Stand back, I'll handle this

A commenter at Maggie's Farm nailed socialism, the system that correctly identifies capitalism as so effective that only the experts can be allowed to operate it:
The left wants socialism which of course still must depend on capitalism but where only the state gets to practice capitalism.


J Melcher said...

Well to be fair, capitalists want the state to secure, for them, a monopoly or at least restricted-entry-market in which profits flow to the private investors and risks or actual losses are distributed to the public taxpayers.

I begin to doubt the whole idea of "natural monopoly". Once it made sense to me, as with the post office or electric company. Running several trucks along the same streets to make deliveries to the same address -- by several different carriers -- just seemed wasteful. Having multiple wires on poles serving one neighborhood, perhaps carrying electricity at different frequency or voltages, similarly seemed like a situation where one provider granted a exclusive territory might make sense.

Yet I now see UPS and FedEx and Emery trucks running along the same streets as the Post Office, and all of them seem to be improving service year by year. I see AT&T and Charter cable and T-Mobile wireless all providing phone service (on poles and independent of poles) in the neighborhood, and all ekeing out a profit while improving services year by year. I see Uber and Lyft in the same areas. I see "public schools" competing with state-funded "charter schools". I see several different solar-power roof panel installers all wiring up feed into the main electric lines. It's becoming less and less obvious to me that "natural monopolies" exist at all, or deserve special state protections.

E Hines said...

I think there are natural monopolies, but they're borne of economic barriers to entry, not all of which are permanent. Ma Bell was a natural monopoly because of the cost of building out the physical network of landline phones--then MCI came along and wormed its way in (as LDDS), taking advantage of the just-occurred breakup of AT&T, and the monopoly aspect collapsed. Power generation from water dams would seem to be another, and it collapses, not from dam competition but from other sources for power brought into the region.

It's a useful way to guts up an expensive-to-create system. They could be made more economically efficient, though, by sunsetting the monopoly aspect. Patents get at that, and so does drug development; although there are legitimate arguments over how long the protection should last, and what the recognition keys should be for identifying when it's time to end the monopoly, besides doing it on the calendar.

Eric Hines

douglas said...

Great points, both.