Written By: - Date published: 12:49 pm, June 15th, 2011 - 271 comments
Categories: privatisation - Tags:

The Nacts just love the idea of selling off the Government/Council monopolies. To sell the public, they push the free market “monopolies are bad” nemesis.

Monopolies and Duopolies have their place in our society, but they should be controlled and owed by Councils or Government.

In a small country like ours power generation is a natural monopoly it would seem pointless in having 5 power lines running into a house from five different power companies, sewer, water, roads, airports, the law even, are all natural monopolies.

These natural monopolies should be controlled by Councils or Government and that’s a good thing, because the so called Free market or private sector have only one idea for these natural monopolies, that’s extract as much money as they can from them, then keep milking them for all they are worth till the government steps in and regulates or before that happens they hope to sell them back to whoever they brought them from making a huge profit.


271 comments on “Monopolies ”

  1. Gosman 1

    Ummmmm… who exactly decides what constitutes a “Natural monopoly”?

    I seem to remember that Telecom was once regarded as a “Natural monopoly” yet now there is a large amount of competition in the telecommunication sector.

    There could be a case to made that Microsoft or Google are “Natural monopolies”. Are you implying that you think it would be a good thing for a Government to own and control these organisations?

    • higherstandard 1.1

      Should Foodstuffs and Progressive be owned by the councils and gummint ?

      • felix 1.1.1

        How is that a “natural” duopoly? It would seem to me that it’s a very deliberately created one.

      • bbfloyd 1.1.2

        there should be regulatory oversight on the pricing of basic food items.. then the fact that there is a monopoly situation coming about through deliberate action by supermarket chains wouldn’t leave us at the mercy of profiteering corporates.

        • Rusty Shackleford

          How would that make food cheaper? Cap the price you get a shortage. Econ 101.

          • Colonial Viper

            Cap the price you get a shortage. Econ 101.

            No wonder the NZ economy is so fucked when our politicians and economists follow dumbass ideas like this.

            I’ll give you a clue. Cap the price of milk to $1.60/L in NZ retail shops. Explain to me why any shortages would result.

            Because at the moment plenty of households are already experiencing shortages of milk, in NZ of all places, right this minute.

            Because they can’t afford any

            Fucking moron

            • Gosman

              You read exactly like the Zanu-PF politicians in Zimbabwe did when they stated people were profiteering of prices and that they needed to be controlled. Worked a real treat there it did.

            • Rusty Shackleford

              Because, instead of producing milk and selling on the NZ market, farmers would either cut production or sell it overseas where they can get the prevailing market price. If the cap is higher than the market price, it will make no difference. If it is lower, well, you get shortages.

              Do you have a substantive response, or would you rather fling your toys around like a petulant child?

              • Draco T Bastard

                Pass a law that enough food to feed everybody that’s grown in NZ cannot be exported. Don’t even have to control prices then.

                Oh, and go watch ZeitGeist to get an idea of how an actual economy works. You’ll find it’s a lot different from the delusion that is market-economics.

                • Rusty Shackleford

                  I’m not even sure what to say to this. ow exactly will that make people better off. We now have slave farmers who can’t even earn foreign currency to buy foreign goods like oil (which they need to grow the food in the first place), so we get ever decreasing food production because of less efficient farm practices and therefore your bright idea has made us worse off. And we don’t even have ipods to boot!

                  • Draco T Bastard

                    I didn’t say that they couldn’t earn foreign currency did I? The farmers produce far more than we need. I was just pointing out that the farmers, in using our land, have a duty to us.

                    • Rusty Shackleford

                      They won’t be able to if they don’t have anything to sell. How kindly do you think farmers are going to take to having their incomes slashed? Some will quit, some will be forced to.

                      So, you don’t believe in property rights?

                    • Draco T Bastard

                      I believe in properly applied property rights. When the alluded to property can’t be removed from the commons, which land can’t, then it must remain the property of the community so that they can have control over what happens on it. Especially pollution and land degradation. The land user would hold a lease and not a permanent one either.

                      They won’t be able to if they don’t have anything to sell.

                      They’d still have something to sell. As I pointed out, our farmers produce more than we eat so they would still be able to sell the excess overseas and they’d still be selling the rest here.

            • JD

              I was going to say something but CV’s comment is so cretinous that it needs no explaining.

              • Rusty Shackleford

                He and his sock are so like a character from a Rand novel. So much so as to be a caricature. You would think a leftist website would be a good place to come to have your beliefs challenged, but this place only strengthens them. I’m off over to Whale Oil to see what he’s up to.

                • wtl

                  Seriously, repeatedly comparing people to characters in a fictional novel is just lame. Don’t you know any real people?

                  LOL, and you seriously think anyone believes you came here to ‘have your beliefs challenged’???? More like an ego trip, like any randroid.

                  • Rusty Shackleford

                    OK, so you are about the 8th person today who has blustered and called me names, whilst failing to say anything substantive. I honestly try to carry a conversation here in good faith. Refraining from formal fallacies and childish name calling. But it’s hard to do that when even the mods indulge in flinging feces around.

                    Good luck in getting your ideas implemented without the use of force. If you can’t even explain yourself without calling someone a moron, you don’t have much chance. I’ll be sure to stay well away from NZ when you do finally exact your final plan (don’t kid yourself, Key is on your side).

                    • wtl

                      Blustered? No. But if it satisfies your ego to think that, good for you. I had a look at your comments here and they demonstrate that there is simply NO POINT trying to say anything substantive. A few examples:

                      1) At one point you were saying ‘yes I’m sure that x happens but please show me evidence that it does anyway’. WTF?????

                      2) redlogix provided an argument in favour of state-controlled monopolies backed by a 17-page economics paper. You responded by saying you can’t be bothered reading a 40-page(?) document and you simply don’t/won’t believe it anyway. And then you asked for some extremely specific evidence to prove that you wrong, probably chosen because you know that no one could ever satisfy your requirements.

                      3) You said that ‘public schools are shite’ based on who knows what, and imply that most people who have been through the public system are poorly educated. Of course, this wouldn’t seem insulting to anyone who has been through the public system, would it?

                      4) You accuse others of saying “they are right because they are right”, even though you did exactly the same thing in points 2 and 3 above.

                      5) You try to insult others by saying that are like some characters in some fictional novel. And then complain when others insult you.

                      Good faith? LOL, biggest joke of the day. Perhaps in your mind. But most others would beg to differ.

                      In cases such as yours, yes, there is no point in trying to argue. Its like shouting at a brick wall. Anyway, you really should just grow up instead of crying for mummy every time you think someone is insulting you.

                    • Rusty Shackleford

                      WTL, try not to get personally offended when you read something that doesn’t jive with your beliefs.

                      1. If you can think of something, it’s almost certain that it has happened at some point. I was simply saying that sometimes people are coerced into working in sweat shops. It doesn’t mean that all sweat shops should be closed down.

                      2. I’ve demonstrated the faulty logic of natural monopolies (my 2 page article sets it out quite well). Simply, you can extend the logic to any good. Which goods aren’t public goods? Then I pointed out that the only logical reason for the state to run a monopoly is if they can produce the good cheaper/better. I was simply stating the parameters within which they are doing so. Electricity is cheap for the consumer, but so what if they are bailing out the firm every six months through their taxes?

                      3. I’m a public school teacher.

                      4. I have never resorted to using “You are a moron” as evidence for my case.

                      5. I only insult those who insult me first. If you start reading my threads at the start, you will see I never cast the first stone.

                    • wtl

                      No, I am not personally offended at all. I am not sure how you managed to get that from my comments, but who knows – strange people think in strange ways. Or perhaps you mean this as an insult? Meh, who knows. Or cares.

                      I really can’t be bothered responding to you in any more detail because it is a pointless argument. as I’ve already pointed out, I don’t accept you are doing so in good faith, so I’d just be wasting my time.

          • bbfloyd

            rusty…trite answer.. have you forgotten your own mantra” the market will adapt”? try again. and this time don’t use words that others have given you.

    • bbfloyd 1.2

      and who do those competitors get their access to telecommunications infrastructure from?

      • handle 1.2.1

        There is no prospect of viable competition at the basic network level. Retail, yes.

        • bbfloyd

          absolutely right handle… which still leaves telecom with their hand on the on/off switch..

    • Draco T Bastard 1.3

      Telecommunications is a natural monopoly. It’s highly inefficient to have multiple networks covering the same geographic area and such competition costs us much more. Extra labour/resources to get the resources to make the cabling. Extra labour/resources to lay it out and then the extra labour/resources caused by the duplication of administrative services etc, etc.

      who exactly decides what constitutes a “Natural monopoly”?

      It shouldn’t be a “who” but a set of conditions. Often, like telecommunications, the conditions would be physical. Others, like health, would be economic. It’s simply cheaper for the community to support enough doctors/nurses/researchers to cover the entire community than having multiple insurance companies that all have advertising costs and duplicated administrative services. The community basically becomes a monopolistic insurer in this case. (See my comment here.)

      • Rusty Shackleford 1.3.1

        Of course! Central planning! Why didn’t I think of that? It’s always worked in the past!

        • Draco T Bastard

          I’m pretty sure Microsoft agrees with you but I don’t. Generally speaking, I prefer democracy.

          • Rusty Shackleford

            I don’t get your point. MS is a monopoly?

            • Draco T Bastard

              That’s what the courts in the US and EU found and, AFAIK, they haven’t managed to break that monopoly – probably because of the IP laws that both have that make it a monopoly.

  2. Bored 2

    Capitalists drone on about risk and reward….however those with the capital look for the safest option. This contradiction is at the core of the issue. The corollary of safe investment is that new and risky enterprises find it hard to garner capital and consequently have a high failure rate if they start at all.

    We need investment in risk areas. If capital can be excluded from safe investment such as socially needed services it will have to find a home in new enterprise. This concept again is at the heart of the classical economists (Smith, Hobbes,etc) disputes over rentier behavoir.

    In the case of NZ we have a real issue with power water and communications infrastructure returning rents to off shore investors which makes it doubly hard for us to generate new enterprises and to be competitve in existing enterprise. One fix would be to tax rentier behavoir and capital gains at an excessive level.

    • Gosman 2.1

      “….however those with the capital look for the safest option.”

      This is based on what research exactly?

      • Colonial Viper 2.1.1

        You’re such a bad Righty Gosman.

        Risk vs return you heard of that?

        Go back to Econ 101 mate.

        • Gosman

          I’m well aware of the nature of Risk versus return however you seem to have forgotten the key aspect of that.

          People are willing to take higher risks if they perceive that the potential return is likely to be great enough for them. This is one of the reasons leftists argue that markets need to be regulated as many people make what is seemingly irrational investment decisions in rising markets which cause Asset bubbles.

          Now pray tell me Mr ECON 101 expert how do you square the existence of Asset bubbles with the statement that “….however those with the capital look for the safest option.”?

          • Bored

            Gos is right about bubble speculation, it is very similar to boys penises acting as their brains in the presence of pretty girls. The issue changes in “normal” times when the euphoria levels are low, ECON 101 indicates in these periods rational decison is to seek safety, especially from institutional investors. To complicate things at all times larger capital holders will have a spread between risk and safety.

            • Colonial Viper

              You mean Gosman has no idea of the difference in market agent behaviour between bull markets and bear markets?

              Being a Righty that figures.

            • felix

              It’s the other way round for me, Bored – my brain acts as a penis.

            • Gosman

              ECON 101 states nothing about people always seeking the safest investment options, which is what I am taking issue with here.

              In a macro-economic environment there might be a general tendancy for investors to do so but even that is hardly guarranteed over the long haul. Ultimately it is the individuals decision what they think is a fair return given the amount of risk involved in something not some textbook rule you think you have discovered.

              I sometimes wonder which Stalinist institute of ‘higher’ learning some of you leftist pseudo-economists went to.

              • Bored

                I went to the school of 30 years of owning, managing and running companies successfully, making money the good old capitalist way at which might I say I am rather good (I reserve the right to be slightly schizoid with regard to my political affiliations…refusing to join the grasping classes by rejecting my proletarian roots). It is a rather excellent place to be when you read right wing twats giving a theoretical steer on ECON 101.

                • Rusty Shackleford

                  What is your point?

                • Jag

                  Just because you sought the safest place for your capital doesn’t mean that is how all market participants operate.

                  A fundamental premise of portfolio theory is that each market participant has varying degrees of risk aversion. The key is if you have a propensity for riskeir investments then you should be compensated for that risk – that in a nutshell is risk-return and i think the point that Gos is getting at.

                • Jag

                  Just because you sought the safest place for your capital doesn’t mean that is how all market participants operate.

                  A fundamental premise of portfolio theory is that each market participant has varying degrees of risk aversion. The key is if you have the willingness and ability to invest in riskier asset classes then you should be duly compensated for assuming that risk – that in a nutshell is risk-return and i think the point that Gos is getting at.

                  So really just because you have been successful “the good old capitalist way” does not at all mean that the safest route is the only route and doesn’t preclude others with greater appetites for risk also being successful. That really is very elementary stuff that is at the heart of “the good old capitalist” system.

      • Draco T Bastard 2.1.2

        All of it and basic observation. No capitalist will ever take a risk – entrepreneurs do.

        • jagilby

          Ha, really???

          That’s quite a bold (read: stupid) statement.

          I’m sure Venture Capitalists would love to hear that they are not risk-takers!

          • Colonial Viper

            What exactly do they put at risk? Not the chance of putting dinner on their family’s table, nor their E Class Merc.

    • queenstfarmer 2.2

      those with the capital look for the safest option

      What absolute nonsense.

      • Gosman 2.2.1

        Yes, I’ve tried to explain why this is complete nonsense but the Stalinist economists amongst The Standard’s flock somehow went to a different ECON101 lecture than the rest of us in the real world.

        • Draco T Bastard

          ECON101 lectures aren’t in the real world. The entire theory is delusional.

          • Macro

            Yeah! But try telling THAT to Gos et al.
            And then they have the gall to witter on that Climate Science is ONLY a “Theory”!

          • jagilby

            It’s not the real world – correct. But if you’d stayed on to ECON401 (or more to the point FINC401/MOFI401) you’d realise that the “perfect world” principles espoused in ECON101 are merely a starting point for explaining the complex phenomena that do occur in the real world.

            The only delusional assertion here is yours that entrepreneurs are the *only* risk takers.

            Accordingly every asset class known to man must have less default risk than a US Treasury Issue on Planet Draco.

            • Colonial Viper

              More than 95% of all economics schools should be closed down. This is a discipline which has destroyed more citizens wealth in the last 3 years than they helped produce in the 100 years before that. And they still don’t know why or how.

              They are a menace and unnecessary for the running of society.

              • jagilby

                At the risk (or more the reality) of wasting my time here with an ideological brick wall.

                So it seems in your universe the only measure of risk is whether or not you are in a binomial position where the only outcomes are:
                1) Hitting a home run; or
                2) Failing and finding yourself on the streets?

                That is the absolute extreme on the risk-reward continuum. I’ll happily agree that entrepreneurs take on a great deal of risk. To argue that a VC, in financing an entrepreneurial start-up with no revenue or proven market, is not taking any risk is a retarded statement to make.

                You make it sound as though in the event of failure the VC just packs his cash back into his briefcase and stolls down to the Merc Dealership. I can reassure you, from experience, that is most certainly NOT the case at all.

                Private Equity (yes, I am your equivalent of the anti-christ) – is a high stakes risky game and the approach used by most orthodox investors is totally consistent with portfolio management risk-reward concepts. The higher the *potential* returns then the higher the risk…. sure not quite as far along the continuum as an entrepreneur who has all his/her eggs in one basket. Usually the risk is reduced only through investing in multiple high risk ventures.

                The ultimate test, I guess, is that if you think it’s such an easy money game then you’re welcome to set up a fund yourself and have a crack. No one is stopping you.
                Alternatively I’d suggest you could go into my fund but I’m sure it wouldn’t matter how transparent I was you’d still believe I had hatched some Machiavellian scheme to part you and your hard earned savings.

            • Draco T Bastard

              …starting point for explaining the complex phenomena that do occur in the real world.

              And they still can’t do that either. We know this because all of the neo-liberal economists completely failed to predict the GFC. In fact, they had labelled the boom times we had just before the damn burst as the Great Moderation.

              A theory’s ability to predict the future is what marks it’s applicability to the real world. The free-market theory completely fails to predict anything at all. This inability proves that it’s complete BS and total delusion.

              • jagilby

                Mate, it’s clear that you can’t even grasp (or more to the point, accept) the most elementary concepts of risk and return so now you’ve used that as a segway into opening up the GFC fun-box of blame.

                I certainly am not going to waste any more time by going into the minutia on the causes, or attributing blame, for the GFC. You really engaged yourself in critical thinking while watching Zietgiest so I’m sure you now know everything about the financial system anyway.

                I’ll happily go about participating in the capitalist system in a meaningful way while you can spend your days posting here making absolutely no difference to what actually happens.

                • Colonial Viper

                  I’ll happily go about participating in the capitalist system in a meaningful way

                  Borderline oxymoron here.

                  • jagilby

                    Sure, OK, but I think we can both agree that anything is more fruitful than what you would have achieved spilling your bile all over The Standard 24/7 – and let’s not kid ourselves into thinking it isn’t anything less than a full time “occupation” (can’t think of what else you’d call it?) for you and Draco (although I’m still convinced you’re the same person).

                    [lprent: They are not. Different parts of the country.

                    And your argument is quite evidently flawed. Neither are particularly close to the number of comments that I have left (not counting notes like this). And Draco has been writing them for longer than I have on this site.

                    But this is only my 4th most important activity in terms of time. It consumes a lot less time than work, socializing with Lyn, or volunteer programming/home training. I’m not even that sure that I don’t spend more time reading these days because the iPad makes it o easy.

                    I would say that you just have a low estimate of others productivity. Probably because you’re comparing it to your own inefficient levels? ]

                    • Colonial Viper

                      If you mean by full time occupation that I live breathe and eat socialist ideology and working class politics then yeah, it’s a full time occupation for me.

                      As for “bile” well yep I am fucking angry that you and other Right Wingers think its fine to asset strip the country for the profit of foreigners, and to support a Government which is bent on transferring financial and social wealth from the bottom 95% of New Zealanders to the top 5% of the population.

                    • jagilby

                      “Probably because you’re comparing it to your own inefficient levels?”

                      Cause you know the first thing about what I do and my productivity levels…. Here I was thinking (I don’t know why given the content this site produces) that you, Lynn, would be the last person to make completely unsubstantiated statements.

                  • ZeeBop

                    Home schooling works because the kid can learn at their own pace more.

                    Its the cowboy on the ranges cooling saying how the buck will come round
                    eventually if you given them time.

                    I think that’s why so many young people now are infantile into adulthood.

                    The neo-stupids want us to run from one side of the ship to the other
                    at a moments notice, and now the ship is tipping over, they want into
                    the lifeboats first, lots of ideas little to show for it. Entitlement complex.

                    Two decade ago some talkhead on TV said the word emacipation is going
                    to be the biggest theme of the decade, now its a reality for many in
                    the middle east.

                    We are going back to hard slog for our rights and shutting down the small
                    minded ditto head of conventional wisdom.

                • RedandBlack

                  jagilby your critical thinking does not extend to German I take it.. The correct spelling is Zeitgeist.

                  • jagilby

                    Last I checked spelling or languages wasn’t a prerequisite for critical thinking but nice of you to make your point.

                    I’ll be sure to spell *Zeitgeist* correctly in future and I’m sure my argument will be much stronger for it.

                    Do you have anything further to add or just thought you’d drop in with a pedant POV?

  3. Jeremy Harris 3

    Puh-lease, do you even know the difference between power generation, transmission and distribution?

    Because from this sentence I’m pretty sure you don’t have a clue:

    In a small country like ours power generation is a natural monopoly it would seem pointless in having 5 power lines running into a house from five different power companies,

    Three different companies generally handle the process from generator to home. Often State –> State –> Private, or Contact –> State –> Private. Even before privatising/deregulation in the 90s it still went State –> CCO. Additionally I can generate power on my property in any number of, largely renewable and uneconomic, ways. To call power usage a natural monopoly displays massive ignorance.

    Do you consider vegetables a natural monopoly? Maybe we should try collective farms too? They worked so well in the USSR.

    • Bored 3.1

      The mirror image of the collective farm is the Nike sweatshop in Managua. Both are hell for the worker and involve excessive coercion. Extreme socialism and extreme capitalism both lead to human misery. I would contend that as a general rule those things that attract rentier behavoir need regulation or socialisation, those that we can choose to buy as opposed to need are best left to the market.

      • Rusty Shackleford 3.1.1

        How are sweat shops coercive? People generally choose to work there because they offer higher wages than the otherwise prevailing rate in the region. They aren’t fun places to work by any stretch, but if you take the option away, you make the worker worse off.

        • Bored

          On behalf of sweatshop workers everywhere FUCK OFF.

        • Colonial Viper

          Rusty and Jeremy appearing on the same thread. How quaint.

          • Rusty Shackleford

            OK you win. Your reasoned premises and quality evidence has crushed me. You sir are a debating champion.

            Also, I love how you deign to speak for literally millions of people in a couple of dozen countries. You know what everyone is thinking?

            • Colonial Viper

              Ahem to clarify I am not intending to use reasoned premises and quality evidence to crush the Right Wing, just crush the Right Wing.


              • Rusty Shackleford

                So, basically you are like one of the characters out of Atlas Shrugged?

              • Gosman

                Yes essentially Colonial Viper seems to hold the position that reasoned and intelligent debate is not necessary and his or her views should be taken as the gospel truth while anything contrary should be stamped out. Similar in many way to any number of leftist despots throughout history.

                • Colonial Viper

                  Gosman promoting reasoned and intelligent debate!

                  Well I never would’ve thought 😀

          • Jeremy Harris

            I’d find it quaint if there was a nonsense pinko thread you didn’t comment on CV.

        • bbfloyd

          what planet did you say you came from rusty? “they generally choose to work there because they offer higher wages than the prevailing rate in the region” … so the fact that their “choice” has been forced on them by the machinations of corporate interests has no bearing?

          • Rusty Shackleford

            So, if the sweat shops weren’t there, they would all be doctors and lawyers? How does that work?

            • bbfloyd

              now you’re just being silly…. they would go back to their farms for the most part, and probably have much healthier, fulfilling lives… or are we pushing you out of your comfort zone asking you to look past your office desk?

              • Rusty Shackleford

                Fucking hell. Have you ever worked on a farm? Let alone a subsistence patch of dirt? Why the fuck DON’T they go back to the farm if it is so awesome? What is stopping them? Are there really dudes with guns stopping them from leaving?

                • Gosman

                  You’ll just get the bog standard line that evil capitalists are forcing these poor rural farm workers to leave their rural paradises by buying up all the land or something along those lines. What they fail to realise is that subsistence farming is largely a crap way of living and has always been this way throughout human history. That is why people migrate to cities even if conditions in them are not all that great.

                  • Rusty Shackleford

                    I grew up on a modern industrial farm with tractors and motorbikes and trucks and all that stuff. And it was still fuckn’ shite.

                    • RedLogix

                      I grew up on a modern industrial farm with tractors and motorbikes and trucks and all that stuff. And it was still fuckn’ shite.

                      Yes, modern industrial farms are shite. If that is all you know then yes I can see why you wanted nothing more than to get as far away as possible.

                      But of course this form of farming is not the only option.

                  • lprent

                    Depends who can be bothered answering.

                    Personally I find that depends. For instance the state highway system is a state monopoly run by (ummm) NZTA. So is the civil aviation. Apart from NZTA’s fetish for road building vs public transport, they both do a pretty good job based on their results. I’m afraid that things like toll roads owned by corporations look hopelessly inefficient by comparison.,

                    • Rusty Shackleford

                      You’re confusing the seen with the unseen (I didn’t just make that up).
                      Sure you can see the roads, and they are great. But what wasn’t built so that those roads could be built? What is the optimum amount of roading and how much should they cost? These questions are impossible to answer because absent the market there is no mechanism to measure the outcomes. Maybe the market would have provided more public transport options.

                      Why do we have congestion? Because the roads are “free”, is part of the problem.

                    • Draco T Bastard

                      These questions are impossible to answer…

                      Scientific Method. Would result in less waste and an actually sustainable economy.

                  • Draco T Bastard

                    People migrate to cities because there isn’t enough work on the farm for so many. Or have you not yet figured out why civilisation didn’t start to exist and population exploded until after we had farming?

                    • Rusty Shackleford

                      Doesn’t that kinda, sorta prove my point? Working on a subsistence farm isn’t awesome. Neither is working in a sweat shop. We need to work towards higher orders of capital for all people (which is the only way to raise living standards, govt decree can’t do that), so that they and future generations can have jobs that don’t suck.

                    • Rusty Shackleford

                      Ah yes, central planning. A group of intellectual elites can plan our lives for us. That always works!

                    • Draco T Bastard

                      Ah yes, central planning. A group of intellectual elites can plan our lives for us.

                      Ah, you’re one of those false dichotomy types. If it’s not your favourite belief system it must be insert Bad Thing here while you probably have NFI about the Bad Thing.

                      We have the scientists do the research and then report back at which point we then make a democratic decision. I’ve told you before, I hate capitalism and the central planning that you keep mentioning is pure capitalism.

                    • Rusty Shackleford

                      I can’t think of a better term. It’s a pretty safe bet to say that central planning hasn’t really worked out that well in the past.

                    • Draco T Bastard

                      If you’re equating democracy with central planning then you really are delusional.

                      It’s a pretty safe bet to say that central planning hasn’t really worked out that well in the past.

                      Seems to be working quite well at Microsoft. Of course, MS does have the help of the state behind them ensuring that there isn’t any competition available. I point this out because this central planned monopoly is the market system that you ascribe to.

                    • Rusty Shackleford

                      Are MS a govt (wtf are you talking about?)

                      ” I point this out because this central planned monopoly is the market system that you ascribe to.”

                      Quote one thing either A. I have said or B.In the libertarian tradition that would give you this absurd notion. If you can’t you are a bigger buffoon than I had given you credit for.

                    • Draco T Bastard

                      Everything you’ve said indicates that you’re a market capitalist, a libertarian as you call it. What I was pointing out was that such market systems always shift to authoritarian systems over time. Well, not always, such societies do occasionally collapse completely and end up like the Ik.

                    • Rusty Shackleford

                      Libertarian in the Austrian tradition. Yes, large govts tend towards tyranny. It’s true of hard left and hard right govts. Which is why constraints and limitations on govt power are essential.

                    • rosy

                      Libertarian in the Austrian tradition

                      It does my head in to see this (although I’m aware that it is a particular school of thought) when everyday I see how well Austria functions with it’s social democratic government and top 15 GDP. Even after some market-economy reforms it seems quaintly old-fashioned in many ways, what with full-employment policies, shops closed on Sundays, full of publicly-run events, a strong labour movement, comprehensive healthcare and the like.

                • The Voice of Reason

                  “Are there really dudes with guns stopping them from leaving?”
                  ‘fraid so, Dale.

                  • Rusty Shackleford

                    Can you bring up some stories that relate to sweat shops? I’m sure it happens, but there are none such in your link.

                    • The Voice of Reason

                      If you’re sure it happens, then my work here is done! But feel free to google more examples, there are plenty out there.
                      It seems to happen most often in military regimes (Sth America and Africa mainly) or in the Free Trade Zones that are common in Asia. The latter often has a quasi-legal status where locked factory doors and armed guards are said to be a security measure against outside threats, such as news crews, health and safety inspectors and, of course, trade unionists.
                      It’s a sick fucken world we live in, Rusty and I can’t blame you for not knowing about this stuff, because people risk death to get even a little information out. The bosses of these places don’t kid around, they can and do kill people who blow the whistle.

                    • higherstandard

                      Here you go


                      ….. especially ironic as so many commenting couldn’t bear to part with their iphones or ipads

                    • Jum

                      ‘Rusty Shackleford …15 June 2011 at 4:04 pm
                      Can you bring up some stories that relate to sweat shops? I’m sure it happens, but there are none such in your link.’

                      Sweat shops? Yeah man; private company, started in early November 2008, what was it called? Oh yeah, that’s right – New Zealand, ‘mum and dad’ owner John Key.

                      Financial plan? Sell down assets and reduce expenses by removing minimum wage safeguard for low-paid employees (that’s the population of New Zealand).

                      Then send to ‘Pick a Part for selling off what’s left.

                  • Rusty Shackleford

                    Link an article then. Easy.

                    • Rusty Shackleford

                      Ah, yea that sounds like a stinky place to work. I certainly wouldn’t want to and I’m not saying this a state of affairs that will or should persist. But where in the article does it say people are forced to work there? And secondly, how would those workers lives be improved if the place was shut down?

                    • The Voice of Reason

                      Cheers, HS, I’m glad you get it.
                      As for Rusty, well, I hate to quibble, Gribble, but my link to the google search (above) provides many links to gun toting bosses in sweat shops. There are hundreds of results to wade through, knock yourself out and FFS, educate yourself and don’t demand I do your research for you.
                      And as for your question No2 below, the answer isn’t to close the factory, it’s to modernise the work practices. Better still, hand over the factory to the workers. They’re the ones that actually know how to make the product, what do they need a bludging, bullying and parasitical boss for anyway?

                    • Rusty Shackleford

                      I skimmed the first two pages and didn’t find one example of sweat shops forcing their workers to work. Just link to one example. I’m sure it happens, but I’m not convinced it is wide spread.

                      The workers know how to make the product because the capital owner trained them. And, oh yea!, provided the fuckn’ capital. That shit doesn’t grow on trees. Man wasn’t born with the innate ability to make Nikes.

                      And if you are so knowledgeable about sweat shops, why didn’t you just direct me to the back half of Klein’s No Logo. It’s pretty much the gold standard leftist argument against sweat shops.

                    • The Voice of Reason

                      As I said (twice now) do your own research. It’s all a mouse click away. Let us know what you find.

                    • Colonial Viper

                      Rusty has this quaint notion that capital doesn’t grow on trees.

                      Of course it does. Just think quantitative easing I and II.

                      He also has this quaint idea that a worker being “forced to work” must occur at gun point.

                      Just like all the people in shitty Christchurch housing on broken land that they still owe huge mortgages on are still being “forced to work”.

                      Of course Rusty, they could abandon their jobs, and abandon their now worthless houses, but then they would have nothing and lose their entire life savings.

                      No doubt this to you is what constitutes your beautiful world of “free choice”. Die by the knife or by the gun. Hey that’s “free choice”.

                      The workers know how to make the product because the capital owner trained them.

                      Don’t be fucking stupid, the hedge fund CEOs who own large parcels of Apple stock don’t have any idea how to assemble an iPad, let alone train someone else to do it.


                    • Rusty Shackleford

                      Why is the burden of proof on me? I already mentioned a book (which I disagree with), that could be used to back up your thesis. If you haven’t even read such a basic and well known piece, I don’t know what right you have to expect me to find your evidence for you.

                    • Rusty Shackleford

                      Do you think I’m on the side of hedge fund managers, CEOs or (wtf?) quantitative easing. The QEs were looting, pure and simple. Don’t use them as a stick to beat (what you presume to be) my ideology.

                      No, Steve Jobs couldn’t assemble an ipod, but he oversaw the design and marketing. The factory owners whom he contracts the assembly to must have some idea of how to direct resources to assembling ipods. How else would they have been built? Did the 5th grade education workers who produce them somehow work it out?

                      As for Christchurch? I’m not sure I take your point. Are you saying that the defuse groups of people affected by the earthquakes are some how analogous to sweat shop workers? Or were you just using something topical as a means to your own end?

                    • Colonial Viper

                      “Forced to work”

                      I am saying that you don’t understand the concept of force. I am also saying that you don’t understand the concept of free choice.

                    • The Voice of Reason

                      Fuck me, how stupid are you, Rusty? A couple of hours ago you didn’t think people worked at gunpoint. Shortly afterwards, you thought they did. I’ve shown you how google works, pointed you in the right direction and you still can’t figure it out.
                      What do I have to do? Put a gun to your head?

                    • Rusty Shackleford


                      Here is an example of some Indians being forced to work at gunpoint in Libya. It’s the first result from your search. It isn’t an example of an endemic tendency amongst sweat shop workers being forced to work. In fact there is no mention of sweat shops. This seems more like an example of kidnapping. Which, for obvious reasons, I am opposed to.

                    • The Voice of Reason

                      Rusty can’t google? Amazing in this day and age!

                    • Rusty Shackleford

                      The burden of proof was on you, and you failed time and again. I can’t prove a negative. The New York Times isn’t going to run an article saying “Sweat Shops A-OK, No Coercion Found”. Therefore, it should be easy for you to come up with an article.All you gave me was a google search that was too vague or tangentially related to prove your point. So, you resort to jesting and japing. Good job.

                    • The Voice of Reason

                      What burden of proof? You agree that it happens, remember? If you want to know more about it, google it.

            • Gosman

              I think bbfloyds argument is that without the nasty ‘sweat shops’ foceably imposed on them be the evil capitalist oppressors the new liberated workforce would be magically able to enjoy jobs that offer them better conditions of pay doing something similar rather than wallowing in pigsh@t poverty, which is where they were before said ‘sweatshop’ was set up.

              However I could be wrong about this.

  4. mikesh 4

    The existence of asset bubbles don’t really negate viper’s argument. Assets that are the subject of a bubble aren’t necessarily unsafe, just overpriced.

    • Gosman 4.1

      You do realise that unsafe and overpriced are essentially one and the same when it comes to economic risk???

  5. Rusty Shackleford 5

    There is no such thing as a “natural” monopoly. All monopolies are either sanctioned by the state, or the monopoly firm is so good at what it does (lowest price, best quality), that it drives less efficient players out of the market (in the short term). Just look at Standard Oil. J.D. Rockefeller was so good at refining and (mostly) distributing oil that he drove his competitors to the wall (they didn’t go broke as they went crying to the state). This was good for consumers because it drove down the price of oil. Everyone was better off.

    How are we made better off by having bureaucrats run businesses. They have never proven they can do it in the past. Why now?

    • Bored 5.1

      Rusty, channeling the spirit of the Sainted Ayn are we?

    • Colonial Viper 5.2

      How are we made better off by having bureaucrats run businesses. They have never proven they can do it in the past. Why now?

      Perhaps you should go study the private sector failures of Enron, GM, Bear Stearns and Merill Lynch.

      When it comes to fucking up financials big time, no one does it like the private sector, who then has to go running cap in hand to the public sector bureaucrats.

      Man you Righties are talking as if the last three years didn’t happen and the private sector didn’t destroy over US$7 trillion in financial value from our collective assetbase, peoples savings and retirement funds.

      • Rusty Shackleford 5.2.1

        Bored, you are a genius. I bow before your intellectual prowess.

        Viper, moral hazard. Those guys acted like that because they KNEW they would be bailed out and there would be no consequences for them. It had nothing to do with the market. It was copratism through and through.

        If the govt is good at running companies, can you name a couple that started without tax payer funding, weren’t subsidised or bailed out, or received special privileges under the law?

        • Bored

          Finally correct Rusty, on a comparative basis to yourself, yes I could claim genius level. And I am very ordinary.

          • Rusty Shackleford

            So, you have nothing substantive to say? Good, I will keep that in mind next time you open your mouth.

        • Colonial Viper

          Don’t be silly, if the Government is going to run an operation it is going to do it with all the powers and resources available to it. Arbitrarily hamstringing itself would limit the success of the endeavours and no board of directors in its right mind would agree to that.

        • Draco T Bastard

          All companies started with taxpayer funding (The use of the communities resources) so why is it that the government has to remove that option?

          • Rusty Shackleford

            Gosh you really are grasping now.
            These guys seem to be doing OK.

            I’m not even saying the govt can’t use community resources (such as?), just that they shouldn’t be given giant dollops of free cash and more importantly, that shouldn’t be considered “efficient”.

            • Draco T Bastard

              The resources are represented by money you fucken idiot.

              • Rusty Shackleford

                A free society wouldn’t have a monopoly on the means of exchange.

                • Draco T Bastard

                  So anyone could print the money then?

                  • Rusty Shackleford

                    As long as it is backed by an asset, why not?

                    Where did Colonial Viper go? He was here a second ago.

                    • Draco T Bastard

                      You really are that stupid.

                      The government prints the money, backed by the communities resources (All of them), and uses that to start the business…

                      Um, why was the government needing money again? It could have just made the argument that the project was needed (It would do this anyway) and then get a vote to do it (It would do this anyway), and then call for “volunteers” (otherwise known as public servants) to do it who would then be fully supported in their needs by the community*.

                      Money isn’t needed – it’s not a resource. In fact, money and the associated greed is the problem.

                      *Of course, in a properly functioning community everyone is supported in their needs by the community.

            • Rusty Shackleford

              So on one hand inflation is bad, but on the other it’s OK for the govt to print money? Right.

              • McFlock

                It’s called “finding the balance”.  A concept you obviously have difficulty with, being a randian and all.

                • Rusty Shackleford

                  So you don’t actually have an argument? You can’t support your premises so you resort to ad hominems. The left really is intellectually bankrupt.

                  • McFlock

                    A: Inflation at e.g.50% p.a. is a major problem.
                    B: Govt stimulating the economy by “printing money” in times of recession can be an effective way to boost activity and confidence.
                    A can be avoided by applying B sparingly, but excessive use of B can cause A. This is why governments need brains, not just a nice smile and wave.

                    • Rusty Shackleford

                      Living standards are dictated by how much an economy produces not by how much money it prints.

                      I thought you guys rejected mainstream econ theory?

                    • McFlock

                      If by “mainstream econ theory” you mean “religiously applying bumper sticker slogans to complex systems” then yeah, consider it rejected. Although “you guys” just reveals your own stupidity.
                      Living standards are dictated by what an economy produces and how products and services are distributed within the economy.
                      Production is largely dictated by the supply of capital to different areas of the economy. Temporarily increasing the supply of capital stimulates production and, because workers need to be paid and increased supply lowers price, that increases the demand and kicks up the velocity of money within system. Control can be maintained juggling the lag between macrocapital injection and inflation. Or as we call it, government bond interest rates. Not the only tool in the box, and one of the cruder ones, but pretty fucking standard.
                      Still econ101, btw.

                    • Rusty Shackleford

                      Did it work?

                    • McFlock

                      Come on, you missed a step in your sophistry. You’re supposed to say “it’s never actually been tried” before you argue whether it’s ever worked. The longer you play sophistry, the longer you can feel good about yourself – after all, you need the feeling of smug superiority to distract you from the fact that you’re actually a bit of a dick.
                      BTW, your somalia pdfs missed the fact that the imperially imposed “state” boundaries were merely plastering over the previously extant social, cultural and religious structures. And the pdfs were also so old they missed the entire piracy and looting of marine stocks issue, not to mention something along the lines of Somalia “only” did badly in 3 of the measures (including infant mortality) but did well in 5 (including telephone landlines per head of population). Priorities?

                      [edit: btw – it has worked, it’s also failed. It usually fails when the right wing have left it as the only tool left to stimulate the economy.]

                    • Rusty Shackleford

                      I was asking if the stimulus worked. I know full well it has been tried, and it has never worked. You can compare the depression of 1920-21 and the depression of 1929-45 (notice the disparity in length of time?) to prove this.

                      As for Somalia, if you read the article you would see that every indicator improved except for 3. Adult literacy and school enrollment declined whilst access to water stayed the same. Infant mortality declined from 150/1000 to 114/1000. Last time I checked that was an improvement.

                      The colonial boundaries issue is a valid point, but I can’t quite link it to anarchy, myself. Maybe you could try? I would imagine lack of internal coercion would allow those peoples to live as they please. Somaliland to the north has seceded, after all.

                      Pirates? Wouldn’t they improve GDP? Oh yea, I forgot, the looters from the govt had to find something to loot, right?

                    • Rusty Shackleford


                      So that’s three black swans. Harding, Thatcher and Richardson.

                    • McFlock

                      I have learned to give RWNJs a lot of leeway, but now I’m pretty sure you’re being intentionally obtuse.

                      Piracy increases GDP in the same way hiring kids with AKs to protect your warehouse decreases unemployment. It’s an ineffectual “positive” compared with actually having a stable and safe environment to do business in, and having resources that aren’t looted by the guys with the biggest guns. This is why Sealord trawlers have nets, not 20mm cannon.

                      Yes, a. 11.4% infant mortality rate is better than 15%. However, when the 11% is in a 2000-2005 period (Leeson) and the other source you cite (independent. org) gives the year 2005 infant mortality rate as 13.3%, I’m not sure things are getting better. Particularly when the nation falls 7 places in the rankings of its peers. [edit: in the 25 year period of comparison, when most of its peers have govts]

                      And if you have an issue with adjusting the economy by controlling the money supply, take it up with the reserve bank. It’s not only used in depressions (large stimulous packages in economic collapse are like airlifts in famines – it means someone fucked up the logistics and planning, and it might not have enough of an effect to bail them out of trouble), it is not always suitable to be used, but it can have positive effects if well timed.

                      God you’re a fucking moron. Piracy increases GDP, then you call the govt “looters”? Fuck off.

                    • Rusty Shackleford

                      Ahm, yea. I don’t actually believe looting raises GDP. Although 99% of the people on this website seem to.

                      Which is exactly why Somalia was better off without a govt. This guy summarises the Leeson article well plus cites some more sources.
                      Somalia spent 90% of its GDP in weapons and torture in the 80s. Gossip was a capital offense. Life unequivocally improves for 15 years under statelessness. Then comes the late 2000s and foreign govts arm rebels within Somalia in order to install a govt. And you think the LACK of govt is the problem?

                      “if you have an issue with adjusting the economy by controlling the money supply, take it up with the reserve bank.”
                      This is like saying “Hey, Somalia villager. You have a problem that govt thugs raped your daughter, conscripted your son and stole your farm? Take it up with the govt. You fucking moron.”

                      “but it can have positive effects if well timed.”
                      Can you give an example. I gave three examples where the exact opposite was the case. And there are two blinding examples where it caused heretofore unprecedented depressions. We didn’t start having great depressions until we got central banks.

                      “Piracy increases GDP, then you call the govt “looters”? Fuck off.”
                      I was being facetious. Try again. If I asked you to work Mondays for me, and I got to choose what to do with the product of your labour, would you be anything other than a serf?

                    • McFlock

                      FFS I don’t have time for this shit. The prime examples of money supply control are interest rate adjustments that have been done on an almost quarterly basis for decades. Look them up – those are my examples. The Great Depression in particular had nothing to do with endemic stockmarket fraud and mob speculation, it was all about government regulation? Piss off.

                      So the infant mortality issue is sidelined in favour of arms expenditure and freedom of speech? How about AQ and other fundamentalist groups taking advantage of the power vacuum to gain control in the area in the last 10 years or so? They’re well known for their human rights interests and peaceful ways.

                      ” If I asked you to work Mondays for me, and I got to choose what to do with the product of your labour, would you be anything other than a serf?”
                      Another of the bullshit bumper-sticker vignettes that substutite for a coherent thought in the right wing.  Answer: depends – can I review your position as boss every three years and have a say in whether you lose your job?

                      Then you retort with “democracy is two wolves and a sheep deciding what to have for dinner”, and I respond “the free market is one wolf charging 50 sheep for protection, then pointing out that the only way he can be around them all the time to protect them is if they were in his stomach”.

                      Tell you what, if Somalia’s so great fuck off and live there.

                    • Rusty Shackleford

                      Did the interest rate controls work? Or did they distort the true price of money and give us the endemic boom and bust cycle and institutionalised inflation (confiscation of wealth form the poor to the rich)..

                      “The Great Depression in particular had nothing to do with endemic stockmarket fraud and mob speculation, it was all about government regulation?”
                      Can you give an example?

                      Infant mortality improved in Somalia under a stateless system. It improved from ’91 to ’05 and this chart shows a clear trend in this just passed decade

                    • McFlock

                      loving google are you? Found a source you like? You sticking with this one?
                      Because it seems to say that your randian utopia has the 5th highest infant mortality rate in the world, actually rising 2 places since 2003. Ah, here we are, right behind Angola, Afghanistan, Niger and Mali. That’s not a leaderboard you want to be first in. 

                      I’m not saying infant mortality didn’t improve – I’m just saying it improved globally, and Somalia’s infant mortality rate improvement is lagging behind the rest of the world (hence “gaining” a couple of places).

                      Try jumping onto something like (if it exists, no idea) for a bit. You’ve been hanging out on randian cultist sites too long.

                      Oh, and what is a stockmaket crash other than mob speculation? No new information coming out, except everone else’s panic.

                    • Rusty Shackleford

                      Well, Somalia has improved post govt.

                      Why don’t you jump onto (I’m sure it exists). Or better yet I’ve debunked everyone of your arguments (especially the Keynesian ones). The Great Depression was so much more than a stock market crash. GDP and employment NEVER recovered under your regime. Only after WW2 when the govt lifted the New Deal policies did the economy rebound. The exact opposite happened in 1921. how do you rationalise that?

                    • McFlock

                      Some factors of Somalia have improved since the central state was replaced by cultural structures, warlords and religious armies. But the rest of the planet seems to have improved a lot more. Hmmm. In the space of 25 years Somalia went from 31/42 african nations worst infant mortality to 217/222 (global). That means it dropped at least 6 places in the world infant mortality rankings while things were “getting better”. Can things improve without government? Of course. Can they improve more rapidly than in those areas with government? You seem to have demonstrated otherwise. Congratulations.

                      I’ve been to mises etc – they are dumb in the same way you are: they look at one figure, say “this got better because the state fell apart”, and ignore the context of other factors.

                      The only thing you’ve “debunked” is the concept that you’re anything other than an obssessive nutbar who cherry-picks data to suit his own religiously-randian idiocy, to the point of blinkering out immediately adjacent data (in his own data sources) that directly contradict his worldview.

                      You wanted an example of mob speculation in the Great Depression. I pointed out a fucking great stockmarket crash. I didn’t say that was the full extent of the Depression. You believing I did say that was just another example of you being an idiot.

                • The Voice of Reason

                  The only thing you’ve succesfully debunked is your own credibility, Rusty. Have you even thought for a moment how anything good happens for the children of Somalia? It requires massive intervention from UNICEF, which is part of the United Nations, which is a  form of global governence.
                  So no effective national government, but instead a reliance on welfare from every other government in the world. There’s your Randian New World right there; a hellhole with only international government intervention making a difference. Do you ever wonder why only saddoes support Rand? Could it be because the philosophy makes no fucken sense at all, except from the perspective of the empathy deprived?
                  Psycho killer, qu’est-ce que c’est?

                  • Rusty Shackleford

                    Could the stock market crash not have been caused by the liquidity the fed was pumping into the economy? Speculative bubbles have been linked with expansions of the money supply in almost every case.

                    I ask you, how can you cling onto your Keynesian beliefs, when they have been demonstrably debunked by reality. You can’t give a single example of when it has worked, whilst I can give three of where the exact opposite worked.

                    • McFlock

                      I change the oil in my car regularly. Shortly after one oil change, the car breaks down. You infer that the oil change caused the failure. This is premature – maybe the injector was clogged. Maybe the oil needed to be changed more frequently to avoid problems. Or maybe I did it badly and broke the vehicle in the process. Maybe it’s got nothing to do with oil at all – the alternator might be broken. Because the engine will definitely go bing if there’s no oil, and pretty badly, too

                      If the NZ’s reserve bank has been pumping money into the economy constantly, and you can point to a few examples where it might or might not have failed (oh, that’s the other reason to look beyond US nutbar sites – the world isn’t only american), then maybe every other point in time is an example of its success.

                  • Rusty Shackleford

                    The difference between a car and an economy (I presume that is the analogy you are drawing) is that we understand intricately the processes that go into making an automobile produce forward motion. A single person can fathom all the parts of a car. A single person or group couldn’t possibly fathom every single intricate part of a complex system like an economy. Changes in the system of an automobile have obvious consequences. Not so for an economy. this is why no govt has ever been able to centrally plan society. Can you name one?

                    I don’t even have to point to examples of where your policy has failed, I simply have to point out that the exact opposite of your policy has demonstrably cured a recession on more than one occasion. you should be responding to me, not the other way around.

                    • McFlock

                      I’m not talking about centrally planning an economy. Focus.

                      Let me get this straight – you state that an economy is so complex a system as to be impossible for an individual to comprehend, and then in the same post claim that:

                      A apparently caused outcome C; therefore
                      B cannot also cause outcome C even at a different point in time?

                    • handle

                      My argument is so powerful, etc, etc

                    • Rusty Shackleford

                      I love it. It’s almost as water tight reasoning as “I’m right and you are wrong because you are a fuck faced moron.”

                      [lprent: Nope – I think that handle is correct. You seem to be descending into the “my argument is so powerful that it is obvious”. Don’t use that style because I tend to class it along with the “pwned”, “owned”, etc arguments as not only being the purview of the inept, and also deliberate flame war starters.

                      And if you can point to a comment that you think has a pointless insult (ie where you think that there was no point made in the comment – that the comment was just an insult), then draw it to my attention and I’ll decide if it is. I warn or ban for those. ]

                    • McFlock

                      I assure you, I have no idea what you look like.

                      Have you decided which of your two mutually contradictory propositions you want to stick with – that an economy is too complex to comprehend, or that an economy is such a simple  system that a particular output can only be generated by one specific input? 

                    • Rusty Shackleford

                      Lprent, if I remember correctly you called me a muppet in another thread. A thread that has since gone deathly quiet because the premise of it was proved wrong.

                      [lprent: You will have to learn to distinguish between me operating in my role as a moderator and when i am writing comments. Wasting moderation time by arguing with moderators in moderation mode is a fast way to find out how we remove that problem. Read the policy.

                      FYI: The pageview and comments wind down drastically for the weekend on Friday night except sometimes on light weight posts. That is why they are posted on Fridays. ]

                  • Rusty Shackleford

                    Isn’t not doing anything the opposite of an input?

                    • McFlock

                      I have a pot of water. I add energy to it. It boils. Volume decreases.
                      I have a pot of water. I do nothing. Volume stays the same.
                      I have a pot of water. I take energy from it. It freezes. Volume increases.

                      That’s what we call a twofer – different inputs with the same result, and pointing out that the opposite of an act is not necessarily the absence of any act.

    • felix 5.3

      It makes no sense to have multiple water pipes to your house.

      Ditto power cables.

      Ditto phone lines.

      You think we only have one of each because they’re sanctioned by the state to be monopolies? Lol.

      • Rusty Shackleford 5.3.1

        How much infrastructure have you installed? It was the norm until local govt started instituting ‘natural’ monopolies.

        • felix

          How many power lines do you think you’d have to your house had the decision been left to the market?

          The answer is probably one, or none.

          That’s why it’s a natural monopoly.

          • Rusty Shackleford

            Did you read the article. American cities in the 19th and early 20th centuries had dozens of electric companies. I think the problem is lack of imagination, nothing to do with people acting freely.

            • bbfloyd

              do you ever actually analyse your own data? how big is the usa? how scattered were the population centers?

              are you saying that nz developed the same way that the usa did?

              so how many power companies operated in any one state? and for how long before mergers started to occur?

              have you noticed that nz is actually more sparcely populated as most states in the usa?

              any other factors you need to get started on your research, just let me know.

              • Rusty Shackleford

                OK, show me the data on state monopolies. Shouldn’t be difficult because (apparently) they are awesome.

                • Colonial Viper

                  Yeah Fonterra owes its existence to a statutory monopoly. The leading light of NZ exporters.

            • felix

              I skimmed the article Rusty, it didn’t seem relevant to our experience.

              You’re still dodging the question btw, we have competing power companies here too.

              Regardless, the power lines that provide the electricity to your home (which is what I was talking about all along) are a natural monopoly as it makes no sense to duplicate them.

              You can lay any abstract operational models you like over the top of this physical reality but it doesn’t change that simple underlying fact.

              • Rusty Shackleford

                So, you didn’t read the article, then dismiss it as irrelevant without explaining why. That is intellectually rigorous.

                Can you explain why it make no sense to duplicate them? I would imagine that the problem of duplication would be somehow solved by technology. But since you are so eager to stifle the market, no one ever bothered to solve the problem. But, you can’t explain why it is a problem in the first place.

                “You can lay any abstract operational models you like over the top of this physical reality but it doesn’t change that simple underlying fact.”
                This is a hoot. I gave you a concrete, real world example and you dismissed it without reading it. Then you accuse me of laying abstract models, when you lack any theoretical model whatsoever (beyond big poppa guv will make it all better).

                • felix

                  I don’t have to read every fucking word of your article to know it wasn’t about the same thing I was talking about, Rusty.

                  If you don’t understand why it makes no sense to run a dozen different powerlines from a dozen different sources to your house then I can’t be bothered with your faith-based opinions.

                  • Rusty Shackleford

                    So you have an answer for neither of my questions. Nor a coherent frame work for why a govt sanctioned monopoly is better than freedom. Good to know.

                    • felix

                      I don’t need to Rusty, I’ve rejected your premise that the monopoly I described exists because of govt, and nothing you’ve written has contradicted that rejection.

                    • Rusty Shackleford

                      You’ve said it doesn’t make sense to have more than one firm delivering electricity. Nowhere have you defended this premise.

                    • RedLogix

                      The strict economic argument is quite interesting.

                      But the argument in favour of monopolies can be sumarised simply:

                      1. All prices consist of a fixed component and a marginal component. The lowest price per unit is obtained by the firm with the lowest sum of these two components.

                      2. In the electricity industry for instance, and most natural monopolies, marginal cost fall with increasing volume. Therefore the largest possible firm will have the lowest marginal cost.

                      3. Each firm in the market will need to recover it’s fixed costs, which are additive for all firms. The total market needs to recover the sum of all these costs. The fewer the number of firms the lower the total fixed costs will be.

                      4. One firm does not need to expend costs on sales and marketing.

                      5. One firm that is owned by the state (and indirectly therefore all of it’s customers) does not have to return profits to shareholders outside of that market. Which retains greater total wealth for the owner-customers.

                      Neo-classical economics is rooted in a number of gross simplifications, ie equilibrium pricing and rational agents. Both are totally flawed assumptions, and the resulting theory is a crock of shit. As the real world repeatedly demonstrates.

                    • Rusty Shackleford

                      As the (non neo-classical) article I posted points out, the economic reasoning for natural monopoly was applied post hoc in order to justify granting a govt monopoly. We actually agree, except we see different ends stemming from the rejection of mainstream economics.

                    • RedLogix

                      You asked for someone to engage on your substantive point. I did but evidentially you have not read a thing I wrote or linked to. Waste of time.

                    • Rusty Shackleford

                      What evidence?

                      I didn’t read your link because it was 40 odd pages and I accepted your summary of it on face value. It is the mainstream view. Which I don’t agree with. Except for point 5. I think you added that in. In any case, it should be easy to provide evidence of really well run govt companies that needed no tax payer start up capital (you can have this one if the paid the capital back), were never bailed out or received subsidies and operate under the same laws as private companies. It should be easy if your analysis is correct.

                    • RedLogix

                      Read the paper. It’s a far more technical and robust argument.

                      The five points I made are scarcely ‘mainstream’. Mainstream neo-liberal economics explicitly rejects all five points, and while you choose ‘not to believe’ them, that’s just hand waving. You fail completely to say why you don’t believe them.

                      Your requirements for an example are ridiculous. Exactly where is a state-owned enterprise going to raise start-up capital if not from the tax-payer? Any other source of capital would not be a state enterprise by definition. Such a self-contradictory requirement is bad faith.

                      And what private sector company never started up without shareholder capital? Or required further injections of capital, or sustained losses during in early years?

                      And why should a state enterprise operating as a monopoly operate under exactly the same regulations as competitive private sector firms? They would be operating in totally different environments with totally different lines of accountability. It would make no sense at all to apply the same rules.

                      And even your definition of ‘success’ is not going to be the same. A private entity has only ONE narrow measure of success… shareholder profit. A public sector entity can be measured across a far broader range of economic outcomes spread over the whole of the society that owns it.

                    • Rusty Shackleford

                      I would say the measure of success is whether the firm produces electricity at a cheaper rate than the market otherwise would. If it needs free cash and special privileges it isn’t likely to be doing that. Otherwise, what is the point of owning an electric plant and the means of distributing the electricity? If the state can’t produce and distribute electricity at a cheaper rate (within the bounds of the rule of law), is it not true that the govt is actually destroying resources and making the country worse off?

                    • RedLogix

                      I would say the measure of success is whether the firm produces electricity at a cheaper rate than the market otherwise would.

                      A monopoly has the lowest fixed costs, the lowest marginal costs, access to the lowest price capital, no sales and marketing costs and and does not have the deadweight of profit.

                      It is in fact impossible for private firms operating in a competitive market to produce a greater total wealth than a monopoly.

                      The reason why we tolerate the inefficiencies and ‘competitive destruction’ of the private sector is simply that prior to the advent of computers, the planning task was too complex for centrally planned economies. (Ever wondered why the centrally planned/managed Chinese economy is by far the best performing in the world these days?)

                      In the New Zealand electricity industry we only maintain the illusion of a competitive market. While there are a small number of generators, and a somewhat larger number of customer and spot-market is operated by Transpower…. it is nothing like the ‘free competitive market’ you have in mind.

                      For a start the “Rule Book” that Transpower uses to run the market is the most insanely dense and complex document .. I’ve seen it.. it’s literally inches thick. The reason why this document exists is that without the market rapidly degenerates into game-playing and wild instabilities.

                      Effectively Transpower runs the system as a monopoly, while we are still stuck with extra costs of multiple firms in the market. As evidenced by the fact that electricity prices in this country has risen much faster than inflation over the last decade or more.

                    • Rusty Shackleford

                      1.So, this is true of a private monopoly also? Why? Why not?

                      if not….
                      2.Why don’t we extend your logic to all goods and services? I mean, it’s easy to extend the definition of public good to almost anything.

                    • RedLogix

                      Why don’t we extend your logic to all goods and services? I mean, it’s easy to extend the definition of public good to almost anything.

                      Fair question.

                      I partly answered in an edit to the above comment:

                      One reason why we tolerate the inefficiencies and ‘competitive destruction’ of the private sector is simply that prior to the advent of computers, the planning task was too complex for centrally planned economies. (Ever wondered why the centrally planned/managed Chinese economy is by far the best performing in the world these days?)

                      Well obviously that’s not a whole answer. It was the Labour Minister of Finance Walter Nash who once famously asked a group of students, “Would we want the State to run corner dairies?”. Almost certainly not.

                      Another part of the answer is that if a corner dairy fails the impact is localised to the owners and a handful of customers.

                      On the other hand if an public utitlity fails it has a massive impact across the whole economy. This gives the State a high political incentive to mitigate the risk. This is exactly the kind of long-term, multi-generational, large-scale investment the State is very good at and the private sector shies away from as too risky.

                      It’s also worth observing that in the real world, all mature markets tend towards a relatively small number of firms. Witness how the grocery business rapidly morphed into a duopoly in the last few decades. In other words as close as possible to a monopoly as we currently tolerate politically. This happens simply because its the most efficient arrangement.

                      It’s only in new immature markets where there is a very high premium on innovation, or a market with a very low barrier to entry combined with low fixed costs and rising marginal costs, that the market supports a large number of firms.

                    • Rusty Shackleford

                      Computers are only as smart as the people programming them.

                      China is getting richer because they moved away from central planning towards decentralised markets. Though, the still do wacky Keynesian crap like build cities that no one lives in (boosts GDP after all).

                      I’m under no allusions that the market for electricity in NZ is competitive. It is still heavily regulated after all.

                    • RedLogix

                      Computers are only as smart as the people programming them.

                      True. Smart people can do astounding things with computers; especially large scale complex tasks…like planning a market.

                      China is getting richer because they moved away from central planning towards decentralised markets.

                      Almost all large Chinese enterprises have a very large CCP shareholding. Superficially much of the Chinese economy has been de-centralised, at the same time crucial aspects like their banking sector remain tightly controlled.

                      And in the last few decades vast state resources have been poured into monitoring, analytical, penetration IT systems. And while the West has analogous systems (like the NSA) they are largely conceived in defense/military terms. While this also true in China, their definition of State interest is much broader and fully encompasses the commercial world as well.

                      I’m under no allusions that the market for electricity in NZ is competitive.

                      Absolutely… because real world experience demanded that degree of regulation. The ‘free market’ simply did not work.

                • Draco T Bastard

                  So, you didn’t read the article, then dismiss it as irrelevant without explaining why.

                  It’s irrelevant because it’s typical delusional market theory.

                  • Rusty Shackleford

                    You’re right because you are right? You must be a hoot at parties.

      • queenstfarmer 5.3.2

        You are quite right but “sanctioned” has two meanings. It is correct to if it means sanctioned as in “tolerated” rather than endorsed from the start.

        • felix

          True, from the context of Rusty’s comments I took him to mean endorsed from the start.

    • Draco T Bastard 5.4

      This was good for consumers because it drove down the price of oil. Everyone was better off.

      The existence of Anthropogenic Climate Change would indicate that everybody is actually worse off.

      • Rusty Shackleford 5.4.1

        Sure, if you buy that line.

        • Draco T Bastard

          It’s not a question of “buying the line” but a question of believing what the scientists say who have studied the facts of it. Disbelieving it just proves that you’re insane because disbelieving reality is delusional.

    • MrSmith 5.5

      “There is no such thing as a “natural” monopoly. All monopolies are either sanctioned by the state, or the monopoly firm is so good at what it does (lowest price, best quality), that it drives less efficient players out of the market (in the short term).”
      In the short term? Once you have a monopoly who wouldn’t want to hang to that golden goose for as long as you can Rusty, then do whatever it takes to see the competition grovel and crawl at there feet till the Government or People have to step in and do what?

      • Rusty Shackleford 5.5.1

        I thought I had responded to this?

        By what mechanism can a firm hold onto its monopoly power without either producing the best good at the cheapest price or coercive force?

        • Draco T Bastard

          Telecom managed it for several years by a) being a natural monopoly and b) being essential. Others only really started getting into the market when the local loop was unbundled and even then competition doesn’t really exist. The lines still belong to Telecom after all and they still get their profits from leasing the line out.

        • MrSmith

          I seem to recall the Warehouse moving into food until there was a threat to take them over.

          Also in reply to your other comment below:
”Try living in the even more heavily cartelized South Korean grocery market.”

          So your saying things could be worse, we could be living in south korea, well that settles it then.

  6. Bored 6

    Hey Rusty, Gos etc, could you please have a discussion about rentier behavoir, the merits and demerits of….it has a dreadfully large degree of significance to this debate but so far you have avoided the issue totally. I will come back in an hour or two to see if you make any sense.

    • Rusty Shackleford 6.1

      Umm Krugman’s a douche? Fucked if I know.

      • Bored 6.1.1

        Well Rusty, you have done an atlas shrug, et voila, we are no wiser. You are proving not only a troll but a vacuous one to boot. Try swapping your beloved Rand (who couldnt even bend her own twisted logic to her pitiful emotional trainwreck of a life) with something of substance. As Shakespeare might have said of her works “It is a tale..Told by an idiot, full of sound and fury,
        Signifying nothing.”

        Good night.

  7. mikesh 7

    Most electricity is generated in this country by generators powered by river flow. Given that rivers, and their capacity to generate power, are owned by the people, it seems sensible to view power generation as a natural\public monopoly. The same would not apply to telecommunication companies, but given the amount of investment needed, duplication of that investment would seem silly in a small country such as ours. Perhaps in this case a regulated monopoly would be appropriate.
    However it is possible that Telecom became privatised because the government of the time sold it for far less than its full value.
    Someone above mentioned supermarkets. It is actually quite possible to operate supermarkets as cooperatives, so perhaps these should be community owned as well.

    • Rusty Shackleford 7.1

      Yay, I can’t wait to have my public groceries turn out exactly the same as my public school!

      • Rusty Shackleford 7.1.1

        Didn’t he go to Wesley College or something? I’m no fan of the man. He has no education policy that I know of, and if he does it’s probably hypocritical in the extreme.

      • MrSmith 7.1.2

        Running down Public schools is a bit desperate Rusty, I could name hundreds of “great” human beings that where educated at public schools, yes including our PM.
        Your food analogy is a perfect example though of what the free market has brought for us in New Zealand, we have a (Duopoly/cartel) .

        • Rusty Shackleford

          Public schools are shite. Just because a few people managed to get an education despite the system is not a tick in the public school box.

          There are major players in the NZ grocery business but there are alternatives. And the price and variety seems OK. Try living in the even more heavily cartelized South Korean grocery market. Fuck me. Even the small players are cartelized. However, considering the price of road travel here (you can’t move fruit by subway), maybe it’s not so bad. I think it’s a mistake to jump to the conclusion that something so intricate can be centrally planned. Who exactly would you trust with that task? I can’t think of a single person who could do it. But I can think of about 8 million who could.

          • lprent

            Like my entire family for many generations? You really are a bit of a dimwit for making such a sweeping statement.

            Incidentally, some of the biggest screwups I run across often seem to have been through private schools. It is like they can’t see the obvious pitfalls in front of them.

            • Rusty Shackleford

              All I’m saying is that public schools are expensive for the product you get. Also, that it is absurd to expect a one size fits all approach to be efficient. We don’t all eat the same food or drive the same car.

              • lprent

                That is why you have courses, libraries, sport grounds, etc. Hell, NCEA is completely modular to make it easier to shape your own courses.

                I suppose if you’re only into listening to authority kind of a dribbler, then I guess you can’t make something of a public school. May as well go to a private one.

                • Rusty Shackleford

                  Whose authority?

                  • lprent

                    Any. The main thing I notice about private schools when I am looking at friends kids who send them there is that the schools seem to be dedicated to using up kids time. And it appears to be semi mandatory through social and parental pressure. Could be from the sample.

                    I also notice some adults with the benefit of private schooling showing an alarming lack of flexibility in their thinking. Again could be the sample. But I also don’t see much upside to adults from private schools either.

                    My opinion is that they are probably good if you need an extended baby sitting service. It would have really gotten in the way of actually me getting an education. Seems to be the same amongst most of the kids in the family.

                    It is more fun and quite a lot more effective over the longer term having time to play around with things when you’re younger. I think that private schools in NZ that I have seen are an impediment to what I consider is a good education. But I think that they’d do pretty well for kids who require order and structure. Just not a usual style around most of my relatives kids.

          • Macro

            Having worked in private, public, independent schools, and home-schooled environments in the primary, secondary, and tertiary sectors for a total of 30+ years I would have to say you have no idea of what you are talking about. Perhaps the best educative experience was in the home-school, closely followed-up with a private school (but not your average private school!), the public schools were very comparable and offered a very sound education. The worst had to be a private school – full of it’s own importance and more interested in its image rather than education. I left after 3 years along with 25% of the staff from a staffroom of 120. I never worked in another school that had such poor staff morale. It maintained its academic success – not from offering anything substantial from an educative point of view – the teaching programmes differed little from the state school I had come from – but from the selected scholars. There were few students with learning difficulties and all had average to above IQ.

            • Rusty Shackleford

              Macro, I’m just starting out as a teacher. It doesn’t surprise me you would rate home schooling highly. In my experience there are just so many kids alienated by the whole production line nature of public schooling. Many of them simply don’t want to be there, which of course doesn’t mean that they don’t want to learn. I’m not sure of the figures per pupil in NZ but in come states of the USA you could hire a private tutor for the amount they spend per student.

              Obviously some public schools are very good. Even a broken clock is right twice a day. I went to an extremely good public middle school and a decidedly average semi-private high school. It was the personalities in charge that carried the day. Not the planning from on high. I would love to see money going into the pockets of parents so that they can choose those personalities that run our schools.

              • Macro

                I don’t know which country you are in Rusty, But in in the late 1980’s The Lange Govt introduced “Tomorrow’s Schools” which had the intent to do precisely what you advocate. School Boards are elected from the parents and the local community. So what more do you want?

                By the way I’m still not convinced that it was an improvement over the previous system

              • Colonial Viper

                Obviously some public schools are very good. Even a broken clock is right twice a day.

                Yeah and this post of yours is not one of those two times.

                Why don’t you look up how well NZ schools do in the international literacy, numeracy and science education benchmarks before making dumb statements like this.

                • Rusty Shackleford

                  Why don’t you bring them up? If it would so defeat my argument, wouldn’t you enjoy it?

                  • Colonial Viper

                    Not here to defeat your argument, just to defeat National this year.

                    Can’t be fucking arsed to try and “convince”, “win over”, “save”, “convert” “defeat” any Right Wingers from now on, waste of time and effort far better used to defeating you guys where it counts in November.

                    • McFlock

                      But CV, surely your only self worth comes from winning internet victories on obscure philosophical issues?

                      One thing I found funny in one or two of rand’s films was the fact that the roarkoids absolutely had to explain to everyone else exactly why they didn’t need anyone else’s approval. Methinks they doth protest to much.

                    • Colonial Viper


                      One problem I have identified with supposedly lefty governments is that they get into power then really try and go out of their way to be “bipartisan”, to show that they are listening and “consulting” with everyone, to demonstrate that they are not “ideological”, and that they aren’t afraid of burning their most keen left wing activists who actually got them into power in order to reach the mythical “centre”.

                      Frak that, the Righties bulldoze their agenda through, consistently serve their core constituencies of the wealthy and elite daily, ignore the Left and appease the centre on a superficial basis only by mouthing promises which are never fulfilled.

                      And they are very good at it.

              • Macro

                “I would love to see money going into the pockets of parents so that they can choose those personalities that run our schools.”
                If by that statement you mean vouchers – then that is the most stupidest statement you have made so far. they don’t work.
                I could list other examples but frankly can’t be bothered – it was a quirky idea dreamt up by neo-liberals in the 1970’s and every place that has introduced it has quickly seen it’s an abject nightmare.

                • Rusty Shackleford

                  Yea, vouchers. Charter schools seem to be popular and doing OK academically. The Washington voucher system that Obama nixed seemed to be doing OK. I’m just knee jerk opposed to coercion. And public schools are fairly coercive.

                  • Colonial Viper

                    I think the system should be changed to advantage profit making private sector providers, and to take increasing levels of resources away from the schools that most children rely on.

                    I’m just knee jerk opposed to coercion.

                    You are right, children should have the “freedom” to be disadvantaged at every turn, and also be “free” to suffer the socioeconomic disadvantages that they may have been born into.

                    Anything else is “coercive”.

                    The 200,000 New Zealand children growing up in poverty should also be given the “freedom” to eat cake every night.

                    Rusty I applaud your support of these “freedoms” and your fight against “coercion”.

          • RedandBlack

            Rusty – shouldn’t you be doing some marking? Or lesson planning?

            Ayn Rand’s theories were a reaction to the Russian Revolution – as were Friedman’s by the way – if you don’t believe me look up where they were born. Both were true reactionaries. One step away from fascism.

            • Rusty Shackleford

              Ah, yea. Communism in Russia kind of sucked. As it does everywhere. And, communism and fascism aren’t opposite ends of the spectrum. They are simply different ways of doing the same thing. Centralising power in the hands of the state.

              • The Voice of Reason

                Idiot. Two totally different concepts. In one the state acts in partnership with and on behalf of capitalism and in the other capitalism is done away with.
                The second one, communism, has as its ultimate goal, the removal of the state. A bloke named Marx wrote quite a bit on the subject, as did VI Lenin a few years later. The intention is the withering away of the state and it’s replacement with democratic, self supporting and co-operative societies.
                The first concept has contempt for humanity at its heart. A belief that the masses are there as fodder for the true believers. It’s somewhere between stupid and criminal, and in the case of Rand herself, adjacent to mental illness. I suggest you visit the German and Polish death camps before you venture opinions on these matters in such a glib way. And you might stop to consider why Stalin remains the most popular dead politician in Russia. Hint: it’s because he stopped German fascism.

                • Rusty Shackleford

                  They still have the same goal. Centralising power with the state.

                  If communism is so pre-occupied with withering the state, why does that have to include expanding the state to such an extent?

                  If communism is so awesome, why does it have a higher death rate than fascism?

                  • The Voice of Reason

                    D’oh! They don’t have the same goal at all. You really should try comrehending, rather than just reading.
                    Consolidation of power in the state is a stage on the way to communism. It’s needed in the absence of the capitalist structure, but it’s a means to an end. Note that I am talking about the theory of Marxism, not the actuality of the partial process as observed since the beginning of last century.
                    As for the death rate, whatever the fuck that means, your side continues to kill to this day. Something you can’t say about Uncle Joe.

                    • Rusty Shackleford

                      How do they not have the same goal?

                      Hitler massacred around 6million people.
                      Mao something like 20 million.
                      Stalin something like 10 million.

                      That isn’t even including the small time communist despots. The common theme I see is statism.

                      What exactly are you construing my “side” to be? I’m anti-state. States are still killing people, yes. But, I’m not on the side of the state, as you are. So, it is really your side that is, and always has been, doing the killing.

                    • lprent []

                      There is a much more straight forward and much more obvious correlations in there.

                      Length of time in office.
                      Hitler ~12 years
                      Mao ~30 years
                      Stalin ~25 years

                      Populations imposed on.

                      I think that you’re simply cherry picking the conclusion (communists vs fascists) that you wanted rather than actually engaging your brain.

                    • The Voice of Reason

                      Yes, yes, yes! Everything that isn’t the one true religion is stateist, and can be lumped together without further thought. No wonder Randism has take such a hold on the world’s imagination!
                      Hope you don’t mind if I repeat half a line, Rusty.
                      “Note that I am talking about the theory of Marxism …”
                      I’m guessing it’s pissing you off that your own wet dream is also the ultimate goal of communism. Doesn’t compute, eh?

                    • Rusty Shackleford

                      Well, ah, err I would posit that one life prematurely ended is one too many. But, um, carry on I guess.

                      I don’t differentiate between communism and fascism. They are both power concentrated in the hands of the state.

                    • Rusty Shackleford

                      I don’t think it is incorrect to state that fascism and communism (the type we have experienced, anyways) are statist ideologies.

                      Is it not true that, in his major works, Marx never advocated for direct state involvement in the move towards “true” communism? More that the workers should agitate in that direction, in an evolutionary nature? Therefore, state intervention isn’t even Marxist.

              • The Voice of Reason

                Interesting question. Well googled, that man!
                I would say Marx saw an evolving role for the state in the transitional phase (from capitalism to socialist control). But advocated is too strong, more like an event he expected to happen on the way to pure communism. A means to an ends.
                State intervention is not Marxist. It’s a term I associate with Social Democracy vs Conservatism debates in western democracies.
                Anyhoo, a debate for another time, maybe?

              • RedandBlack

                You have an appalling sense of history Rusty. Alisa Rosenbaum (Rand) was a refugee from Russia and her anger drove her to advocate the opposite extreme to Bolshevism.That does not make her correct – just from one extreme to the other.

    • Draco T Bastard 7.2

      However it is possible that Telecom became privatised because the government of the time sold it for far less than its full value.

      It was definitely sold for far less than it’s full value. I doubt if there was any conglomeration around that would have been able to afford it if it was sold for it’s full value.

      Someone above mentioned supermarkets. It is actually quite possible to operate supermarkets as cooperatives, so perhaps these should be community owned as well.

      I’ve been thinking that lately. Essentially have it so that it’s government run market where the producers come to sell their goods. Could be done as a pure government service (Fully taxpayer supported) or have a small fee. I think, as it’s essentially a large ongoing fixed cost, full taxpayer support is the best option.

      • Macro 7.2.1

        Sound idea Draco – We have a very good Farmers Market in town and I buy most of what I need there, topping up the odd extra at a bulk food store. I choose the locally produced milk from the greengrocer, and meat from a local butcher which is as good as the meat I had when I had home-killed. Actually there is almost no need to use a supermarket if your fortunate to have a local market. The produce is far superior, compares very favourably in price and I get to meet the people who produce it. I estimate a reduction in my food bill of about a half! And I get to eat very well.

  8. handle 8

    It is an appalling cheek for delusional Randians to continue peddling their twaddle and just ignoring the recent global economic collapse overseen by fellow acolytes of their cult like Alan Greenspan. Get off the grass.

    • Rusty Shackleford 8.1

      Well, ahhh, erm, I hate to point this out to you champ, but if you had read word one of any of her books you would know that there is nothing Randian about central banking.

      • handle 8.1.1

        At yet you feel compelled to keep pointing out that the world is flat and revolves around you like a self-centred teen. Just as popular at a party too.

        • Rusty Shackleford

          What’s that, nothing substantive to say except petty insults? You made an error by equating Rand with ideas she never had. Just close your mouth and stop making a fool of yourself.

          • handle

            You’re a joke. Off to Somalia with you.

            • Rusty Shackleford


              A little old, but Somalia isn’t a very good stick to beat a libertarian with. Off to North Korea with you! See how that works?

              • Colonial Viper

                North Korea is a military dictatorship.

                Score 0 on that one mate.

                • Gosman

                  I love how leftists disown any hard left wing inspired society as soon as it becomes obvious that the only way to maintain such a state is to use excessive coersion.

                  • Rusty Shackleford

                    North Korea is basically the full embodiment of their ideology. I love how leftists love to use Somalia as a stick to beat (real) liberals with. The fact is Somalia had to destroy its govt before it could start to grow.

                    • lprent

                      Somalia has had a dead government for quite some time. Getting on for more than 20 years. I haven’t seen any signs of it growing.

                      North Korea looks far more like a standard military based dictatorship / monarchy (you can see such Khanates throughout the region over history) than anything else. The communistic parts of it are just like Fiji hanging democratic trappings over their military dictatorship – they have no meaning apart from rhetoric.

                    • Rusty Shackleford

                      Compared to its neighbors it is excelling in many areas. Including the so called “natural” monopoly of telecommunications. I still wouldn’t want to live there. But it is better now than when it had a govt. Infant mortality, mortality during child birth, access to sanitation, clean water and health services have all improved.

                    • rosy

                      Compared to its neighbors it is excelling in many areas…. But it is better now than when it had a govt. Infant mortality, mortality during child birth, access to sanitation, clean water and health services have all improved.

                      Have you go a source for that? Wiki says civil war divided the country in 1991. The WHO website for e.g has Somalia’s 1-5 mortality rate at 180/1,000 compared to it’s neighbour Ethiopia’s 104/1,000 and life expectancy at 51 for males and females whereas Ethiopia’s life expectancy is 53 (m) and 56 (f). 1-5 mortality and infant mortality (109/1000) in Somalia are the same now as they were in 1990 according to unicef.

                      Infant and maternal mortality rates are among the world’s highest. The under five mortality rate is a staggering 225 per 1,000 live births. The main causes of death are diarrhoeal diseases, respiratory infections and malaria (an estimated 87 per cent of Somalis are at risk of malaria).

                      Less than 30 per cent of the country has access to safe water. Malnutrition is rampant; acute malnutrition afflicts 17 per cent of children.

                      Net primary school enrolment is estimated at only 13 per cent for boys – and only 7 per cent for girls.

                      Clan rivalries have internally displaced 375,000 people, forcing them into tenuous living situations where they face hunger and human-rights abuses.

                    • Rusty Shackleford

                      Thanks for the stats Rosy. It’s nice to come across someone who is interested in finding the truth, rather than shouting and name calling. Let me try and find the stats I am working from. My understanding is that, although things are evidently bad in Somalia, the trend is good.

                      These both back my claim…

                      but beware, they are both partisan (and giant pdfs). I’m sure you will take them at face value, though. I can remember watching a youtube video of a guy summarising a much more recent UN (I think) report. I will try to dig that up as well.

                    • rosy

                      Thanks Rusty – big docs and off-thread, but interesting none-the-less. The first quick point of course is that tribal rulers (rather than anarchy) may be better than forced integration and dictatorships – suggests breaking up the country a la Ethiopia/Eritrea and North/South Sudan. I haven’t got time to read them thoroughly just now, but will do.

                    • Rusty Shackleford


                      This is the video I was thinking of. Unfortunately it summarises the Gleeson article and isn’t from the UN (or whatever). Gleeson is slightly out of date (’05), and things seem to have taken a turn for the worst in Somalia lately because, ahm, err, they are trying to impose a govt. So, yeah. There’s that.

  9. Rusty Shackleford 9

    Can you describe the mechanism by which firms hold a monopoly in the long run? The only way I can see is low prices/high quality. Or force. That force is generally of the govt kind.

    • Colonial Viper 9.1

      Can you describe the mechanism by which firms hold a monopoly in the long run? The only way I can see is low prices/high quality. Or force. That force is generally of the govt kind.

      By buying out the representatives of the people and making government institutions just another one of their agents.

      • McFlock 9.1.1

        Another way to maintain a monopoly position is to actively purchase possible startup competitors.

        • Gosman

          I’d suggest that isn’t a very viable long term investment strategy. Anybody who was interested in making a quick buck would just threaten to set up a start up and then take an instant profit after the monopoly bought them out. Eventually the owners of the monopoly would see their capital dwindle to the point that continuing to use this approach wouldn’t be possible.

          • McFlock

            That’s where due diligence comes in, identifying the actual threats as opposed to “Compu-Global-Hyper-Mega-Net”.

            And nothing is permanent – but everyone tries to delay “eventually” for as long as possible, including monopolies.

        • Rusty Shackleford

          McFlock and CV. Can you give an example of a firm that did/does this?

          I would say anti-trust laws are abused for political gain far more often than firms abuse their monopoly power.

          • McFlock

            Standard oil

            Western Union  came close.

            This is the bit where you argue that although they walked and quacked like ducks, due to some obscure and microscopic difference they were actually a very close relation to the duck but not actually of the genus scipidae and therefore yadda yadda yadda meanwhile people die (I find it helps to keep these pointless timewasting pedantries in perspective).

            • Rusty Shackleford

              So you have one “close” example. Western Union nearly monopolised the market for telegraph transfers but then someone invented other ways of doing it. So, Western Union didn’t persist as a monopoly. There are actually alternatives.

              As I mentioned earlier. Standard Oil drove the price of oil down so far that they nearly put their competitors out of business. That seems like a good thing to me.

              • McFlock

                lol – of course it seems like a good thing to you – you’re a nutbar.

                The reason they ACTUALLY put their competitors out of business was so they could charge monopolistic rates in the longer term. This is A Bad Thing. So they were broken up by the federal government. Nice link though. Shame it’s bullshit – e.g. the use of predatory pricing c1900 does not preclude an actual competitive advantage at startup c1870, and so on.
                Western Union counts because they were a monopoly in many geographical areas. Secondly, we’re not talking about actual permanence as a monopoly here – we’re talking about the attempt. By your measure, England never had an empire because it was gone within a hundred and fifty years or so.

                Oh, and you’re full of crap. Yep, that was a personal comment. Deal with it.

                • Rusty Shackleford

                  I would think that low prices are good regardless. Isn’t that why monopolies are bad? Because they charge higher prices than they could under competition? How did Standard Oil charge lower prices in the long run? Remembering that there were at least another 100 firms in the market.

                  Perhaps Western Union were a monopoly in certain areas because there wasn’t the market to support more than one firm? Arbitrarily adding another firm isn’t going to make anyone better off (I keep forgetting that govt action doesn’t have to make people better off, according to you guys).

                  England retained there empire through the use of guns. Govts like to do that. For WU (or any firm) to remain a monopoly (charge high prices) in the long term, they need to lobby to use those guns.

                  • McFlock


                    Let’s take your lower prices are a good thing, therefore monopolies are good idea:

                    Equilibrium cost: $6/unit, say 14,000 units/yr.
                    $5/unit for 2 years total volume 30,000 units as the lower prices increase demand = $150,000.
                    $6*28,000 units (market equilibrium)  $168,000, so underpricing by $18,000.
                    This gives you a few years of monopoly pricing at $7/unit before someone else manages to start up, but the demand drops to 13k units per year as the cost increases.
                    $7*26,000= $273,000. Competition price for those 3 years: $252,000.
                    3 year monopoly reward = $21,000. 2 year anti-competitive cost: $18,000.
                    Consumers pay $3000 more for your wonderful “lower prices”. Which standard oil then spends to undercut competitors in another area.

                    That was the problem with standard oil – it was charging lower “in the long run” because that includes the unsustainably low prices that were only charged in the areas where competition was faced. Most of its service area was at monopoly rates, and it stayed that way because it could afford to temporarily undercut nascent competitors out of its very big pie. Areas fortunate to be geographically located to be attractive to prospective competitors were subsidised by the rest of standard oil’s service areas. Which is why it was broken up.


                    • Rusty Shackleford

                      I’ve never said monopolies are a good thing. Just that the benefit from breaking them up, doesn’t always cover the cost. Seeing that another competitor or technology usually comes along.

                      Look at the heavily regulated oil industry of today. is it an improvement on 1920?

                    • McFlock

                      Oh please -“As I mentioned earlier. Standard Oil drove the price of oil down so far that they nearly put their competitors out of business. That seems like a good thing to me.”  (emphasis added)

                      “I’ve never said monopolies are a good thing. Just that the benefit from breaking them up, doesn’t always cover the cost. ”

                      I was merely pointing out that even an aggregate lower price is not necessarily a good thing because it might simply mean a few are experiencing extreme underpricing while most are being gouged. Sounds like you need to go to the same remedial school as Bill English.

                    • Rusty Shackleford

                      Yes that is right. I’ve never said monopolies are a good thing in and of themselves. I’ve maintained throughout that low prices are a good thing.

                      “it might simply mean a few are experiencing extreme underpricing while most are being gouged.”
                      Was this the case with Standard Oil?

                  • McFlock

                    Well, they had a few court cases about that. But then your internet links know better.

  10. Gosman 10

    Once again I am staggered by the intellectual nous of many regular contributors to this site.

    Someone makes a broad statement about the nature of investor behaviour. When challenged on this to provide evidence to back it up othe people chime in with it being standard knowledge for anyone who has taken an ECON101 course.

    When it is pointed out that ECON101 doesn’t in fact state what they claim it does people retort that Economics as taught in universities is in fact wrong and does not reflect the real world. The implication being that you would be stupid to rely on it to back up your argument, conveniently forgetting it was in fact some leftist poster who tried to act intellectually superior by bringing it into the argument in the first place.

    You guy’s are a real riot. No wonder the left is in such disarray at the moment if you are a reflection of the intelligensia of the left wing.

    • Bored 10.1

      And we on the left are staggered by your complete stupidity Gos. Think ing about it, you have had several bans, is that not so? You have made absolutely no converts, and convinced nobody of anything over here. As a salesperson you are obviously a waste of space, or is ti the goods you are selling are crap. Take your choice. From an intellectual viewpoint you are obviously deficient going by your behavoir.

      • Gosman 10.1.1

        That is making a rather gross assumption about my motivations for coming here.

        For your information I enjoy challenging my own, and others, beliefs by engaging in robust debate about various issues. I find it sharpens my wits responding to someone who comes from a different idealogical perspective from me.

        It is always good to get other people’s perspectives on issues and chew them around in your head to see if your current world view needs changing. That stated the way many of you discuss issues on here it isn’t likely to happen very often, if at all.

        • Bored

          That stated the way many of you discuss issues on here it isn’t likely to happen very often, if at all. QED

  11. twisted world 11

    Mr Smith knows of what he writes. From an early age this Mr Smith has had deeply felt convictions about the shortcomings of monopolies – encouraged perhaps by his claims that the best comes out only in the delights of competition.. Raised in a tenement house next to a knock up joint, some of the happiest days of his life were when his religiously devout mother left her son in the care if these lovely young ladies of the night whose souls he was sent to save… Wise before his years in the ways of women he grew to understand a lesson only the bravest of men in the west now dare to voice in public.

    Many a man will recall those happiest of times when he had multiple women in his life. The lightness in his step after a night of front doors and back windows – and the golden light which seemed to fill the dawn.

    But the honey trap monopoly he finally falls for then sees a sudden series of developments occur, bewildering in their abruptness and yet – there seeming permanence.

    All the usual monopoly charges raise their heads – price gouging, take it or leave it responses, early service culture evaporates, little attempt to maintain equipment provided – and you know you can forget all about checking out next years models .

    Threats to take your business elsewhere only result in embarrassing arguments and threats of financial ruin to the unwary.

    Sigh…we must love monopolies.

    We can all talk a good game but how many, like Mr Smith, have the cojones to walk it…

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