Archive for monopoly

Government “Security” Dictated by Prank-Calling Sadist in Walmart Shooting

3810394260_77e20bf59a_oThe shooting death of John Crawford in an Ohio Walmart store well illustrates the difference between private security and monopoly government security which is the final judge of its own actions, and which enjoys essentially limitless access to cash via the taxpayer.

The basic facts are these: Crawford picked up a BB gun (which is not in any way a “firearm”).  The BB “gun” is store merchandise and is sold in the store by Walmart. Crawford walked around the store holding the non-firearm in a non-threatening manner while talking to the mother of  his children on the phone. In response to a phone call from another shopper, police stormed the store, guns drawn, and shot Crawford dead on sight with no warning. Another woman, a 37-year old mother Angela Williams, also died of a heart attack in the ensuing police-caused chaos.

We  now know that the person who called the police, Ronald Ritchie, lied to the 911 operator when he said that Crawford was pointing the toy BB “gun” at people and that he was trying to load bullets into it. Ritchie lied when he said that Crawford was pointing the gun at children. And just as an illustration of Ritchie’s reliability, we also know that Ritchie lied about being “an ex-marine.” Nonetheless, police officers and dispatchers unquestioningly deferred to Ritchie, and based their response on Ritchie’s claims.

So, we apparently live under a system of public-sector policing in which a phone call from a single “witness” can trigger an aggressive police response based on no evidence, no intelligence gathering, and no regard whatsoever for whether or not the person calling into 911 is to be regarded as a credible source or just a lying man-child.

This isn’t the first example of this sort of thing, of course. We know that police engage in SWAT raids and other forms of police violence based on nothing more than a single phone call from a single witness with not even the most cursory investigation into whether or not the “tip” is based any anything other than boredom, spite, racism, or simply sadism . If anyone has an enemy, he need only call the police and report that the target of one’s ire is selling drugs out of one’s home or that he’s some sort of “terrorist.” Police with then descend on the “perp” with assault weapons drawn and smash up the person’s home. In fact,  a violent police response is so reliable, that the “game” of calling police with the intent of calling out military-style police raids on innocent victims in called “swatting.”

Would private police respond in a similar way? Would one phone call from an anonymous caller precipitate a private police agency to send out an armored vehicle filled with para-military assault-rifled soldiers pointing weapons at innocent bystanders? When government police point loaded weapons at innocent women out walking their dogs, they regard it as their prerogative to do so and make no apologies. As we know in the case of Crawford, even when an innocent person is gunned down, we’re told it’s “policy” and can’t be avoided.

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States, Cartels, and the Anarcho-Capitalist Opposition

Political protestMises Daily Thursday by David D’amato:

If, for good reason, we generally distrust the concentrated power wielded by coercive monopolies, we ought to avoid at all costs placing more power in the state, the ultimate embodiment of monopoly.

Patents Are Not Economical

TM158_Strong_Calico_Loom_with_Planed_Framing_and_Catlow's_Patent_DobbyWell, they’re often economical for the patent holder in the short-run. But over time, a legal regime that discourages information-sharing simply closes off advances in technology. Defenders of government-granted monopolies (i.e. patents) often rely make broad claims that allegedly show that inventions would not be made were it not for patents. True history, on the other hand, generally shows the exact opposite as in the case of William Gilmour and the power loom. James Bessen writes:

Although Gilmour and Lyman directly helped competing mechanics and textile mills, they weren’t fools. For two decades, machine shops and textile mills made high profits. Machine shops could charge high prices for textile equipment because few mechanics knew how to build them; textile mills could make high profits because it was much cheaper to use the new loom. Imitation didn’t substantially reduce profits because there was a shortage of mechanics who could build the machines, of entrepreneurs who could run the new type of enterprises, and of skilled workers who could make the new contraptions productive.

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Should E-Cig Manufacturers Love the FDA?

6743 (1)Christopher Westley writes in today’s Mises Daily:

If the purpose of anti-smoking regulation was about, you know, actually reducing smoking, then one might presume regulatory authorities would champion the emergence of smoking substitutes. But it was never about this. It was, and is, always about control, and the result is a Bizarro World in which e-cig manufacturers apparently support the use of extra-market force against the sale of their products.

Scarcity, Monopoly, and Intellectual Property

6727David Gordon writes in today’s Mises Daily: 

Faced with a welter of arguments in conflict, what is the perplexed libertarian to do? Butler Shaffer’s superb monograph offers an easy way to unravel the IP puzzles. He starts from a fundamental principle basic to libertarianism and explains how the implications of this principle shed light on IP issues.

What is this principle? It is that rights stem from “the informal processes by which men and women accord to each other a respect for the inviolability of their lives — along with claims to external resources (e.g., land, food, water, etc.) necessary to sustain their lives.” (p.18) The “informal processes” that Shaffer mentions proceed without coercion. In particular, law and rights do not depend on the dictates of the state, an organization that claims a monopoly over the legitimate use of force in a territory.

Whatever Happened to Peace Officers?

6643Jeff Deist writes in today’s Mises Daily:

We know that state monopolies invariably provide worse and worse services for more and more money. Police services are no exception. When it comes to your local police, there is no shopping around, there is no customer service, and there is no choice. Without market competition, market price signals, and market discipline, government has no ability or incentive to provide what people really want, which is peaceful and effective security for themselves, their families, their homes, and their property. As with everything government purports to provide, the public wants Andy Griffith but ends up with the Terminator.

There is no lack of Austrian scholarship in this area, the intersection between security services, state monopolies, public goods, and private alternatives. I would initially direct you toward two excellent primary sources to learn more about how markets could provide security services that no only produce less crime at a lower cost, but also provide those services in a peaceful manner.

How Intellectual Property Distorts Big Business, Science, and Creativity

6632Butler Shaffer writes in today’s Mises Daily:

There are many other costs associated with IP that rarely get attention in cost-benefit analyses of the topic. One has to do with the fact that the patenting process, as with government regulation generally, is an expensive and time-consuming undertaking that tends to increase industrial concentration. Large firms can more readily incur the costs of both acquiring and defending a patent than can an individual or a small firm, nor is there any assurance that, once either course of action is undertaken, a successful outcome will be assured. Thus, individuals with inventive products may be more inclined to sell their creations to larger firms. With regard to many potential products, various governmental agencies (e.g., the EPA, FDA, OSHA) may have their own expensive testing and approval requirements before new products can be marketed, a practice that, once again, favors the larger and more established firms.

Increased concentration also contributes to the debilitating and destructive influences associated with organizational size. In addressing what he calls “the size theory of social misery,” Leopold Kohr observes that “[w]herever something is wrong, something is too big,” a dynamic as applicable to social systems as in the rest of nature. The transformation of individuals into “overconcentrated social units” contributes to the problems associated with mass size. One sees this tendency within business organizations, with increased bureaucratization, ossification, and reduced resiliency to competition often accompanying increased size. Nor do the expected benefits of economies of scale for larger firms overcome the tendencies for the decline of earnings and rates of return on investments, as well as the maintenance of market shares following mergers. The current political mantra, “too big to fail,” is a product of the dysfunctional nature of size when an organization faces energized competition to which it must adapt if it is to survive.

Advancing Pharmaceutical and Medical Technology Does Not Depend on Patents

6625Writes Nathan Nicolaisen in today’s Mises Daily:

The notion that unpatented medical technologies are not feasible is historically false. Surveys of important medical breakthroughs provide insight into whether patents are absolutely necessary and conducive to innovation in medicine. In 2006, the British Medical Journal challenged its readership to submit a list of the most noteworthy medical and pharmaceutical inventions throughout history. The original list contained over 70 different discoveries before being narrowed down to 15. The list goes as follows in no particular order: penicillin, x-rays, tissue culture, ether anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the pill, computers, oral rehydration therapy, DNA structure, monoclonal antibody technology, and smoking health risk. Of these discoveries, only two of them have remotely anything to do with patents, chlorpromazine and the pill. In another survey conducted by the United States Centers for Disease Control the results are strikingly similar. Of the ten most important medical discoveries of the twentieth century, none of them had anything to do with patents.

How Government Regulations Made Healthcare So Expensive

Guest Post: The U.S. Offers Obamacare to Those Who Don’t Remember When Markets Controlled Medical Costs

By Mike Holly

“Those who cannot remember the past are condemned to repeat it,” declared philosopher George Santayana.  The U.S. “health care cost crisis” didn’t start until 1965.  The government increased demand with the passage of Medicare and Medicaid while restricting the supply of doctors and hospitals.  Health care prices responded at twice the rate of inflation (Figure 1).  Now, the U.S. is repeating the same mistakes with the unveiling of Obamacare (a.k.a. “Medicare and Medicaid for the middle class”).


Figure 1:  An Indexed Comparison of Health Care Inflation and Consumer Price Index in US from 1935 to 2009  (Source: US Census 2013)

Nobel Prize-winning economist Milton Friedman wrote that medical price inflation since 1965 has been caused by the rising demand for health-care coupled with restricted supply (Friedman 1992).  Robert Alford explained the minority view: “The market reformers wish to preserve the control of the individual physician over his practice, over the hospital, and over his fees, and they simply wish to open up the medical schools in order to meet the demand for doctors, to give patients more choice among doctors, clinics, and hospitals, and to make that choice a real one by public subsidies for medical bills” (Alford 1975).

The majority of policymakers support either monopolization (e.g. typically Republicans) or nationalization (e.g., typically Democrats).  Both have claimed “physician supply can create its own demand,” which means increasing the supply of doctors and hospitals will just motivate them to convince “ignorant” consumers to order more unnecessary and expensive health care.   During the 1970s, Frank Sloan, a Vanderbilt University health care economist, explained the success of the most influential pro-regulation health care economist, Uwe Reinhardt: “His theories are highly regarded because he is so clearly understood.  Unfortunately the evidence for them is not good; it is not bad either, it is just not there.  And it would be a shame to see federal policy set on such a poor, unscientific basis.”

Since the early 1900s, medical special interests have been lobbying politicians to reduce competition.  By the 1980s, the U.S. was restricting the supply of physicians, hospitals, insurance and pharmaceuticals, while subsidizing demand.  Since then, the U.S. has been trying to control high costs by moving toward something perhaps best described by the House Budget Committee: “In too many areas of the economy – especially energy, housing, finance, and health care – free enterprise has given way to government control in “partnership” with a few large or politically well-connected companies”  (Ryan 2012).  The following are past major laws and other policies implemented by the Federal and state governments that have interfered with the health care marketplace (HHS 2013):

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The 240th Anniversary of the Boston Tea Party

800px-Boston_Tea_Party-1973_issue-3cToday is the 240th anniversary of the act of civil disobedience against taxation, corporatism, and colonialism known as the Boston Tea Party.

The economics of the situation that precipitated the event were quite complex, however, and about more than a simple tax increase on tea. As noted here by Edmond Bradley, a monopoly over the tea trade had been granted to favored corporate interests by the British Crown, which made the price of tea artificially high to begin with.

Charles Adams explains how a British corporate welfare scheme to undercut smuggled Dutch tea is what led to the Tea Party:

The Boston Tea Party was a turning point in colonial reaction to British rule. By 1773 the tax issue was becoming obscure. Both parties were moving toward war.

Recently American postage stamps have depicted the Boston Tea Party as a glorious act of defying British colonialism. Most people believe it was a protest against British taxes on tea, but this is not true. American tea merchants had been boycotting British tea for five years. Smuggled Dutch tea was used throughout the colonies. In response, the British government decided to remove the duties on East Indies tea when it arrived in Britain so it could be sold in America at a price cheaper than smuggled Dutch tea. In addition, a monopoly on this cheap tea was given to loyal British merchants in the colonies. American tea smugglers would be put out of business. The Crown’s plan was based on the assumption that American consumers would not boycott low-priced English tea, but would purchase it rather than the higher-priced, smuggled Dutch product.

The implication of this to American merchants was frightening. If a monopoly could be granted for tea, it could be granted for other products as well. Economic sanctions of this kind could destroy American merchants. In protest, Bostonian merchants disguised themselves as Indians, boarded merchant ships loaded with tea, and threw the tea into the harbor.

Lew Rockwell explains how, fundamentally, the Boston Tea Party was about free trade and against taxes and special privileges:

The Declaration of Independence accuses the King of “cutting off our Trade with all parts of the world” and “imposing Taxes on us without our Consent”-with the second directly following the first. It is impossible to understand the meaning of this without understanding that the Boston Tea Party was a protest against the use of trade by the state to benefit some at the expense of others.

Our agenda today ought to be exactly that of the Sons of Liberty in Boston: the right to economic enterprise should be unimpeded by taxes or special privileges. This is all that true free traders, in the tradition of the American revolutionaries, have ever demanded.