OUR unemployment rate

[LEDO]

Perhaps Adrian if you could show us an example where a monopoly was actually good and worked for the benefit of the consumer. That might help.

[Tiberius]

I suspect any example I give will be rejected because it is "no longer a monopoly" or doesn't conform to your standard of what a monopoly is. I will say in advance that most, if not all monopolies these days do not exist as true "monopolies" anymore because of government intervention.

Two examples comes to mind. Dyson have had a monopoly on dual cyclone vacuum cleaners ever since they invented and patented the technology. They sell them for affordable prices, and their vacuum cleaners are more effective at picking up dust than bagged ones.

The other example of a good monopoly is almost kind of abstract. The Patenting System gives exclusive rights for the inventor of a technology to sell their invention for 20 years. The reason this is a good idea is that it encourages new development of technology. What is the point of a person spending hours of time, thousands of dollars, etc on developing a new technology if anyone can go and copy it and make a profit on it.

[Frank]

I suspect any example I give will be rejected because it is "no longer a monopoly" or doesn't conform to your standard of what a monopoly is. I will say in advance that most, if not all monopolies these days do not exist as true "monopolies" anymore because of government intervention.

Two examples comes to mind. Dyson have had a monopoly on dual cyclone vacuum cleaners ever since they invented and patented the technology. They sell them for affordable prices, and their vacuum cleaners are more effective at picking up dust than bagged ones.

The other example of a good monopoly is almost kind of abstract. The Patenting System gives exclusive rights for the inventor of a technology to sell their invention for 20 years. The reason this is a good idea is that it encourages new development of technology. What is the point of a person spending hours of time, thousands of dollars, etc on developing a new technology if anyone can go and copy it and make a profit on it.

What about MS Windows? Sure, strictly speaking there is Mac, and other operating systems; but Windows holds something like 80% (or perhaps more) of the market. Yet I think Microsoft, like Dyson, has sufficient competition from other sources to prevent price gouging (unlike say AT&T b4 they were broken up, although one could argue the threat of government intervention was a deterrent, IMO the results speak for themselves and provide us with some empirical data). AT&T was a classical monopoly (both a vertical and horizontal monopoly). Since their break up the communications industry has had explosive growth, heated price competition, an explosion of new technology, etc. Obviously there's inherent limitations in relying on a single example to sell the idea that monopolies are bad - nonetheless it does give us at least some indication that monopolies like AT&T are generally a poor economic model.

[Tiberius]

My point about monopolies was that they can be good. Sure, not all of them will be, and I think Microsoft are a good example of that, but that doesn't stop Dyson from having a monopoly on vacuum cleaners (in the UK at least) and still being an innovative and consumer-friendly company.

The reason I didn't pick Microsoft as an example of a "good" monopoly is twofold:

1) I suspected people would argue that they aren't technically a monopoly, since there are other Operating Systems (although I think they do have 90% of the market).
2) I do not regard them as an example of a "good" monopoly. They have used anti-free market tactics in order to get where they are; namely the forced install of Windows onto computers and laptops. There are few computer companies where you can request a computer without Windows pre-installed on it, although I am glad that this number is increasing (and Dell have done the whole Linux laptop thing).

[theblindferrengi]

I suspect any example I give will be rejected because it is "no longer a monopoly" or doesn't conform to your standard of what a monopoly is. I will say in advance that most, if not all monopolies these days do not exist as true "monopolies" anymore because of government intervention.

Two examples comes to mind. Dyson have had a monopoly on dual cyclone vacuum cleaners ever since they invented and patented the technology. They sell them for affordable prices, and their vacuum cleaners are more effective at picking up dust than bagged ones.

The other example of a good monopoly is almost kind of abstract. The Patenting System gives exclusive rights for the inventor of a technology to sell their invention for 20 years. The reason this is a good idea is that it encourages new development of technology. What is the point of a person spending hours of time, thousands of dollars, etc on developing a new technology if anyone can go and copy it and make a profit on it.

A monopoly can function within reason, but, by definition, there is no reason for it to. Dyson vacuum cleaners had a monopoly on a category of the vacuum market, and their machines were severly overpriced ($500-$600 USD each, more than twice the normal vacuum, and well out of the range for the average consumer). Since, the Hoover company and the Shark company have produced models of those no-loss-of-suction cleaners and have been selling them for reasonable prices (~$150-300 USD). This monopoly is innefective, as people can always buy regular vacuum cleaners, thus nullifying any advantage Dyson had.

The patent system was created as an incentive for inventers as you say, and could create a monopoly, but for the patent holder to sell the rights to a product to only one manufactuer/retailer would be counter productive to sales, and therefore not in the best interest of the patent holder.

If a monopoly did become large and problematic, then there are several things that could be done, for example, if Folgers suddenly had every coffee bean in the world at its disposal, then the other coffee companies could buy as much coffee as they could afford to buy from Folgers, but not sell any of it. Folgers would still have to meet the demand of the consumers, but would have less coffee to meet it with, so the price would go up; and to stretch the supply out, the quality would go down. The consumers would be pissed off by this and stop buying. This would leave an enourmous opening for the other coffee companies who stockpiled the coffee.

Though Microsoft is not a true monopoly, it does display some negative trends of monopolies, such as price gouging and inferior products, but because of this they have lost consumers to Apple, and others.

As for true monopolies, how about the government? Sure they arent a company, but without competition to keep them in check, that just leaves the people, and the people will not fare as well as a competing organization would.

What actual monopolies there are (and they are) work behind the scenes, and are not well known. They often own multiple companies that do the same thing so they can create the illusion of competition while still being in control. You have probably heard of some of the television companies owned by Viacom (CBS, MTV, Paramount, etc.) as they are advertised, but the parent company does not publicize itself well. Some other examples of this are Kraft Foods owns more than 60 brands including Oreo, Maxrell House, and Oscar Meyer; and Nestle, which owns Cherios, Hot Pockets, Alpo dogfood and more than 50 other brands.

[Frank]

My point about monopolies was that they can be good. Sure, not all of them will be, and I think Microsoft are a good example of that, but that doesn't stop Dyson from having a monopoly on vacuum cleaners (in the UK at least) and still being an innovative and consumer-friendly company.

The reason I didn't pick Microsoft as an example of a "good" monopoly is twofold:

1) I suspected people would argue that they aren't technically a monopoly, since there are other Operating Systems (although I think they do have 90% of the market).
2) I do not regard them as an example of a "good" monopoly. They have used anti-free market tactics in order to get where they are; namely the forced install of Windows onto computers and laptops. There are few computer companies where you can request a computer without Windows pre-installed on it, although I am glad that this number is increasing (and Dell have done the whole Linux laptop thing).

Arguably socialism also creates a monopoly (the state). I think though economists would say rational calculation is impeded by a monopoly (just as it becomes impossible in a socialist state, because calculation requires the markets setting prices, monopolies are able to manipulate their own prices, and therefore act to skew market pricing).

Rational calculation involves the ability to understand demand, allocate resources, etc. The more market participants there are, the better the market is able to respond to demand and allocate resources to meet it. I'm not an economist so I really can't elaborate beyond that (and I'm pretty sure there's good arguments both ways, I have a few friends who are economists and I know they disagree on this issue; but I'm a lawyer not an economist ... although it's a very interesting topic).

I'm on the side generally against the idea of monopolies (but I imagine it might be a more efficient framework under certain "rare" circumstances).

[LEDO]

I remember when ATT was the only phone company and everyone got raped on long distance charges. It wasn't until they busted up ATT that prices went down. Imagine what the price of using a cell phone would be if one company ran the operation.

[theblindferrengi]

But back then cell phones were big gizmos that nobody had unless they were rich, or worked for a company that would pay for it.

[Oldandeasilyconfused]

Cell phones?

Try LAN phones.

My dad grew up in the 1920's and 30's.They had a phone. My grandfather was the local copper.The government paid for the phone,the only one in the neighbourhood.

We got our phone when I was 12. Dad's company paid for it. Only one of my friend's family also had a phone.

In the 90's it seemed to me that the only people who had cell phones were some people at work,paid for by the department,and our clients, the unemployed. None of my friends had one. I bought my cell phone in 2008. It's prepaid (Nokia) and is a phone which can also send texts. I've used it 5 times. I hate fucking cell phones.

[tavarish]

Cell phones?

Try LAN phones.

My dad grew up in the 1920's and 30's.They had a phone. My grandfather was the local copper.The government paid for the phone,the only one in the neighbourhood.

We got our phone when I was 12. Dad's company paid for it. Only one of my friend's family also had a phone.

In the 90's it seemed to me that the only people who had cell phones were some people at work,paid for by the department,and our clients, the unemployed. None of my friends had one. I bought my cell phone in 2008. It's prepaid (Nokia) and is a phone which can also send texts. I've used it 5 times. I hate fucking cell phones.

You want those new sneakers?

When I was little, we didn't have feet.