Opinion from a Libertarian ViewPoint

Posts Tagged ‘Monopolies’

The Unintended Consequences of Unintended Consequences

Posted by M. C. on November 9, 2022

Any system that serves the interests of the few by choking off adaptability and the dynamisms of a free-for-all churn lacks the tools needed to avoid systemic collapse. By enabling elites to organize the nation to serve their personal interests, America has been stripped of the dynamics needed to adapt. Without these dynamics, collapse is the only possible outcome.

By Charles Hugh Smith

Decades of central bank distortions and regulatory / market-share capture by cartels and monopolies have completely gutted “markets,” destroying their self-correcting dynamics.

Unintended consequences introduce unexpected problems that may not have easy solutions. An entirely different set of problems are unleashed as unintended consequences have their own unintended consequences. This is the problem with complex emergent systems such as economies, societies and global supply chains: the system’s feedback, leverage points and phase-change thresholds are not necessarily visible or predictable, yet these dynamics have the potential to cascade small failures into systemic collapse.

The unintended consequences of unintended consequences are called second-order effects: consequences have their own consequences.

So for example, you juice your economy with massive stimulus after a lockdown that upended consumers and global supply chains, crushing both demand and supply, and suddenly you have rip-roaring inflation as demand comes back while supply chains remain tangled.

Shifting critical industrial production to frenemies so corporations could maximize profits while reducing the quality of goods and services seemed like a good idea until the potential costs of that dependence on frenemies become apparent.

Assuming oil and natural gas would always be in abundance made sense when they were abundant, but geopolitical forces kicked that assumption into the gutter. All the reassuring economic stories we told ourselves–energy is only 3.5% of the economy and the household spending budget, so cost really doesn’t matter–fall off the cliff when availability and supply become the paramount issues setting price.

That 3.5% loses meaning when there’s not enough to supply demand and somebody loses the game of musical chairs.

Then there’s the fantasy that monetary policy imposed by central banks control inflation. The inconvenient reality is central bank monetary policy is akin to building sand castles on the beach: when the tide is ebbing, the castles look magnificent. When the tide is rising, the sand castles are quickly washed away.

Inflation is actually a consequence of much larger forces that central banks don’t control: demographics (labor supply), social changes (quiet quitting, laying flat, let it rot), supply of essential minerals/materials, flows of private-sector capital, and most profoundly, the real-world productivity of capital, labor and state policies.

The tide of inflation has reversed and is now rising. This tide is gradual and will temporarily be reversed by the gluts of supply that inevitably follow artificial scarcities and the deflationary impact of credit-asset bubbles popping. But these reversals will be temporary and misleading: inflation has reversed for structural reasons unrelated to credit-asset bubbles and temporary gluts.

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The Global Minimum Corporate Tax Exposes the G-7’s Hypocrisy | Mises Wire

Posted by M. C. on July 7, 2021

The G-7 proposal is noteworthy for the fact that the leaders of the world’s most powerful nations, while accusing commercial businesses of abusing monopolistic power, are now seeking to expand their own use of monopolistic power against those same businesses internationally. More concerning, however, is the prospect of this trend expanding beyond corporate taxation and directly into the lives of individuals. If world governments can successfully monopolize corporate taxation, what other individual liberties might they be willing to exercise similar control over?

Robert Zumwalt

Austrian school economists have long demonstrated that monopolies only tend to form as a result of government intervention, and “natural monopolies” have virtually never actually existed. Nonetheless, we are continually told by political and academic “experts” that unregulated economies inevitably give rise to monopolies, business trusts, and cartels, all of which they assure us have disastrous consequences for ordinary people. Therefore, we are told, governments are justified in taking forceful action to prevent monopolies from developing or to break them apart.

In this debate, the interventionists frame themselves as opposing the anticompetitive forces of large corporations having too much control over the lives of ordinary people. It is noteworthy, then, that these same interventionists support similar kinds of anticompetitive practices, and the increased control over people’s lives they entail, when they are employed by governments instead.

To that end, the leaders of the G-7 nations have recently gathered to propose a global minimum corporate tax that would allow national governments to exert a form of monopoly power of their own over the taxation of business within their borders. A major element of the proposal, if brought to fruition, is the requirement that every nation impose a minimum corporate tax rate of at least 15 percent. The clear purpose of this part of the proposal is to eliminate the so-called race to the bottom in corporate taxes, which is a euphemism for high-tax nations’ hopes of shielding themselves from competition from nations with low tax rates seeking to attract businesses away from them.

For this proposal to have its intended effect, several nations outside of the G-7 would need to voluntarily raise their corporate tax rates. Ireland, for example, sets corporate taxes at 12.5 percent, and a substantial part of its tax base is located there specifically because it is a comparative tax haven. Other parts of the proposal therefore appear to be intended to induce low-tax nations like Ireland, who are not likely keen on raising their tax rates and losing the main attraction they have for multinational companies headquartering there, to participate. For example, the proposal would also redirect the payment of corporate taxes to ensure that the world’s largest companies pay some taxes to the nations where they do business, rather than where they are physically located. These provisions appear designed to compensate low-tax nations for the loss in tax base they will surely suffer if they adopt the G-7 proposal.

In short, wealthy nations know they can only tax businesses so much before those businesses find it profitable to move to competing jurisdictions with lower tax rates, and the G-7 leaders are now openly seeking to collude with other nations to put a stop to that competition. There is little meaningful distinction between this and the alleged anticompetitive practices of private businesses—complete with “kickbacks” promised to cooperating participants—that the same governments continually vilify.

Governments Still Oppose Private Monopolies

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Robert Zumwalt

Robert Zumwalt is an attorney with undergraduate degrees in economics and political science.

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Building the First Nation – LewRockwell

Posted by M. C. on November 24, 2019

A command-and-control economy where medical innovation and scientific reform are bugs to be blocked by bureaucracies simply has too much inertia built on the foundation of sacrificial wars and regulations to change its ways any time soon.

That’s why Joe Quirk and the Seasteading project are such a fascinating case to consider.

Why do the nations rage?

I don’t know. Maybe because they’re out of ammo culturally. As Joe Quirk, president of The Seasteading Institute calls them, “the 193 monopolies on government that control 7.6 billion people right now” could benefit from some peace-loving competition. More importantly, the existence of his planned seasteads, floating platform-based ocean communities, could benefit the ostensible customers of monopoly governments by modeling nonviolent, voluntary community making.

I interviewed Quirk because I am interested in the cause of liberty and nonviolence from an anthropological perspective. I am curious about why humans group together and assent to monopolies of violence called states. I want to know how humans came to morally condone and even consecrate the violence such entities employ against nonviolent people for disagreeing with majoritarian might-makes-right rules.

Watch the interview here:

In the news today we are hearing reports that an elderly pundit Dr. Jerome Corsi is likely facing prison time for getting tripped up in a perjury trap during psychologically abusing grillings by grand inquisitor Robert Mueller. Corsi’s actions, whatever the specifics, did not produce a victim. (Robert Mueller did when he helped mislead the nation into the Iraq War, as tens of thousands of wounded or killed soldiers prove.)

Regardless of what you think of his politics, Corsi is facing the prospect of being locked in a cage merely for the impotently cathartic game of DC blood sport. Seemingly near half the country seems to be foaming at the mouth at the sight of a political writer being caged in his last years just because he favored their rivals’ presidential pick. Who wants to live in a society where its law and liberty is decided by these violent bouts of scapegoat ping pong?

Centralized monopolies that demand the right to initiate violence against any nonviolent misfit are devolving into anarchic schisms of mad groupthink. Where do we get off this ride?

To exit the vehicle safely, we must know how we got in it and why it is breaking down and making us sick on its way out of commission.

The enigmatic Jewish prophet Habakkuk once wrote, “Woe to him who builds a city with bloodshed and establishes a town by injustice!”

He wrote it at a time in which evidence suggests the world was filled with societies founded and mediated by controlled acts of bloodshed. Today, we call it ritual human sacrifice and tribal war campaigns for glory. As sophisticated moderns, we are embarrassed to address the seeming fluke of sacrifice so ubiquitous to human history so we awkwardly shuffle it off to the corners of our museums. At best, the fashionable answer is that sacrifice was a quirk of religion or agriculture or proto-patriarchy or some other such cultural institution that soiled our primal nobility.

In reality, sacrifice was a safety valve ancient communities used to channel pent up resentment, fear, and conflict into misfit human vessels of destruction. These scapegoats were marked out from the masses by some arbitrary difference that made them unbearably peculiar to suspicious crowds looking to avert famine, disease, or other harbingers of social in-fighting and disorder. Eventually, the governing authorities streamlined the process of sacrifice to include foreign-captured slaves who first received orgies and feasts to make them tainted enough with the local spirit of the community in tension.

We think we educated ourselves out of human sacrifice but this is a convenient myth we tell ourselves to justify its continual residue in our daily lives. Every culture that sends state agents to lock up a woman selling unlicensed tamales or a political dissident or an addict or an Amish herbal salve seller is still very much enthralled by the one-for-all logic underlying our generative sacrificial origins.

Today, we hide our consent for coercion against misfits by telling ourselves it is for the protection of victims and children. As if, for example, another Amish farmer thrown into a violent prison cage would cause the nation to perish if he was left alone to sell his raw milk.

Beyond domestic sacrificial violence in the name of victims, it is difficult to find a single country in existence today that did not have its founding determined by self-justifying war. As another remnant of sacred ritual, war has been a socially binding agent for societies: a means of uniting restless neighbors in righteous self-sacrifice of life and wealth for the defeat of a less-than-human foreign foe. Yet recent years have shown that as the public is more frequently exposed to the images of constant intervention in countries like Iraq, Yemen, Libya, and Syria, whatever unifying high war has long held is rapidly dissipating.

Our increasing sensitivity to the plight of the other, be it the drug war-ravaged family or drone strike victims abroad, make the governance models built on the initiation of physical violence against nonviolent people increasingly ineffective. No wonder criminal justice reform and ending wars are now the few areas of overwhelming political unity. Yet political systems, always in a lag from cultural trajectories because of structural incentives to maintain the status quo, are dramatically slow to decisively satisfy such popular demands.

A command-and-control economy where medical innovation and scientific reform are bugs to be blocked by bureaucracies simply has too much inertia built on the foundation of sacrificial wars and regulations to change its ways any time soon.

That’s why Joe Quirk and the Seasteading project are such a fascinating case to consider. As sacrificial forms of governance continue to leave their citizens in disunity and internal resentment over who gets what spoils in a supposedly zero-sum economy, we have a real chance to see the first sovereign societies develop free from bloodshed.

An ocean-platform community voluntarily funded and organized, if successful, is a monumental event in human anthropology.

Just having a place where problem solvers and innovators can develop potential breakthroughs in science, medicine, and innovation, free from deeply captured regulatory apparatuses could be a tremendous leap forward for mankind. And if these societies can maintain a thriving, non-monopoly state-managed existence, the rest of the world’s governments will be on notice to wean off of sacrificial violence or perish through increased social unrest and decline.

Competition may be a sin to John D. Rockefeller. But when it comes to bloated bureaucracies buoyed by outdated ways of treating human beings, it looks like a big beautiful blue ocean to me.

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PG&E’s Failures Show the Dangers of Government-Imposed Utility Monopolies | Mises Wire

Posted by M. C. on November 9, 2019

When a company screws up so horribly, letting down literally millions of its customers and moreover promising to continue doing so for another decade (!), the obvious question is: Why don’t they go out of business? Why doesn’t a competitor grab their market share?

The answer, of course, is that the California government forbids PG&E’s customers from switching to a competitor.

If we see the benefits of competition in trivial goods like soda and cereal, we should all the more so insist on competition for essentials like electricity and drinking water.

Although the roughly two million affected residents of Northern California are recovering from the rolling blackouts imposed by utility PG&E, the company has warned that these “fire safety outages” may be periodically required for another decade. Naturally, California Governor Gavin Newsom decried the debacle as yet another example of “greed and neglect.” Yet as IER analyst Jordan McGillis explained in a previous article, the episode actually showcases the dangers of a government-imposed monopoly in electricity provision. In this article, I’ll elaborate on McGillis’ insights and show why the conventional economic rationale for government regulation of electric utilities is fundamentally flawed.

PG&E’s Rolling Blackouts Not a Free-Market Outcome

When a company screws up so horribly, letting down literally millions of its customers and moreover promising to continue doing so for another decade (!), the obvious question is: Why don’t they go out of business? Why doesn’t a competitor grab their market share?

The answer, of course, is that the California government forbids PG&E’s customers from switching to a competitor. Let me quote directly from McGillis who gets to the heart of the matter:

PG&E does not function as would a company in a competitive marketplace. As a regulated monopoly, it has been granted status as the sole provider of electricity to a swath of the state stretching more than 500 miles from Eureka, north of the Bay Area, to Bakersfield, in the San Joaquin Valley. The company operates in tandem with the California Public Utilities Commission (CPUC), a panel of regulators appointed by the governor. Unlike in a competitive marketplace, PG&E does not need to compete for customers by offering more value dollar-for-dollar than other companies. Instead PG&E is guaranteed a rate of return on its investments and establishes with the CPUC the corresponding rates that customers will pay.

So we’ve solved the most immediate puzzle: The reason PG&E can get away with such outrageous mismanagement and shoddy customer service, is that the California government literally guarantees them their business. It is illegal for another company to try to entice PG&E’s disgruntled customers to switch their patronage.

Companies in an Open Market Love Periods of “High Demand”

Although the outrageous episode of PG&E is fresh in our minds, this is nothing unusual. Every summer, it is commonplace for utilities to urge their customers to “conserve power” by keeping their air conditioners at an uncomfortable setting, and they often impose rolling blackouts or “brownouts” in order to maintain the integrity of the grid.

Notice that you never see this type of behavior from genuinely private sector companies? Even though people greatly increase their consumption of beer and hot dogs during July, you never see Budweiser or Oscar Mayer imposing temporary outages on their customers.

On the contrary, companies in an open market love it when the public suddenly wants to buy more of their product or service. It’s only in the realm of government-regulated utilities (or services directly provided by a government agency) where the customers are viewed as annoying nuisances, who need to be scolded to stop consuming so much.

Different Incentives, Different Results

Any adult American reading my article surely can agree—regardless of your politics—that I am speaking the truth. To repeat, you simply do not see private companies in (relatively) open markets operating the way PG&E and other “public utilities” do. So the mismanagement and shoddy service of PG&E can’t possibly be the fault merely of corporate greed and neglect. Rather, the difference is due to the institutional structure and incentives that the government sets up…


The PG&E debacle showcases the flaws of government-regulated monopolies. This is not an isolated incident, but is typical of the entire model. Yes, there are practical reasons that free and open competition might not work as smoothly with services requiring large infrastructure spending, but these complications pale in comparison to the dangers of having government outlaw competition. If we see the benefits of competition in trivial goods like soda and cereal, we should all the more so insist on competition for essentials like electricity and drinking water.

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Monopolies In A Stateless Society - The Art of Not Being ...



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The Reasons Behind The Relentless Ideological Onslaught – LewRockwell

Posted by M. C. on April 5, 2019

By Brandon Smith

…The suppression of free markets began in the aftermath of the Civil War and the passage of the 14th Amendment, which was intended to protect the citizenship rights of former slaves, but was instead used as a legal loophole by the elite to establish what we now know as “corporations”.

Corporations are defined by their corporate charter, which is granted by the government, as well as their “corporate personhood” derived from the exploitation of the 14th Amendment. Corporate personhood allowed for limited liability as well as many other government protections. Unlike partnerships, leaders of corporations cannot be prosecuted for many crimes if those crimes were executed by “the company”. The company can be sued as a “legal person” in civil court, or fined by the government, but in general CEO’s and major shareholders are protected from any consequences even if they were directly involved in the commission of a crime.

This relationship between government and corporations has become so egregious that today these monopolies receive special legal protections and immunity from some civil lawsuits, aid in the form of taxpayer funded welfare, massive tax cuts which smaller businesses and less connected corporations do not enjoy, and even central bank bailouts which keep them afloat. Major corporations are not allowed to fail, and no one is allowed to compete with them on a level playing field.

This is the exact antithesis to free markets. This is socialism. Yet many socialists point the finger at free market “capitalism” as the source of all our economic problems. This is impossible, because free markets on a level any higher than local trade do not exist today and have not existed for at least a century…

There is a group of people that do behave in a destructive way automatically or instinctually when engaging in commerce without regulation, and these people have become a fascination of mine. They are narcissistic sociopaths; the defining characteristic of most financial and political elites.

I have outlined the facts surrounding narcissistic sociopaths in numerous articles, and I recommend readers study these for greater details. To summarize, full blown narcissistic sociopathy is a psychological aberration present in around 1% of any given population from birth. That is to say, in most cases these people are not created by their environment. Many of them come from very balanced and sheltered childhoods. They are born the way they are.

Narcissistic sociopaths are a tiny portion of the population, but lacking any sense of empathy or conscience, they account for a vast percentage of all crimes committed in society. They also gravitate to positions of power and influence from the business world to politics…

I agree with Adam Smith in the idea that normal citizens will act to pursue success, but also to pursue balance. When given the opportunity to actually function within a true free market, most people are not going to destroy their surrounding environment and resources in some mad dash for gain. Why? Because it is in their self-interest not to. They know that if they abuse the structures around them they will lose their source of commerce. They know that if they ruin the system for others that they will be shunned in business. They also know that if they fail in such a spectacular manner and commit criminal sabotage of the free market system they will have to suffer the regret and shame that will follow.

The only factor that this does not apply to are the elites themselves; the narcissistic sociopaths devoid of conscience with whom we now contend for our freedoms. I would suggest that Smith’s free markets, unshackled from centralization and government interference, would function almost perfectly if these people were cut from the equation entirely.

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What is free market? definition and meaning ...




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Eliminate Google From Your Life

Posted by M. C. on January 25, 2018

It’s important to realize that Google catches every single thing you do online if you’re using a Google-based feature, and that the data is being used to build powerful personality profiles. As previously reported by Gawker:1

“Every word of every email sent through Gmail and every click made on a Chrome browser is watched by the company. ‘We don’t need you to type at all,’ [Google co-founder Eric] Schmidt once said. ‘We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.’”

How these profiles — with capabilities akin to mindreading — are ultimately put to use is anyone’s guess. The main purpose of this data collection is said to be for marketing purposes, allowing companies to target users with a known interest in certain activities or products. This is bad enough, but the profiles could just as easily be used for more nefarious and liberty-infringing purposes, and we’re already seeing some evidence that this is taking place. Read the rest of this entry »

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Warning: One of These Monopolies is Going to Control You | The Daily Bell

Posted by M. C. on November 17, 2017

Why are governments so interested in breaking up monopolies? To protect the biggest monopoly of all, the government.

The American people are skilled mental gymnasts. They can totally agree that monopolies in the private sector are bad. But monopolies on defense, law enforcement, courts, education, roads, and so on are perfectly fine, even necessary!

This comes down to the myth of the process. People have been convinced that since companies are motivated by profit, they are untrustworthy. Governments are allegedly altruistic, working in the best interests of the people. In reality, the people in government take their profits in power. Read the rest of this entry »

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