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Originally posted by cheiros do ender:
Oh, I thought with publicly traded companies the CEO had to own ~50.1% of the stock to prevent things like that and to reflect their own dedication to the company.

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You NEVER want to buy stock in a company where one person owns more than 50%.

-pH
 

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Posted by Altáriël of Dorthonion (Member # 6473) on :
 
Let't not forget the merging between K-Mart and Sears. Oh, and Disney and Pixar.
 

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Posted by Goody Scrivener (Member # 6742) on :
 
I suspected something was up when Cingular (who has offered combined billing with my SBC local bill for years) took over AT&T Wireless and then suddenly SBC became AT&T...

Have all the Baby Bells reconsolidated now?
 

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Posted by littlemissattitude (Member # 4514) on :
 
All but one, I think I recall reading not too long ago. Not sure, and I don't know which the "all but one" would be, but this seems to be lodged somewhere in my memory banks. So I could, of course, be wrong. It's just that I read so much of this kind of stuff for work that it all blends together after a while.
 

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Posted by Lyrhawn (Member # 7039) on :
 
If it's Bell South, it'll be back in the fold shortly.
 

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Posted by Wowbagger the Infinitely Prolonged (Member # 7476) on :
 
Verizon (the merger of Bell Atlantic, NYNEX, MCI GTE and 50% Verizon Wireless)

Qwest(Qwest and US West)

AT&T (SBC, SNET, AT&T, Pacific Telesis, Ameritech, and 50% Cingular. Soon to be 100% of Cingular and Bell South )

Sprint/Nextel
 

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Posted by starLisa (Member # 8384) on :
 
This is pretty frightening.

Browse through this for a bit. Then if you're not feeling completely overwhelmed, try TheyRule.net and see the interlocking directorships of the various countries. It's as of 2004, and it doesn't look as though it's been updated since then, but it's bad enough.
 

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Posted by pH (Member # 1350) on :
 
Does this mean my Cingular service is going to start sucking?

I mean, sucking more than it already does because cell service in this city is horrible for all providers, and Cingular actually has more towers than everybody else.

Maybe I shouldn't renew my contract...

-pH
 

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Posted by Lyrhawn (Member # 7039) on :
 
It won't make your service any worse no.

Might raise your rates. At the same time, it might lower your rates. But it's highly unlikely that your actual service will get worse. If anything, with access to more towers and satellites to bounch your signal off of, the network should only get stronger.
 

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Posted by The Pixiest (Member # 1863) on :
 
Don't forget the largest monopoly of all... The US Government.

It constantly raises it's prices (and when it reduces the rate of growth it calls it a "cut") It has tons of services few people use but all must pay for. It has no competition at all in it's service area. It decides what you can do with your body, who you can marry and even if you may live or die.

All these other monopolies suck big time (especially SBC/AT&T) but the Federal Gov't is the worst of the lot by an order of magnatude.

Pix
 

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Posted by Lyrhawn (Member # 7039) on :
 
Isn't that kind of like arguing that the sun has no competition for heat and light?

The sun does what the sun does. Government does what government does.
 

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Posted by fugu13 (Member # 2859) on :
 
That's funny, pix, it seems very competitive to me. I see nearly 200 competitors.
 

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Posted by The Pixiest (Member # 1863) on :
 
fugu: Not in it's service area. Though the 200 competitors do strive to keep the US Gov't out of their own service areas.

Lyr: I'm just saying we should work on limiting its growth as much as possible. It never seems to shrink once it grows...

Pix
 

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Posted by starLisa (Member # 8384) on :
 

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Originally posted by Xaposert:
You guys just better hope I can't get both Park Place and Boardwalk. Then you'll really be in trouble...

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Originally posted by The Pixiest:
Don't forget the largest monopoly of all... The US Government.

It constantly raises it's prices (and when it reduces the rate of growth it calls it a "cut") It has tons of services few people use but all must pay for. It has no competition at all in it's service area. It decides what you can do with your body, who you can marry and even if you may live or die.

All these other monopolies suck big time (especially SBC/AT&T) but the Federal Gov't is the worst of the lot by an order of magnatude.

Pix

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the only way you can create and maintain a monopoly is to give the best service to the consumers.

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Originally posted by starLisa:
Well, we also were splitting Mediterranean and Baltic, and the light blue properties. What are they, Oriental, Connecticut and something?

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Originally posted by Carrie:

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Originally posted by starLisa:
Well, we also were splitting Mediterranean and Baltic, and the light blue properties. What are they, Oriental, Connecticut and something?

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Vermont.

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Originally posted by Artemisia Tridentata:
Since I am the only one here to remember when they broke up Ma Bell,

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Originally posted by Artemisia Tridentata:
I need to declare that to be one of the five dumbest things we ever did as a Nation. I won't buy a phone that wasn't built by Western Electric. So, I still have to spin the dial. But, they always work. If the Bell system could be reconstituted, (It is probably too late.) Maybe communication gear would last longet than the package it is sold in.

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Originally posted by Artemisia Tridentata:
EDIT for Lisa: My Masters is in Economics also.

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Originally posted by fugu13:
Well, I definitely agree most antitrust actions in history haven't been against really harmful monopolies, just against companies that have gathered the country's distaste, but that doesn't mean there aren't harmful monopolies.

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Originally posted by fugu13:
First of all, as you should well know sL, anything which constitutes a monopoly under the economic definition is, by definition, operating in a way that creates a deadweight loss for society.

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In the 1945 antitrust case of United States v. Aluminum Company of America, U.S. Appellate Judge Learned Hand, playing the part of Judge Jackson, convicted Alcoa of violating the Sherman Antitrust Act, and in effect stripped the successful aluminum maker of its market hold.

After the government sold plants to competitors Reynolds Aluminum and Kaiser Aluminum, Alcoa's market share dwindled to 51 percent from 80 percent.

Also, Alcoa shareholders were compelled to sell shares in Alcan, Alcoa's subsidiary.

Here was Judge Hand's rationale for lowering the boom on Alcoa: "It was not inevitable that it should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field," he said.

"It insists it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace every opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel."

In other words, shame on Alcoa for running such a great business. It committed the crime of building economies of scale to control costs so it wouldn't have to raise prices on consumers.

The nerve of Alcoa anticipating greater demand and embracing new opportunities. How dare it take advantage of its experience and connections with suppliers. How dare it hire elite personnel. That's no way to run a business, at least not according to the government. Tsk, tsk.

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Originally posted by fugu13:
Second, if you're going to argue that this hasn't happened ever in history, I would love to see your data. Even a small survey study. Surely you have such data to make such a broad assertion?

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Originally posted by fugu13:
Third, if your argument is going to be that they couldn't have been providing less than the best service for the price as another firm would have replaced them, I'm going to wonder about circular reasoning, and note that should another firm try to enter a small market niche the first firm could merely shift to competitive pricing, removing any advantage for the second firm.

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Originally posted by fugu13:
Thus, even if the firm in a market niche is practicing monopoly pricing, if that market niche is small, there is no incentive for the second firm to enter.

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if you want to make the far-reaching claims that supporters of anti-trust legislation want to make

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Um... so what? It's not as if competitiveness is a right guaranteed by the Constitution. So a second firm doesn't enter the market. Big deal.

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Originally posted by fugu13:

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Um... so what? It's not as if competitiveness is a right guaranteed by the Constitution. So a second firm doesn't enter the market. Big deal.

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For someone versed in economics, you have breathtakingly missed the point. The point isn't whether or not another firm enters, the point is a firm can survive in an economic niche, practicing monopoly pricing (which is, by definition, not providing the best service at a price), and be impossible to dislodge.

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Originally posted by fugu13:
As for why I haven't provided a counterexample, I'm searching for one that you wouldn't just toss because "oh, they're providing the best service" (though I suspect proof of that would not be forthcoming on your part).

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Originally posted by fugu13:
Of course, since best service is only a meaningful term in the context of a price, what I need to show is a firm practicing monopoly pricing. Firms are notoriously difficult about providing sufficient information to demonstrate that conclusively.

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Originally posted by fugu13:
Of course, you seem to have admitted the situation I outlined above could exist, as much as you missed the point. That situation demonstrates a case where a monopoly might exist charging a price creating a deadweight loss in society.

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You might be right. I might just say, "Who has the right to decide what constitutes 'the best service'?" I might say that if people didn't like the product or the service, they wouldn't be buying it. I might say that if it ain't broke, don't break it.

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Originally posted by Artemisia Tridentata:
Since I am the only one here to remember when they broke up Ma Bell. . .

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Originally posted by The Pixiest:
My God.. It's like reading Atlas Shrugged!

Starring...

starLisa as Dagny Taggart! and
fugu13 as James Taggart!

But... who... Who is John Galt?

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Originally posted by fugu13:
The best (purest) example would be a (very) small town general/grocery store. If the town can only support one such enterprise, one would expect prices in the town to be monopolistic. There's a simple test, of course, compute the marginal cost to the business to offer a good and see if it matches the price. If it doesn't, there's deadweight loss to society.

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Originally posted by fugu13:

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You might be right. I might just say, "Who has the right to decide what constitutes 'the best service'?" I might say that if people didn't like the product or the service, they wouldn't be buying it. I might say that if it ain't broke, don't break it.

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I think this amply demonstrates why I'm not satisfied in putting any example I've found so far to you. The first of your statements would mean no argument is satisfactory, for either position. The second is an essentially irrelevant statement; I'm not disputing that, I'm only talking about efficiencies. The last is fallaciously assuming a lack of breakage; I think market inefficiencies constitute, by their nature, a breakage.

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Originally posted by fugu13:
Two of the problems with finding any clear example of this on a large scale are that most markets are competitive (thank god), and governments do interfere, a lot. Most candidate markets have been subject to extremely inefficient regulation, because people have long had feelings about their potential problems, and instigate unfortunate, misguided "solutions".

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Originally posted by fugu13:
You don't know what a deadweight loss to society is? I suggest you retake your introductory microeconomics sequence, or sue the school you took it at.

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Originally posted by fugu13:
In the case of the general store, the loss is due to a loss of efficiency. I suppose since you don't know the term deadweight loss you are unlikely to be able to draw the diagram,

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Originally posted by fugu13:
but basically the producer (the general store) captures some of the consumer surplus by raising prices and reducing quantities, increasing the producer surplus. Doing this, however, results in some of the consumer surplus just disappearing, leading to a net loss to society.

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Originally posted by fugu13:
In the case of the general store I don't think there's any need to do anything; the deadweight loss is likely tiny. There is one interesting route the community could take: provide a small subsidy to the general store.

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Originally posted by fugu13:
Strangely, a subsidy to a monopoly pricer results in more benefits to total surplus than the cost of the subsidy.

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Originally posted by fugu13:
Oh, and I've found a very good example, primarily from the paper "The Growth and Impact of the British Water Industry in the Nineteenth Century", by J. A. Hassan, published in The Economic History Review (some details filled in by reading his cites).

For a good while, the British water industry was basically unregulated. There were some local waterworks, but industry deregulation at the beginning of the nineteenth century meant nearly all localities were served by unregulated private companies.

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Originally posted by fugu13:
Nearly all local markets were small, most of the water industry serving villages, small towns, et cetera. There were a large number of companies, but rarely more than one or two in an area.

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Originally posted by fugu13:
As is expected in any system where a firm has the potential to exercise monopoly power, these firms did. Note, there was no regulatory impediment was stopping another firm from entering the same market. In fact, there were some areas where two firms abutted each other -- neither was able to sustain a profit in the overlapping region.

Exactly as is expected by basic microeconomics, particularly with a good having such a steep value curve, the firms kept prices somewhat higher and greatly undersupplied the localities, frequently not bringing water to an area until there were quite a few buildings already erected. They had higher profits than what few municipal works were around at the time or the municipal works that followed.

However, industrial and population growth in much of England was suffering from a lack of water.

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Originally posted by fugu13:
A bit after mid-century, a wave of municipalization swept the nation, sometimes by granting a particular company certain guarantees of local monopoly in exchange for guarantees of service, sometimes by a town beginning its own waterworks.

The economic benefits to the region were huge, resulting in greatly increased growth, at a small cost to the profits of the water companies (as noted before).

As a side note, I'm extremely amused at you comparing me to Blayne. Your and my two positions are actually extraordinarily similar. However, our ideological bases are not. I'm in favor of markets operating at maximum efficiency through the enforcement of rights regimes (such as property rights) and absolutely minimal regulation in certain extreme circumstances leading to unacceptable deadweight loss; basically Milton Friedman's position. Your position is based on some fairly esoteric concepts of morality.

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During the first four decades of the nineteenth century, parliament "relied on the workings of market forces and the potential of competition to safeguard the public interest."

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