the ownership of telephones before and after the Kingsbury committment. They had been falling off a cliff after the patent expired, but then ramped up at pretty much the same time as the Kingsbury Commitment (minima at 1910, with what looks to be 5 year granularity).[2]
>of ALL RETAIL? That includes groceries! That's huge! Anyway, Amazon is >40% of e-commerce & Walmart is >10%. Together they control more than half of all online commerce. That's definitely monopolistic.
And 100% of business with an Amazon logo on it! Amazon has 40% of e-commerce, walmart has 6%, even together they are a minority. Even with all the efficiencies of Amazon logistics they still together can't break half of the market. And even if they did, their margins are so razor thin that they could not engage in monopolistic behavior, as the second they raise prices they can again be eaten alive by the other 54% or one another.
That's patently false. AT&T was a monopoly and they were broken up by antitrust regulation. The absolute most you can say is that some regulations enable monopoly. I contend that we simply should pass the good kind of regulations instead.
Monopoly is enabled by market forces such as economies of scale. Monopolization is a natural market process which happens on its own unless it is actively prevented.
> big pharma loves high regulatory barriers because it keeps competitors out
The FDA, for all the flaws of its current incarnation, is the archetype of necessary regulation. Pre-FDA, the free market did nothing whatsoever to prevent nauseating practices like the adulteration of milk with powdered plaster, lead, and cow brains. The history there is fun but quite gross.
> Somalia
What is notable about Somalia is not its lack of regulation, but the fact that it is perhaps THE least stable country on the planet. It is not the basis for any useful comparison here.