Antitrust laws were put in place to keep the market place open to anyone -- and -- free to sell their product. --> Open competition. So if you were a small mom and pop oil company, you could sell your oil along with Standard Oil.
People who say they are Against Government Regulation are saying:
-- They are OK with REPRESSION of the free market caused by CARTELS.
-- They are OK to COLLUSION among business communities to prevent any one else competing.
I found this graft interesting. It is the economist's depiction of deadweight loss (inefficiency) to efficiency that monopolies cause.
There comes a point when monopolies create a loss of people buying their products due to "Lack of competition."
When you have a favorite brand of ice cream say "X" ice cream, you tend to buy only that brand, but you do buy others occasionally.
Another ice cream business, say "R" ice cream, wants "X's" customers to buy "R" ice cream. Instead of making a better product, they buy out the competition, X.
Does R make ice cream like X? No, that's too expensive and they have to cut costs because it cost so much to buy up all X's stock so the company's board would sell the company -- and then "R" had to pay for "X's" company after that. So now you are left with only R's ice cream that had to cut quality to cut costs.
How is that creating open competition? It didn't. It wasn't meant to. That is Reducing the Market. Now we are left with lousy ice cream, so we just stop buying it.
After all, if you worked at the "X" ice cream factory, you've lost your job and can't afford to buy any ice cream.
No comments:
Post a Comment